WHISTLE BLOWING FOR PUBLIC SECTOR ACCOUNTANTS: SITUATION ANALYSIS

AND THE PENDING LEGISLATION

Presentation by:

CPA Charles N. RasuguDeputy Director, Ethics and LeadershipEthics and Anti Corruption Commission

Thursday, 16th November, 2017

Uphold public interest

Outline

qIntroductionqInstitutional frameworkqThe Concept of Whistle blowingqDimensions of whistleblowing?qThe public sector accountant as a whistle blowerqLegal framework for whistleblowingqBarriers and challengesqWay forward

Introduction

Theme:Towards the call of professionalism and

accountability

The Ethics and Anti Corruption Commission

The Ethics and Anti Corruption Commission

An Agency established pursuant to Article 79 of the Constitution to enforce Chapter 6 of the Constitution on leadership and integrity and related laws through:• Investigations; • Asset recovery;• Public education and awareness;• Prevention (review of systems of public bodies);• Development and promotion of standards and best

practices in ethics and integrity;

Complaints and Investigation Status (2013-2017)

Particulars No.

Number of complaints received 28,556

Number of cases taken up forinvestigations

5,961

Number of cases under activeinvestigationsNumber of cases currently in court:Criminal:Civil:

4,674

450700

CONVICTIONS

Some Convictions In Counties (SEP 2016 - JUNE 2017)

Recovery of corruptly acquired assets

• Assets worth Kshs 6.1B recovered (2010-2017)• Assets traced Kshs 14B (Including former local

authorities)e.g. Kilifi 104M, Nairobi 531M, Kajiado 250M

• Recovery proceedings for assets worth Kshs 5.5B.

(Kshs. 74 million recovered from a former Managing Director KPA (September 2017))

Sources of Corruption Reports

• Individual members of the public• Suppliers• Civil society organizations• Insider (whistle-blowers)• Management • Official reports –PAC, auditors• Media reports • Intelligence

How to Report Corruption

• Walk in- HQ, Regional offices and Hudumacenters

• Telephone• E-mail• Letters• EACC Website – www.eacc.go.ke• Anonymous - BKMS- web based reporting• Media• Statutory Reports.

Whistleblowing

qThe disclosure by organization members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action

Whistleblowing is not a Grievance

• A whistleblowing disclosure affects others parties -workers, the organization or the public;

• While a grievance is a personal complaint about someone’s own employment situation.

Forms of Whistleblowing

• Internal -reporting inside the organization e.g.to designated officer, workers or bosses in thesame organization.

• It is a good corporate governance best practice

• External -reporting to external lawenforcement agencies or to teams concernedwith the matters for example law enforcement,civil society organization, mass media, etc.

Dimensions of whistleblowing

Aspect ConsiderationWhat Fraud & corruption risks and

unethical conduct etcWhen Exhausted internal soft optionsWhy In public interest, safeguard

organization and employeesWhere Relevant trusted authority

(officer and agency)How Carefully as per circumstances

What to whistle-blow

• Bribery, fraud and corruption

• Embezzlement and misappropriation of funds

• Ethical breaches against Code of Conduct;

• Maladministration -not adhering to procedures, negligence;

• Abuse of power;

• Unlawful acts such as theft

Public Sector Accountants as Whistleblowers

Accountants are ideal whistleblowers because• They are strategically at the scene-authorization

revenue points, payment points, budgeting, audit • Expertise knowledge- the law, policies and

procedures hence the violations• Insider reports are quality reports • Reports of accounting nature are usually self

propelling hence a whistleblower need not be a witness

• A further opportunity to ‘uphold public interest’

Barriers to whistleblowing

Barriers to whistleblowing

• Fear of retaliation- Swallow the whistle

• Fear of alienation from peers

• Lawful liability: I may be required to testify!

• Culture of complicity: it is the norm here• Is it the only wrong here? Drawing attention to

other issues - Questionable integrity• Integrity versus loyalty to the institution

• Lack of legal framework

• Lack of institutional policy and procedures

Barriers to whistleblowing

• No cover since one is a definite source• No incentive/reward

• Confidentiality obligation not to divulge client information as per institutional and professional Code of conduct

• Apathy: Inefficient action by the authorities

• Other considerations: Whistle blow against who? –Management /employer? a fellow accountant? ‘my tribe’?

• Impunity

Research findings

Whistleblower assessment.

• Is the whistleblower settling scores against a supervisor with false accusations?

• Is the whistleblower is bringing genuine problems to the fore but is also a non performer?

• Is it undermining management decision making?• Is whistleblowing a means of escaping the

consequences of what an employee participation in? (Deal gone sower)

• Is the whistleblower targeting a specific employee because of his or her race, gender, or ethnicity?

Legal framework on whistleblowing

• No dedicated whistleblower statute in place

• Draft Whistleblower Protection Bill developed by Task Force for the Review of the Legal, Policy and Institutional Framework for Fighting Corruption in Kenya.

• Only Witness Protection Act exists –Which provides for protection of persons who testify in investigations

Proposed Whistleblower Protection Bill

• Immunity from legal proceedings

• Establishment of national and institutional whistleblowing policies & procedures

• Provision for anonymous disclosures

• Measures to curb victimization

• Establishment of whistleblower fund

• Administration/Investigations by the CAJ

• Whistleblower Review Committee

Bribery Act ,2016– Sec 21

• Applies to public and private sector providing for whistleblowers protection mechanisms

• A person who intimidates , harasses or demotes a whistleblower etc. is guilty of an offence

• Penalty of up to 1 year imprisonment or fine not exceeding 1 million or both

• It is an offence to disclose whistleblower information

• Law enforcement Agency to put in place mechanisms to conceal identity of informants, whistleblowers and witnesses

Other Provisions

• ACECA 2003- Sec. 65- provides for protection of informers, and concealment of identity

• POEA 2003-sec 41- Prohibits and criminalizes unlawful divulging of information

• UNICAC-Article 33. Protection of reporting persons: State Party to legislate protection against any unjustified treatment reporters

• Institutional policies : Have protection policies e.g. KRA, KPLC

Conclusion

• Accountants should embrace whistleblowing as a good governance practice & corruption will certainly reduce

• Caution and prudence is necessary

• Adequate legal and policy framework is necessary to promote and protect whistleblowers

• Remember the calling- Uphold public interest

Parting Shot