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CEO, ACFE SOUTH AFRICA

JACO

DE JAGER

EXPERT OPINION

Corruption is defined by ACFE as a scheme in which an significant amounts of cash involved in corrupt activities,
official misuses their influence in a business transaction whistleblowers’ lives are under threat. An independent
in a way that violates their duty to the employer in hotline supported by an ethical culture that will deal
order to gain direct or indirect benefit. Corruption decisively with corrupt official and victimisation of
is a sub-category of fraud, which thrives as a result of whistleblowers is required.
absence of ethical leadership, enforcement of policies,
professionalism, necessary skill set and transparency. Some of the tools required to understand and fight
Corruption is further broken down into the following corruption are as follows:
classifications:
• The Fraud Triangle forms a basic tool to understand
• Conflict of Interest (purchasing schemes, sales and deal with what drives corruption. (https://www.
schemes etc.) fraud-magazine.com).
• Bribery (invoice kickbacks, bid rigging) • Revisit the POPI Act so that vital information can
• Illegal Gratuities be shared amongst different industries to catch
• Economic Extortion perpetrators.
• An ISO Standard is being developed on corruption
People commit crime and become corrupt when there is and bribery that will enable a more consistent,
a total lack of consequences. The Covid-19 pandemic has decisive approach to fighting this scourge.
highlighted how quickly business and the public at large • Revive the National Anti-corruption Forum. This can
will flout the law for personal gain. Retailers unashamedly be revised in a short time given the appropriate
increased margins significantly on PPE to take advantage political will to do so.
of desperate customers seeking to protect themselves • Consistently conduct pre-employment background
from the Coronavirus. checks.
• Increased management reviews to check adherence
Assuming adequate resources are allocated to fight to company policies and procedures.
corruption, the support of the police, Serious Economic • Separation of responsibilities (avoid referee and
Crimes Unit, DPCI, National Prosecuting Authority and the player situations).
judicial system must in turn have the skills and resources
to investigate and administer punitive fines and jail In conclusion, fighting corruption requires coordination
sentences to guilty parties. and efforts from all parts of the organisation supported
by good governance and externally by organs of state
One of the major challenges is high levels of collusion. (Chapter Nine Institutions), SAPS and the NPA. This
From an internal control and auditing perspective, it is coordinated effort is normally short-lived unless it includes
difficult if not impossible to prove corruption when faced more sustainable solutions in the form of developing an
with collusion. Independent hotlines provide an option ethical, values-based culture, good governance, punitive
for people that believe in doing the right thing and consequence management and basic respect for the rule
following the law to expose perpetrators of corruption. of law.
Having a hotline service should become the norm, not the
exception, since more than 41% of all fraud is detected
through hotlines. Added to this gap is the inability to
protect whistleblowers from victimisation. Based on the

Sources: Deloitte – “The 2020 Report to the Nations—the ACFE’s 11th study on the costs and effects of occupational fraud
First special report on the financial management of government’s Covid-19 initiatives- AGSA 2020

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