Ladies and gentlemen, thank you for inviting me to speak today and to chair

this panel discussion.

As you have just heard my name is Anthony Harbinson and my career has

seen me working in the public sector for many years leading to my current

role as Director of Safer Communities for the Northern Ireland Department

of Justice. As well as being a former President of the ACCA I also happen to

lead the AML Taskforce for the CCAB, the umbrella body for the main UK

professional Accountancy bodies.

In all of these capacities I have been able to develop particular insights on

the subject corruption, criminal financing and money laundering which I hope

we can explore today in our panel discussion. The question and answer

element of this discussion will be a key aspect of this session and therefore

it is essential that you, the audience, fully participate and make this a highly

interactive and indeed challenging and robust discussion.

Corruption is a topic which I regard as not only important for the

accountancy profession to examine but one about which we all need to

remain vigilant, especially those of us who operate within the Public Sector.

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The results of corruption in the public sector effect everyone in society as

well as sovereign nations and the global financial markets. No matter were

it occurs its resonance can be felt around the world, it is a truly global

problem.

Given this event is one which focuses on the Public Services I can’t stress

enough the importance effective public financial management.

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And so, here is the agenda I want to work through with you today.

I will start by introducing the subject and looking at some of the key aspects

that we may wish to consider in this session.

I will then explore some of the ways in which we may be able to limit the

level of corruption before turning to what I see as the specific role of the

accountant in trying to limit corruption in public services.

Then the session will really start when I introduce the rest of the panel

members and after a few words from each on their views we will get the

debate going!

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Governments spending on public services accounts for more than one-third

of GDP in most countries around the world.

Globally, the public sector is rapidly changing and the demands on public

services are growing, together with the tax bill and governments are

wrestling with a number of complex challenges including austerity measures

and demands for improved public services.

At the same time they are facing the challenges of aging populations, rising

healthcare costs, reform of welfare support, provision of quality education,

the environment and climate change, defence costs, protection of natural

resources, terrorism, crime and infrastructure costs – and so every penny

counts and any loss of resources is acutely felt!

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So there can be no doubt that given the complex challenges faced by

governments, policy makers and business in delivering good public services,

corruption is more than just a minor problem or an irritant, it damages and

indeed takes lives!

Aside from the ethical dimension and that could be a whole other discussion

point – we have to ask the question “can we afford not to tackle corruption?”

And of course we have to address the moral dimension too – tackling and

stopping corruption is simply the right thing to do.

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But let us be clear, corruption is not just a issue for the developing world, it

effects us all, and it always has!

The quotes on the left hand side of the slide demonstrate this, but I wanted

to share the imagine on the right hand side with you which highlights the

most recent research published by Transparency International in their

Corruption Perceptions Index 2016.

Firstly I should say that no country gets close to a perfect score in the

Corruption Perceptions Index 2016.

Over two-thirds of the 176 countries and territories in this year's index fall

below the midpoint of the scale of 0 (highly corrupt) to 100 (very clean). The

global average score is a only 43, which Transparency International claim

indicates that there is endemic corruption in a country's public sector. Top-

scoring countries (yellow on the map) are far outnumbered by orange and

red countries where citizens face the tangible impact of corruption on a daily

basis.

Whilst you might not be able to see the detail clearly, what you will see from

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the heat map is that generally countries, such as those in Scandinavia and

Canada, that have a reputation of tackling corruption head-on appear as

light yellow. This indicates that these nations tolerance for corruption is very

low. It is an example of what can be achieved with continuous vigilance and

a commitment to high standards.

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Taking a little more detailed look at the heat map you will see that those

countries with a much higher tolerance for corruption and less developed

systems of prevention and detection are dark red. Unfortunately, most

developing countries, including those in Africa, are more red than yellow!

But this is not true in all cases. Not long before stepping down as UK Prime

Minister David Cameron led a trade delegation to Singapore where he

delivered a powerful speech called “Tackling Corruption.”

On this trade mission to Singapore Mr Cameron said:

“It is the commitment to tackling corruption that helped to give people

confidence to invest in this incredible country. And it is no coincidence that

Singapore’s climb to the top end of the global indices for anti-corruption and

for ease of doing business have gone hand-in-hand with its great global

economic success”.

I mention the example of Singapore in order to highlight just how crucial it is

for the outside world to have the confidence that a particular country regards

transparency as important. And I think there is a strong correlation between

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the perception of corruption in a certain country and whether potential

investors will wish to engage with trade and investment.

And within the same speech, the former Prime Minster put it rightly by

saying: “Corruption is one of the greatest enemies of progress in our time”.

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What we have seen over recent years are issues to do with corruption rise

to the top of the news agenda. It has greatly affected the Public Sector as

well as big business and small business alike, within the Private Sector.

And those of us with a passion for sport will know that it has also infected

the world of football and tennis and athletics, affecting bodies such as FIFA

and the Olympic Committee.

What Cameron said in Singapore was that corruption robs those who require

the most help and assistance. And so it is essential Leaders within the

Public Sector – whether politicians or officials – need to tackle the issues

head on.

What we know from news reports about recent scandals is that public sector

corruption can effect everything – from a family’s ability to feed and clothe

their children, to the credibility and reputation of governments, and big

business and the personalities that run it.

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Corruption in Public Services undermines trust in the integrity of our

governments and our delivery systems, health, education, justice and

infrastructure causing long-term detriment to our society and the people who

depend on them most. So how do we set about limiting the levels of

corruptions with public services?

Well we need to begin by ensuring that there are high levels of vigilance on

the part of those working in the public sector and this needs to be

maintained consistently when it comes to preventing corruption. We need

to always be one step ahead of the dishonest public officials, politicians and

organised criminals who are constantly looking for weaknesses and

loopholes in our systems.

So the first step in significantly reducing prevalance and the threat of

corruption starts with you:

Individually we must obey the law and encourage those around us to do the

same.

There is no shortage of strong anti-corruption legislation in most countries

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but what there is is a failure of observance and enforcement!

So we all need to take personal responsibility and demonstrate that in not

just our words but also in our actions and our deeds! We need to follow the

rules and regulations that are in place to prevent corruption and to report

any breaches of those rules.

There are some basic does and don’t that we should promote:

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These are some basic rules that will help develop a culture or trust,

openness and transparent but we need to do more than simply rely on the

honesty, ethics and the integrity of individuals.

We need to develop a more holistic approach.

The World Bank has developed and promoted six strategies to help prevent

corruption.

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These are:

1. Paying civil servants well

2. Creating transparency and openness in government spending

3. Cutting red tape

4. Replacing regressive and distorting subsidies with targeted cash

transfers

5. Establishing international conventions

6. Deploying smart technology

In additional to following such strategies the ACCA believes that developing

excellent financial infrastructures is as essential to the development of

economies every bit as much as is enhanced physical infrastructure, such

as improved roads and railways, cables for communications and secure

pipelines for water, electricity and oil.

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Such financial infrastructures will limit the scope the for corruption to

flourish. The finance profession has an important role to play in ensuring

that economies thrive and that includes protecting society’s assets be they

financial, physical or human.

So what is the role of the accountant?

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Well as accountants we are seen as:

The gatekeepers of financial probity

The champions of ethical business conduct

And key contributors in influencing the future development of national regimes and practices that recognise and embrace international standards.

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So as accountants we need to ensure that we optimise our resources and

we can do this through:

Co-ordination, communication and collaboration. There is a perception

among law enforcement that there is a lack of information sharing among

key players and stakeholders. More needs to be done to reinforce the value

of reporting and monitoring activities to professionals, the general public and

other stakeholders including the development of appropriate procurement

and contract management procedures. Better publicity about what services

we provide, what they cost and how we fund them is needed to demonstrate

the openness and transparency that is need to prevent corrupt practices.

Measuring effectiveness is important. There needs to be more effective

measurement of success and the demonstration of value for money. The

development strong financial management and reporting will help

demonstrate value for money and enable the assessment the effectiveness.

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Developing a consistent approach. Varied interpretations of regulations by

accountants and auditors within the public sector can lead to different

policies, procedures and training. We need to see clearer and more

frequent guidance from professional bodies and regulators that set clear

expectations and provide clarification of guidance and where possible to

help harmonise and streamline the approach in the future.

And finally, professionalism matters. To uphold the highest professional

standards required to tackle corruption and its effects we must demonstrate

that we follow the ethical standards expected of us as professional

accountants and crucial that we work in the public interest!

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I am sure that as professional accountants you will agree that we are

fortunate – and indeed honoured – to be a in profession that plays an

important role in guiding the future stability of economies and nations around

the world.

Our role as accountants are important to deliver what ACCA calls public

value – that means acting in the public interest, promoting ethical Public

Services and Business and helping grow Economies.

So what does public value actually mean?

Well ACCA believes that accountants play a critical role in an economy through:

• protecting the public interest as advocates of good corporate governance

and consistent global standards;

• promoting and developing knowledge, skills and competence through

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education, certification and CPD programmes ;

• through adoption and implementation of international Professional and

ethical standards they set the bar for behaviour and practice of

accountancy professionals, enhancing public trust ; AND

• assisting with sound public policy guidance and advice on accountancy

related topics by acting as a centre of knowledge and expertise.

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It is my heartfelt belief that accountancy professionals, people like you and

me, can tackle corruption and we can do this because our radar is always

tuned into risk and due diligence. And as a former President of the ACCA I

can tell you that the ACCA believes that excellent public sector financial

management is a vital tool in reducing corruption and the harm that it causes

to society and that this is essential to the development of economies.

There is a saying that there are only two things are certain in life – one is

death and the other is taxes- well I believe that there is a third – corruption.

As I have already said corruption exits in all countries and in all economies –

we will never eliminate it completely- the best we can ever hope for is to

ensure that we reduce it to its lowest possible level - and in doing so we will

benefit society as a whole.

The money we prevent from being diverted to criminals, including corrupt

politicians and officials, will enable the better use of the resources we have

to provide improved infrastructure, healthcare, education and employment

opportunities for our children and families – and to ensure we establish and

promote just and lawful societies that protects all our citizens.

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The finance professional working in the Public Sector, and indeed the

Private Sector, has an important role to play in ensuring that the services

we deliver and the economies we support, thrive and that corruption and

corrupt practices are not tolerated.

It therefore becomes part of the finance professional’s role to untangle and

simplify funding and resourcing plans so that stakeholders can clearly

understanding the issues as finance and money are so often at the heart of

business strategy, innovation and growth.

And so, the role of finance talent management is crucial in ensuring the we

are able to get the best from the right people.

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That means we need to grow financial expertise and capacity and retain

skills within the public sector.

Without financial expertise, it is difficult for countries to develop the effective

public financial management that will support growth and reduce corruption.

An absence or lack of accountants also makes it difficult for governments to

implement effective financial reporting based on accounting standards, as

only technically trained staff can understand and apply the standards and

without these standards the opportunity for corrupt practices to flourish is

greater.

To manage risk, and to manage opportunity, individuals need professional

training and development. It’s a simple thing to say, but this is a massive

policy area we need to address it globally.

To be an excellent leaders and managers, my experience tells me that

individuals need a magical mix of natural aptitude and talent, great

interpersonal skills, coupled with training, development and loads of

commitment.

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Ladies and gentlemen, if we are to serious reduce the levels of corruption

that I highlighted in the Transparency International Corruption Index then we

can no longer continue with: ‘business as usual’ in the public sector.

Business ‘as unusual’ is increasingly the norm, were our work, whether in

the public sector or private sector, in a large or small organisation, is prey to

instability and risk. But it is also a place where there is opportunity and

where innovation can flourish.

I have little doubt that most of us here have a shared belief in the value of

excellent public sector financial management. And I hope that we can all

agree, accountability and transparency are crucial to public sector finances.

But how is this achieved? It is achieved through building financial capacity

and expertise in the public sector. And these are needed to ensure

openness and trust in public sector finances. It is public sector finance

professionals – the likes of us here today – that play the important role of

custodians of the reputation of this essential sector.

As many of you are well aware, the public sector has felt the full effects of

the global economic crisis – and continues to do so even as the private

sector shows sign of recovery.

Ensuring that the public sector can continue to deliver within tight budgets

makes it increasingly important to ensure that corruption is eliminated and

resources are wisely used so need to have more fully qualified accountants

working in the sector, as well as ensuring that more non accountants have

an enhanced financial awareness to support them in their decision making

and use of precious resources. Simply put, there is a critical need to build

financial capacity and expertise in the public sector.

This capacity and expertise is needed to ensure openness, trust and

accountability in public sector finances. We should never forget the crucial

role we play as custodians of the reputation of this essential sector.

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And that ladies and gentlemen, concludes my presentation. I hope you have

found it a helpful introduction to the panel discuss and and speaking of

introductions now let me introduce you to the other members of the

discussion panel!

The Panel

Chair: Anthony Harbinson, FCCA and former ACCA President

Panellists:

Vickson Ncube, chief executive, Pan African Federation of Accountants

(PAFA)

Stephen Emasu Public Financial Management Expert, and Chair, ACCA

Public Sector Global Forum

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