Public sector officers are from time to time offered gifts during the course of their work, normally by customers or suppliers. Accepting gifts can be appropriate, depending on the circumstances – for example it may involve useful networking or information sharing, but even then caution is advisable. If not properly managed, accepting gifts can cause a real or perceived conflict of interest if the recipient has authority to influence agency decisions in favour of the person or company giving the gift. Management therefore need to provide staff with clear guidance on the circumstances where acceptance of gifts is appropriate or inappropriate. Agencies also need to ensure they have controls, such as gift registers and monitoring of key processes associated with procurement and contracting decisions, to prevent gifts being used to influence decisions of public sector officers.
Section 9 of the Public Sector Management Act 1994, requires employees to act with integrity in the performance of official duties and to comply with their agency’s code of conduct. Agencies generally include policies for receiving and accepting gifts in their code of conduct. Under the Public Sector Commission’s Conduct Guide, agencies are required to consider conflict of interest within their codes of conduct.
We previously performed audits of agency gift registers in 2012 and 2015. Those audits reported the need to improve most aspects of gift management.
The focus of this audit was to determine if agencies had suitable policies and practices in place for the management of gifts received. Gifts were defined as any item of value, including goods, services, money or hospitality offered to or received by an employee, without payment, as a consequence of their employment.
We assessed the practices at 8 agencies, including 1 agency from the 2015 audit. The audit covered a 9 month period from 1 January to 30 September 2017. Our lines of inquiry were:
1. Do agencies have appropriate policies for instructing and guiding staff in dealing with gifts?
2. Do agencies maintain a suitable register to record, describe and authorise the acceptance of gifts?
3. Do agencies train or make staff familiar with policy requirements and monitor compliance?
We conducted this across government benchmarking audit (AGBA) under section 18 of the Auditor General Act 2006 and in accordance with Australian Auditing and Assurance Standards. AGBAs assess and benchmark agencies against common business practices to identify good practices and control weaknesses so that agencies, including those not audited, can compare their own performance.
The overall result reflects an improvement in the management of gifts since our last audit in 2015. At most agencies, management were periodically reviewing the gift register to identify any potential conflicts. However, most agencies need to improve their policies, ensure that acceptance of gifts is independently approved in a timely manner, and improve gift records.