Disruption as an enabler of corruption

group of people walking across building lobby

Agencies of modern public administration expand, contract, reorganise and reform on a regular basis.

It is sometimes not appreciated that times of restructure can provide motivation and opportunities for corruption.

Expanding agencies can attract corrupt individuals to new projects, programs and processes, while contracting agencies may reduce the safeguards and controls that help prevent corruption. Restructures can expose weaknesses in the policies, procedures and systems of agencies, making them prone to exploitation by corrupt individuals. Times of reform and disruption also add to the uncertainty, stress and divided attention of staff, making corrupt conduct harder to detect.

In addition, reporting channels can break, malfunction or be redirected during restructures. Staff responsibilities might become disordered or dissolve, information integrity withers and management capabilities and oversight shrink.

Integration of systems can also be poorly implemented, and new system implementations might experience teething problems. The longer these systems remain in a state of unrest, the more their vulnerabilities will reveal themselves to potentially malicious actors.

The capacity of an organisation to manage corruption risks can be sorely tested when the constancy, scale or speed of change is overwhelming. Security specialist David Porter notes:

Change is the fraudster’s friend, and industries or businesses where there are high levels of organizational or process change will be particularly vulnerable. So too are businesses where there is unchecked staff authority, high staff turnover or low staff morale.[1]

In his evaluation of the practices, policies and procedures of SafeWork SA, Commissioner Lander spoke of increased corruption, misconduct and maladministration risks within the agency as a result of a decade of continuous change.[2]

In order to manage the corruption risks inherent in organisational change, it is important to understand the associated corruption risks.

The first consideration is to confront “people” issues: declining morale, staff retrenchment, politicking and competition for places and resources, clashing values and work cultures, staff resistance, sabotage, change fatigue, survivor syndrome, can all wreak havoc on the workplace. In the SafeWork SA Evaluation the Commissioner observed that the continuous change had had “a negative impact on workplace culture”.[3]

The second challenge of organisational change is to make sure the control environment is maintained. Some of the ways in which the control environment can be protected during times of change are:

  • Ensure that clear structures and leadership are maintained or implemented.
  • Apply expanded scrutiny to any changes to major functions such as asset management, procurement systems and information systems.
  • Slow the pace of change in those areas most vulnerable to manipulation and loss of integrity.
  • Use of pilot programs to reduce the scale of change and hence the level of challenge and stress upon the control environment.
  • Increase both the number and frequency of reviews to assess change, and include regular milestone events to measure change.
  • Reduce financial delegations to minimise loss, and force additional checking and approval.

Managing change within agencies can be a disorientating and difficult task. But amidst all this change some things remain constant, such as the public’s expectation that public administration will be free from corruption. This should be the lodestar guiding agencies through all manner of change.

1. David Porter, Insider Fraud: Spotting The Wolf in Sheep’s Clothing, Computer Fraud & Security, April 2003 (3) p. 13.