Phones Against Corruption - Papua New Guinea
Department of Finance - Papua New Guinea

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
The administrative capacity of the Government of PNG to deliver basic social services was deteriorating. Despite large revenues from export oriented natural resources and significant foreign assistance, there was very little impact on the standard of living of PNG citizens. Efficient public sector financial management was needed to enable the planning of sustainable levels of expenditures, allocate resources rationally, improve the efficiency of expenditures, and increase transparency and accountability.* Despite the efforts to put in place a Financial Management Improvement Program (FMIP) with the help of ADB, AusAID, UNDP and World Bank costing over USD 60 million (Nov’99 and Jul’08) and further spending from July 2008, GoPNG continued to struggle to bring in transparency and accountability in governance processes adversely affecting delivery of public services to citizens due to public funds lost in corruption. PNG as a country is not only very diverse but also has many challenges due to many regions being very remote and difficult to reach. To address this Government of PNG decided to allocate funds to local level governments so that they can address service delivery on the ground. These funds were disbursed and termed as “Services Improvement Program”. But the Government was still faced with the challenges of good governance, transparency and accountability of Public Officers as the implementation of the Integrated Financial Management System under FMIP has not delivered what it promised and even as of date IFMS has not been implemented in any of the provinces as the degree of technical sophistication in both the development phase and operational phase did not exist in PNG due to lack of sufficient institutional capacity building and physical IT infrastructure within various governance levels. ADB validation report issued in October 2011 titled “PNG: Financial Management Project”* categorically states that the overall project performance was below expectations and carrying out a project performance evaluation is unnecessary. The Department of Finance of the Government of PNG realized that it had no choice but to disburse the Services Improvement Program funds to local governments and at the same time find a solution to curb corruption. This is when the DoF realized that their best chance is to engage in a participatory process mechanism with the citizens to enable them to help good governance by using simple technology that was easy to use. This necessity led to the innovative idea of “Phones Against Corruption” and enabled citizen participation to report abuse of power in delivery of services. *Foot Notes: https://www.adb.org/sites/default/files/project-document/62753/30535-01-png-pcr.pdf - ADB Completion Report – PNG-Financial Management Improvement Project (FMIP) total spending of USD 60.309 million between Nov 1999 and July 2008. https://www.adb.org/sites/default/files/evaluation-document/35546/files/in246-11.pdf

B. Strategic Approach

 2. What was the solution?
Phones Against Corruption (P@C) is an innovative way to expose and combat corruption by using text system (SMS). Effectively, this offers a powerful voice to the citizens to report corruption anonymously using mobile phones to lodge their complaints by sending text messages. Department of Finance (DoF) being the custodian of public funds disbursed has taken the onus to run the program as a pilot within DoF in 2014 and the innovation has been widely used and acclaimed with results indicating slight improvement in the rankings for PNG in the corruption index and it now plans to roll across all governance levels so that the citizens can help the government in fighting corruption.* *Foot Note - Transparency International PNG: http://www.transparencypng.org.pg/newsroom/view/2014-corruption-perceptions-index-offers-a-reminder-and-a-warning-that-abus). PNG has been ranked 136 out of 176 countries on the 2016 Corruption Perceptions Index (CPI) with a score of 28 out of a possible 100 (100 being very clean) as per latest reports of TIPNG. The results are a slight improvement from previous years – with PNG scoring 25 out of 100 (145 out of 174) in the 2014 CPI as a result of the fight against corruption.

 3. How did the initiative solve the problem and improve people’s lives?
PNG rates very poorly on a number of world indicators and for it to improve its ratings it has to fight corruption to usher in ethical governance so that effects of development can trickle down to the weak, the poor and the marginalised at the bottom of the pyramid. • UNDP PNG HDI is rated at 157 out of 187 countries • WGI PNG Corruption Perception Index at 145 out of 175 nations • PNG fell way short of meeting any of its MDG targets • PNG has recently been moved out of FATF gray list. It has to set up AML/CFT NRA process and will be under FATF watch for money laundering and that includes corruption too. • A consensus estimate of loss due to corruption is around 40% • PNG annual budget in 2014 was USD 5.40 billion Even if P@C can help in saving 10% loss by preventing corruption affecting development trickle down, it would still be a significant sum at USD 540 million per year and would provide substantial succour to the weak and the poor and will result in bringing lasting improvements to the quality of life of over 90% of PNG’s 8 million citizens. The poor in PNG struggle for a livelihood and this means the money they earn many times is not even enough to buy food for the family. Hence they depend on the Government to provide them various services like Health, Education, Electricity, Water etc. free or at a highly subsidized cost. They also depend on the Government to supply food at subsidized cost and provide community based services to help youth and women. Despite challenges and constraints, GoPNG has been allocating funds to sub national governments so that they can target developmental activities based on local needs. These are the essentials listed under Goal 1 to 8 of SDGs and Goal 16 is the one that relates to ensuring that Governments put mechanisms in place that guarantee the poor a minimum quality of life. Corruption is abuse of power for personal gain and this happens by misappropriating public money budgeted by the Government to be spent on service delivery. Hence fighting corruption not only directly addresses SDG 16 but indirectly addresses SDGs 1 to 8 as well. This is the reason why Government of PNG is interested in ensuring that this project “PHONES AGAINST CORRUPTION” succeeds as it will ensure its citizens a better quality of life.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
P@C is an innovative way to expose corruption by using text (SMS). Effectively, this offers powerful voice to citizens to report corruption anonymously using mobile phones to lodge complaints by sending SMS. The SMS System: Developed using providers - Mobimedia/Digicel for Technology, UNDP for assistance, DFAT for Funding, VSO for Human Resource, Department of Finance for support. The system is subject to continuous improvement driven by user experience research and alternative ways to expose corruption as complementary approach. To date web portal is developed www.phonesagainstcorruption.org The Awareness Campaign: Involves publicity and awareness to inform citizens about availability of application and as to it being cost free, user friendly and anonymous. During prototyping phase it has been managed according to the target group. When extended to all citizens, the use of all available media will be prioritized. The Actions taken: Involves the follow up mechanism of SMS reports and initiation of action; gathering and analysing the messages after subjecting the data through a process of filtering, scrutiny and prioritisation. The cases are classified by priority into High, Medium and Low. All cases are investigated after due diligence process, without any fear or favour and with utmost secrecy and confidentiality.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
AusDFAT is funding a Financial Management Improvement Program called Provincial Capacity Building (PCaB) under the technical guidance of UNDP PNG and is being implemented by the Department of Finance. The P@C program is a sub component of the PCaB program aimed at reducing corruption and improving governance, accountability and transparency. Initially, the program is implemented as a pilot within the Department of Finance in mid 2014 and all staff of the Department were encouraged to report any type of abuse of power or corruption. As the staff know that they could report and yet remain anonymous, the program gained their trust and acceptance and SMS reports started coming in and this helped the Department of Finance to identify gaps in governance and take suitable remedial measures to plug them. The various anti-corruption initiatives adopted by the Department including this program have resulted in the repeal of the Public Finance Management Act in 2016 that became effective from Jan 01, 2017. The program targeted the Department of Finance Staff across PNG numbering around 1,500 in 2014 and benefitted all citizens that were receiving delivery of services through the Department. Now in 2017 the program wants to progressively target 110,000 staff in PNG public service and will benefit all citizens receiving any type of delivery of services or benefit from any public investment targeted at making life better for the citizens.
 6. How was the strategy implemented and what resources were mobilized?
The innovative idea originated consequent to a request from the Secretary of the Department of Finance to address the concerns being raised in various public discourse forums as to what steps GoPNG was taking to tackle corruption. GoPNG efforts to improve public accountability date back to September 1999 when ADB first considered a proposal from GoPNG to fund a Financial Management System to address concerns related to transparency and accountability of Public Expenditure and Budgeting. However, in September 2010, ADB released a completion report titled “PNG-Financial Management-Project” stating that despite a total project spending of USD 60.309 million by September 2008 the project did not deliver any significant gains. The Department of Finance had expected the Financial Management Improvement Program embarked upon with the assistance of ADB Loan and AusDFAT Donor Funding to deliver significant financial accountability. As the benefits from the Integrated Financial Management System (IFMS) were being delayed due to implementation issues, the Department felt that it needed to take other measures to tackle abuse of power, graft and corruption. One significant measure was signing up for “Better than cash alliance” and deciding to accept all payments into government treasury only through Bank. The other was to pilot the “Phones Against Corruption” P@C initiative within Department of Finance. P@C is based on theories of Action Research and Participatory Process and seeks active participation of society in helping PNG government become transparent and accountable. The Department also realizes that this participatory process mechanism works as long as the Department is able to uphold the trust of the citizens by addressing the issues raised by them and communicate back to them the actions taken and show results of such actions. Once the Department realized this need, then the challenge was to find a way to engage directly with people. This is where the mobile telephony technology has become a boon. Since PNG had issues with digital connectivity, smart phone penetration and user abilities, the decision was to go for simple text messaging systems. P@C system in a nutshell  An interactive text messaging system  Not a mobile application and hence needs no downloading  No internet access required  Can be accessed free of cost  Is anonymous as the technology partner Mobimedia encrypts the phone numbers.  Runs on any basic mobile phone (no need of a smart phone)  Is user friendly  Is available in TokPisin and English The messages received are encrypted to protect identity, recorded, analysed and action taken. As with all systems, improvements are always possible to make the application robust and the Department of Finance is constantly trying its best to incorporate new ideas. Dr. Amanda Watson conducted research on Phones Against Corruption and her paper is published in Discussion Paper Series produced through Australian National University. Three important findings were that P@C was easy to use, quick to respond and intent to use it again. The initiative was conceived to be part of Provincial Capacity Building and was taken up by GoPNG under technical guidance of UNDP assisted by Mobimedia/Digicel/VSO and funded by AusDFAT. The P@C Initiative has been recognised with awards by UNDP Regional Bureau for Asia-Pacific’s Innovation Fund Competition for Best Innovative Approach in the Asia Pacific Region and awarded USD 25,000 in 2014 and 2015 for Prototyping and Scaling up. GoPNG/AusDFAT/UNDP combined have utilized human/financial resources to the tune of well over USD 250,000/- since July 2014. *Foot Note - Asian Development Bank Project No. 30535 & Loan No.1703 for PNG-Financial Management Program: Completion Report issued in September 30, 2010 and Validation Report Reference No. PCV: PNG 2011-30 issued in October, 2011. *Foot Note - Dr. Amanda H Watson’s paper can be accessed at http://ssgm.bellschool.anu.edu.au/sites/default/files/publications/attachments/2016-09/dp_2016_5_watson_and_wiltshire.pdf

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
Corruption and abuse of public funds is a development challenge that can hinder the ability of the public service to deliver vital services to citizens. PNG has realized that Citizen Participation is its best chance to fight corruption as it hinders development and adversely affects the quality of life and the living standards of citizens, especially the underprivileged masses. PNG rates very poorly on a number of world indicators and for it to improve its ratings it has to fight corruption and Phones Against Corruption is an innovative initiative that is helping GoPNG. The stakeholders involved are: 1. GoPNG Department of Finance 2. UNDP PNG 3. Australian DFAT 4. Mobimedia 5. Digicel The team leading the innovation includes development and technology experts, committed officers from Department of Finance/UNDP and Program Staff from AusDFAT. Other partner organisations include Mobimedia, Digicel, VSO and when required or necessary professionals from various supporting organisations. The following people contributed to the design and/or implementation of the initiative: 1. Dr. Ken Ngangan, CPA Secretary, Department of Finance GoPNG 2. Mr. Sam Erepan National Program Coordinator UNDP/DFAT PCaBE 3. Mr. Tito Balboa Zegarra Chief Technical Adviser UNDP/DFAT PCaBE 4. Dr. Cameron Jackson Mobimedia Pty Ltd Private Sector 5. Mr. Tess Wingi First Assistant Secretary, IACD GoPNG 6. Mr. Tom Tiki Assistant Secretary, IACD-DoF GoPNG 7. Ms Naomi Kivi Audit Officer GoPNG 8. Dr. Amanda H Watson Researcher Academician 9. Ramya Gopalan Knowledge Management UNDP RBAP 10. Malika Bhandarkar Innovation Facility Coordinator UNDP HQ NY 11. Maya Shankar Behavioral Insights Team New York, USA 12. Lori Foster Behavioral Insights Team New York, USA 13. Ms Julie Bukikun Head of Governance UNDP PNG 14. Mr. Hisashi Izumi Assistant Resident Representative UNDP PNG 15. Mr. Roy Trivedy Resident Representative UNDP PNG 16. Mr. Appala Saripalli, CPA VSO Volunteer UNDP/DFAT PCaBE

 8. What were the most successful outputs and why was the initiative effective?
P@C program aims to specifically address SDG 16 – “Promote peaceful and inclusive ….. institutions at all levels”. Corruption hinders development process and good governance practices of transparency and accountability. As a result, public funds budgeted to be applied to address other life basic SDGs 1 to 8 are not utilized in full for the purposes for which they are disbursed. A significant part of public funds is lost to corruption. This adversely affects the quality of services delivered to the citizens or in some cases the services are not delivered at all. The acts of corruption destroy the fabric of society and citizens tend to lose faith. When corruption is effectively tackled, it improves the last mile service delivery in areas such as livelihoods, health, education, infrastructure & utilities, gender & youth development etc. This results in improving the living standards and quality of life of the citizens at the bottom of the pyramid and in turn helps improve their individual productivity leading to growth at the micro level. All such micro level growths eventually contribute to national economic growth. The following outputs indicate that the programs of GoPNG to fight corruption are effective: 1. PNG has been ranked 136 out of 176 countries on the 2016 Corruption Perceptions Index (CPI), a slight improvement from previous years – with PNG ranking 145 out of 174 in the 2014 CPI as a result of the fight against corruption. 2. The DoF 323 valid complaints and 77 cases were identified for investigation. 17 cases where investigations were completed resulted in detection of corruption of over 7.50 million Kina. 5 Cases were filed out of the 17 and 2 judgements were handed down for USD 2 Million. 3. In order to devolve power to provinces funds were disbursed to local governments to enable them to design, develop and deliver programs at the provinces. The P@C program helped GoPNG in good governance as citizen participation ensured that complaints of corruption from various provinces relating to abuse were reported. 4. GoPNG has a number of Public Investment Programs across PNG targeting vital infrastructure in Health, Education, Transportation (air/sea/land), Public Works, Communication, Law & Order, Gender, Governance etc. Corruption affects the quality of the infrastructure and the program has been helpful in bringing about transparency and accountability by reporting abuse. 5. The program builds empowers the society by building trust and confidence. *Foot Note - Transparency International PNG: http://www.transparencypng.org.pg/newsroom/view/2014-corruption-perceptions-index-offers-a-reminder-and-a-warning-that-abus).

 9. What were the main obstacles encountered and how were they overcome?
The delays to envisaged implementation of Integrated Financial Management System (IFMS) to allow GoPNG plan, budget, control and monitor public expenditures necessitated the Department of Finance (DoF) to look for alternative means of securing reports of abuse of power or corruption. The old system of physical complaint boxes did not appeal to the public as they were sceptical to use them because of the fear of being identified. 1. Anonymity - DoF by deciding to use mobile phones and seek reports by SMS and creating awareness that the identity of the callers was going to remain anonymous because of encrypting of numbers being done by Mobimedia ensured willing participation of staff/citizens. 2. Telephony & Penetration – DoF realized that smart phone penetration was low especially in rural areas and that people were used to the ordinary mobile phones. Hence by deciding to model the initiative using SMS text, DoF made sure that the tool was made available to all free of charge and hence inclusive. 3. Overcoming the “Wantok” system – By maintaining confidentiality and anonymity, the program was able to overcome the Wantok system as those who report need not fear retribution. 4. Creating awareness – DoF staff were made aware as to how the system would be effective in helping them make public officers accountable and in doing so improve service delivery. This helped in enabling them to embrace the change and report abuse of power without fear. 5. Feedback mechanism – Finally DoF realized from a survey of the respondents that they wanted a built in feedback mechanism to indicate to them statistics of how many complaints were lodged and what actions have been taken in relation thereto. It was then decided to add the feedback SMS at end of every SMS received. This feedback helped build trust and confidence.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
The key benefits directly resulting from the initiative are 1. Reduced losses of public finances due to the awareness that P@C is acting as an effective tool in the hands of the citizens. 2. Increased public confidence in the government functioning and support for the government in its fight against corruption. 3. Formation of a strong and active Government-Citizen Participatory Process to bring in good governance. 4. Improved Public Financial Management as a result of the Public Servants becoming aware of campaigns about the Phones Against Corruption program and actions taken on reports received. 5. Improved quality of public infrastructure and delivery of public services to citizens. 6. Requests from other public sector agencies to extend benefits of P@C program to them so that they can enhance their image. The following instances provide concrete evidence that the system is working and delivering results: 1. A number of reports were received by the Department of Finance relating to abuses of funds disbursed to sub national governments under the “Services Improvement Program”. This enabled the Department of Finance to order investigations into the allegations and actions being taken where there was evidence of abuse. The realization that P@C program is being used to report abuses deterred public officers from abusing their power. This has led to improved delivery of services at the sub national governance levels. 2. A number of reports were received by the Department of Finance relating to public officers at various public sector agencies not following the procurement procedures as laid down under the Public Financial Management Act and resorting to procurement of goods/services without obtaining the requisite number of quotes. All such complaints were investigated and where there were deficiencies, action was taken. 3. A number of instances were reported wherein works carried out by contractors for improving infrastructure like construction of roads, buildings etc. were of a very poor quality. The P@C program enabled such complaints to reach the Department of Finance directly and this allowed them to conduct investigations and take suitable actions which included either blacklisting the suppliers/contractors or initiating action for recovery/restoration. 4. A number of instances of misappropriation of public funds through fraudulent means were brought to the notice of the Department of Finance through the P@C Program. The Department was able to initiate suitable action immediately to address the issues. 5. A number of instances of Public Payroll fraud were brought to the attention of the Department of Finance through P@C program. The Department was able to quickly apprehend the culprits and take suitable action to plug the leakages. The impacts of the program were measured by periodically analysing the various complaints being lodged under the program. Realising the benefits the program has delivered in improving the delivery of services to the citizens, the Department of Finance has now extended the coverage of the program to a number of other agencies/departments. In the next phase, the Department of Finance intends to extend the coverage of the program to all citizens across PNG.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
The initiative had a definite impact on improving the integrity and accountability in public service. The management of public finances in PNG are governed by the Public Financial Management Act (PFMA), Financial Management Manual and Financial Instructions. The PFMA has been revisited in 2016 and has been substantially amended taking into consideration feedback from various sources. The penalties for non-compliance of laid down procedures have become rigorous. AusDFAT/ European Union backed program called “Audit Committee Program” has been made mandatory under the new PFMA 2016. This program makes it compulsory for every public sector agency to hold an audit committee meeting every quarter. The program also makes it compulsory that every Audit Committee must have independent members/observers on the committee and this requirement helps the people to hold the government accountable for losses due to abuse of power including corruption. The P@C program is also reaping the benefits of the Audit Committee Program as it presents a list of all reports received pertaining to the respective agencies and the Audit Committees then take up the report to monitor the issues raised to make the agencies transparent and accountable. In the P@C program pilot stage it was introduced in the Department of Finance and the impacts were measured studying the various complaints being logged and on the basis of investigation reports. The very fact that even high level government public servants and influential personalities were not spared when it came to the question of taking judicial action and securing conviction verdicts is indicative of the fact that the program is working. As of date, there are 43 Audit Committees that have been established and are functioning. The Department of Finance provides the necessary support to establish the Audit Committees and help in their functioning once established. As time progresses, the Department of Finance hopes to have Audit Committees established in all the government agencies. The most significant aspect that is responsible for the program to deliver results is the fact that absolute confidentiality is maintained and the person filing the report remains anonymous. This is possible because of the partnership with Digicel (Telecom Company) and Mobimdedia (Technology Partner). The call logging is initially done by Digicel and forwarded to Mobimedia who encrypt all the phone numbers with a case number and forward the data to P@C. Considering the “Wantok” way of society in PNG, this anonymity really helps.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
The P@C initiative tries to improve governance by encouraging citizens to actively participate in reporting abuse of power or corruption. Hence it has no gender bias. In fact P@C welcomes women/girls take active part in helping the government improve the delivery of services by fighting corruption. GoPNG realizes that improvement of the quality of life of women/girls in any community has a positive correlation to the overall quality of life in society as a whole. The program by targeting corruption intends to ensure that allocated public expenditure reaches the end user that it is intended to benefit. PNG is a society that is very diverse and remote and hence it is highly important that PNG has a system in place to guarantee that every citizen howsoever remote or diverse he might be has a chance to participate in helping the government bring good governance to his door step. The program by curbing corruption will help improve the delivery of public services to diverse groups of citizens in remote areas. Usually it is the most poor and vulnerable that benefit from such improved delivery mechanisms. Hence the program benefits the poor and most vulnerable in societies across various provinces in PNG.

Contact Information

Institution Name:   Department of Finance - Papua New Guinea
Institution Type:   Government Department  
Contact Person:   Tess Wingi
Title:   First Assistant Secretary  
Telephone/ Fax:   +6753037891
Institution's / Project's Website:  
E-mail:   tess_wingi@finance.gov.pg  
Address:   PO Box 710, Department of Finance, Waigani, NCD
Postal Code:   675
City:   Port Moresby
State/Province:   NCD
Country:  

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