Why public sector entities must enhance whistleblower programs

The Eastern Africa region ranks highly in corruption perception levels as per statistics by Transparency International (TI) and probably fares worse in capacity to combat fraud. While it is appreciated that governments in the region have established oversight institutions such as for the case of Uganda; the Office of the Auditor General (OAG), Statehouse Anti-Corruption Unit, the Inspector General of Government (IGG); and for Kenya, the Ethics and Anti-Corruption Commission (EACC), there is still more that needs to be done especially with respect to whistleblower programs. We have seen a number of high-profile cases coming to the fore as a result of whistle-blower tip offs. For example, the Mara heist and Anglo-leasing scandals in Kenya, and the OPM Scandal in Uganda were unearthed because of whistle-blower tip offs. This re-emphasises the need to consider the salient role whistleblowing channels play in the detection and deterrence of fraud and corruption improprieties.

Whistleblowing is one of the most effective means of facilitating detection of fraud and corruption in Eastern Africa and globally. The 2022 PwC Global Economic Crime Survey - Eastern Africa report highlighted that whistle-blower tip offs continue to play an inordinately big role in the detection and deterrence of fraud in the region. Moreover, statistics from the 2022 Occupational Fraud Report issued by the Association of Certified Fraud Examiners (“ACFE”) after an examination of over 2000 occupational fraud cases across 133 countries, indicate that roughly 42% of the fraudulent activities were detected as a result of whistle-blower tip offs. This was nearly three times the number of incidents detected in comparison with the next most effective method (internal audits).

The role of whistleblowing can be further appreciated through statistics of reported corruption cases in Uganda and Kenya. For example, in June 2023, the Inspector General of Government (IGG) in Uganda reported that they were investigating 5,000 cases of corruption that had been reported through the whistle-blower channel. We have also observed the EACC launch some investigations on multi-billion-shilling corruption allegations in government ministries, agencies and corporations originating from whistle-blowers. It is also worth noting that the IGG in Uganda encourages the public to report corruption cases to the IGG’s office with an incentive of getting 5% of the stolen money once it is recovered as provided for in the Whistleblowers Protection Act. While Uganda has a Whistle-blower Protection Act that provides for protection of whistle-blowers from victimisation, Kenya does not have such a law that would provide clear guidelines on the security of a whistle-blower. Talk of a whistle-blower protection bill has been going on for a while now and was introduced in the Kenyan Parliament in 2021 but is still on the shelves. Absence of a whistle-blower protection legislation inhibits potential whistle-blowers from stepping forward in fear of victimisation.

Based on our experience while conducting forensic investigations and fraud risk assessments in the region, we have noted that a number of organisations and entities in the public sector still have room for improvement in their whistle-blower programs. For example, a number of institutions do not have stand-alone whistle-blower policies. Others lack independent reporting channels to the extent that some require staffff to only report to their immediate supervisors. In this case, the reporting channels do not provide employees with safe options that could allow them to report fraud and corruption without fearing retaliation. In some organisations, employees are not aware of their organisations’ whistle-blower channels. This means that any potential whistle-blowers would hesitate to report cases of fraud and corruption that they came across for fear of retaliation. It is also important for oversight institutions to take action on whistleblower reports in a timely manner and give feedback to the whistle-blowers so that people feel that there is value in reporting fraud cases. This does not seem to be the case at the moment in both Uganda and Kenya.

Having appreciated the role of whistle-blowers, one would naturally ask the question “what would happen if whistle-blower programs were enhanced to facilitate safe, confidential, and anonymous reporting? Suppose organisations cultivate a culture that encourages whistleblowing by both staffff and the external parties, what would be the effect?” You guessed right! The number of reported fraud and corruption cases would naturally rise not because more fraud cases are being committed but because more of these cases are being reported. This would give organisations an opportunity for early detection of fraudulent behaviour and acting on culprits. It would also act as deterrence among the would-be fraudsters and corrupt officials within the organisation and set a tone of zero-tolerance to fraud and corruption. This is why the public sector must enhance their whistle-blower programs if they are to tackle fraud and corruption.