Regulatory functions 2018-07-18T16:18:26+00:00

REGULATORY FUNCTIONS

Local government carries out important regulatory functions through enforcing government controls and restrictions on specific activities conducted by the public sector.

Within its jurisdiction of general competence, local government is multifunctional and regulates diverse activities.

These involve a wide and diverse spectrum of instruments, such as rule-making, approvals (permits, approvals, registrations, consents or licences); notifications, inspections, directions (order, direction or notices to control activities); imposition of penalties/fines, taking court proceedings to enforce regulations, seizing documents or goods or impound goods or animals; referrals of regulatory matters to state agencies; undertaking works without the consent of the owner or occupier of a premises/property; evicting persons from land or premises, levies and charges, etc.

Because of its role and impact, the integrity of regulatory functions becomes a matter of growing concern. The bigger the power of regulators to grant significant benefits, or impose restrictions or penalties, the higher the risk that local government will be exposed to various types of integrity violations. Increasing complexity adds to the risk levels, making it necessary to maintain an adequate risk management strategy.

INTEGRITY RISKS

An integrity risk assessment of the regulatory functions may identify some or all of the following integrity risks/ risk factors (the list is not limited):

  • Officials fail to declare CoI in exercising regulatory functions. Officials solicit or accept a bribe in order to exercise, or not exercise, their regulatory powers in a certain way. Officials grant approvals without authorization.

  • Officials falsify documents to aid a third party, or present false information.

  • Officials do not enforce certain regulations against undue benefit (i.e. eviction order). Officials are “closing the eyes” and not imposing legal sanctions where required against undue benefit, or are imposing softer sanctions.

RISK MANAGEMENT STRATEGIES

Following the risk assessment, the local government may consider the following risk management strategies as development points:

  • Introduce clear and comprehensive policy/procedures for regulatory functions per categories. Communicate them effectively (through intranet, website, internal meetings, trainings, etc). Train all relevant staff (induction and continued training). Ensure consistent implementation of CoI rules in exercising the regulatory functions. Prohibit officials from engaging in any conflicting parallel employment.

  • Communicate publicly the professional standards to be expected when local government exercises its regulatory functions (i.e. use client service charter; information leaflets, website).

  • Consider opportunities to use e-solutions to issue licenses, permits, etc., to increase effectiveness, efficiency and transparency and provide a proper audit trail.

  • Conduct further individual corruption risk assessment for functions that are critical for the local government, or that focus attention on existing signals/evidence for abusive behaviour. Map red flags and develop and implement risk-based treatment measures/ operational controls.

  • Implement rigorous supervision and effective control mechanisms over fieldwork. Ensure relevant and available internal capacities to conduct necessary field work (i.e. adequate number of staff, appropriate competence of staff, etc). Implement integrity operational controls in the field work visits (i.e. supervision on a random, unscheduled basis without prior notification; rotation of officials, as appropriate; working in pairs when conducting fieldwork). Ensure field work is covered by adequate documented information to leave a reliable audit trail.

  • Practice separation of functions, as appropriate (i.e. separate assignment of regulatory work from implementation). Institute a second tier of review of final documentation by authorized personnel, such as supervisors, as appropriate.

  •  Strengthen oversight and control mechanisms to test compliance of completed tasks with relevant documentation, legal and operational requirements, and management of CoI. Hold periodic formal work reviews of officials exercising regulatory functions. Conduct ad-hoc and unplanned check-ups. Schedule inspections so regulators cannot choose the inspection targets and dates.

  • Improve feedback generation system to survey clients’ satisfaction with exercise of regulatory functions and use it as an “early warning” system.

GUIDE TO CORRUPTION-FREE LOCAL GOVERNMENT