Home > Preventing corruption > Knowing your risks > Gifts and benefits

Gifts and benefits

Public officials need to have a very clear understanding of what to do when they are offered a gift or benefit and the implications of accepting a gift or benefit.

The offer of gifts or benefits can present a corruption risk because it has the potential to affect the impartiality and integrity of the agency in carrying out its functions.

Gifts and benefits may be offered out of gratitude and goodwill for a job well done. However, gifts and benefits can also be offered as a subtle form of influence – to create a favourable impression or to gain preferential treatment. Acceptance of a gift or benefit can create a sense of obligation that may compromise impartial and honest decision making.

The improper acceptance of gifts or benefits can constitute corrupt conduct as defined by the Independent Commission Against Corruption Act 1988.

Corruption risks

A risk assessment of the gifts and benefits procedures in a public sector agency is likely to identify some or all of the following corruption risks:

A public official being influenced by gifts to provide favourable treatment or turn a blind eye to regulatory breaches.
The acceptance by employees of gifts or benefits leading to a perception that their official decisions are open to influence and bribery.
A perception that the only way to win work with an agency is to offer additional gifts or benefits discouraging reputable suppliers and contractors.
A public official who accepts gifts (even if the gift had no influence) being accused of accepting bribes.

Managing corruption risks

As a minimum your agency should:

Introduce policy and procedures for the management of gifts and benefits that contain elements listed in the Policy Development Guide and Checklist (see Tips and tools below).
Include in the policy sanctions for any breach of the policy and procedures. Record all gifts and benefits offered, received and the justification for why they were received.
Train all relevant employees in the policy and procedures so they are aware of their accountabilities.
Review the policy every two years.
Refer to the management of gifts and benefits in related corporate documents such as codes of conduct.
Include the management of gifts and benefits in the agency's internal audit process and corruption risk management process.
Encourage employees to take reasonable steps to ensure their family members are not the recipients of gifts or benefits that could be perceived as an attempt to influence the public official.
Prohibit employees from accepting cash and gifts under any circumstances.
Prohibit employees from soliciting personal gifts or benefits under any circumstances.

Risk management strategies

Following your risk assessment of the management of gifts and benefits you should consider these risk management strategies:

Introducing more restrictive rules for employees who work in more senior positions or functions that are more exposed to potential bribes such as inspectors, enforcement officers or key decision makers.
Introducing a rule that if the refusal of a gift is ignored the gift is regarded as the property of the organisation and the incident is documented.
Ensuring transparency in the disposal of gifts to avoid any perception that individual employees or community members are benefiting either inadvertently or improperly from this process.
Giving employees, who carry out high risk functions, additional support and training in the management of gifts and benefits.

Case studies

Case study 1: Tickets to the footy
A rural council reported that several employees had attended a State of Origin rugby league game in Sydney at the invitation of a company that provided services to council. The benefits included transport, tickets and hospitality. Council investigated the allegations and found that a number of employees had attended the game. One employee was invited to attend by a long-term friend who worked for the company and had asked a council colleague if he wanted to take a spare place. Neither had any involvement in engaging the company or council work. It appeared from the investigation that the company did not intend to influence the employees involved. However, the employee's acceptance of the hospitality raised the possibility that they might be favourably biased towards the company. This case highlights the difficulties that can emerge when personal relationships overlap with public duty. Because the individuals were employed by the council, and the company provided services to council, they should have considered the offer of hospitality in an official rather than a personal manner. The ICAC suggested that the council inform contractors about their expectations about contractor interaction with council employees.

Case study 1: Tickets to the footy

A rural council reported that several employees had attended a State of Origin rugby league game in Sydney at the invitation of a company that provided services to council. The benefits included transport, tickets and hospitality.

Council investigated the allegations and found that a number of employees had attended the game. One employee was invited to attend by a long-term friend who worked for the company and had asked a council colleague if he wanted to take a spare place. Neither had any involvement in engaging the company or council work. It appeared from the investigation that the company did not intend to influence the employees involved. However, the employee's acceptance of the hospitality raised the possibility that they might be favourably biased towards the company.

This case highlights the difficulties that can emerge when personal relationships overlap with public duty. Because the individuals were employed by the council, and the company provided services to council, they should have considered the offer of hospitality in an official rather than a personal manner.

The ICAC suggested that the council inform contractors about their expectations about contractor interaction with council employees.

Case study 2: Revising gifts and benefits policy
A council sought advice from the ICAC concerning a recruitment process. The council engaged a private recruitment firm to do the recruiting for a new administrative position. An internal applicant was successful in gaining the position. Once the successful applicant had commenced in the position the recruitment firm sent the applicant a $25 gift voucher. The applicant declared the voucher and registered it in council's gifts and benefits register. The council was unsure how to proceed as its gifts and benefits policy did not allow gifts of cash but did not take gift vouchers into account. The ICAC advised that council needed to review its policy to make sure that it covered all types of gifts that might be offered to employees considering in particular: Did it consider a gift voucher to be the same as a cash gift? Did it consider $25 to be of significant value? What did it think was the recruitment's firm intention in giving the applicant the gift voucher? Could the acceptance of the gift lead to a perception of future biased decision making?

Case study 2: Revising gifts and benefits policy

A council sought advice from the ICAC concerning a recruitment process. The council engaged a private recruitment firm to do the recruiting for a new administrative position. An internal applicant was successful in gaining the position. Once the successful applicant had commenced in the position the recruitment firm sent the applicant a $25 gift voucher.

The applicant declared the voucher and registered it in council's gifts and benefits register.

The council was unsure how to proceed as its gifts and benefits policy did not allow gifts of cash but did not take gift vouchers into account.

The ICAC advised that council needed to review its policy to make sure that it covered all types of gifts that might be offered to employees considering in particular:

Did it consider a gift voucher to be the same as a cash gift?
Did it consider $25 to be of significant value?
What did it think was the recruitment's firm intention in giving the applicant the gift voucher?
Could the acceptance of the gift lead to a perception of future biased decision making?

Case study 3: Monetary thresholds for gifts
In 2008 the ICAC investigated allegations of gifts given to a local council planning official to encourage favourable assessment of planning applications. The gifts comprised $1,000 cash and jewellery with a retail value of more than $800. The council's code of conduct prohibited employees accepting anything from someone who had an application before the council for determination. It also prohibited the acceptance of gifts with a retail value over $50. In this instance these provisions created ambiguity because although the official was in the process of assessing an application, she thought the jewellery was worth less than $50. The ICAC found that giving these items to the official constituted corrupt conduct, because they were given with the intention of influencing the official's assessment of the planning applications. The ICAC recommended changes to the council's gifts and benefits policy that included removing monetary thresholds for accepting gifts, as they can create an impression that the policy permits employees to accept gifts below a nominated value regardless of the circumstances.

Case study 3: Monetary thresholds for gifts

In 2008 the ICAC investigated allegations of gifts given to a local council planning official to encourage favourable assessment of planning applications. The gifts comprised $1,000 cash and jewellery with a retail value of more than $800.

The council's code of conduct prohibited employees accepting anything from someone who had an application before the council for determination. It also prohibited the acceptance of gifts with a retail value over $50. In this instance these provisions created ambiguity because although the official was in the process of assessing an application, she thought the jewellery was worth less than $50.

The ICAC found that giving these items to the official constituted corrupt conduct, because they were given with the intention of influencing the official's assessment of the planning applications.

The ICAC recommended changes to the council's gifts and benefits policy that included removing monetary thresholds for accepting gifts, as they can create an impression that the policy permits employees to accept gifts below a nominated value regardless of the circumstances.

Resources

ICAC publications

Bribery, corrupt commissions and rewards - tip sheet, June 2006

Managing gifts and benefits in the public sector - toolkit, June 2006.

Other publications

NSW Premier's Personnel Handbook Model Code of Conduct – Chapter 8, NSW Department of Premier and Cabinet, (updated in September 2005)

Public Sector Agencies Fact Sheet number 07: Gifts, NSW Ombudsman, 2004

The Model Code of Conduct for Local Councils in NSW, Department of Local Government, December 2004

Receiving gifts and benefits: Managing the risks. Building Capacity Series Number 8, Crime and Misconduct Commission (Qld), Brisbane, June 2006

Managing the Receipt of Gifts: A Guide for Councillors and CEOs Prevention Pointer Series Number 6, Crime and Misconduct Commission (Qld), Brisbane, June 2004