Financial Disclosure Statements: tool to ensure protection of public funds

Muscat: A Financial Disclosure statement (FDS) is one of the many tools adopted by the State Audit Institution (SAI) to protect public funds and to avoid any conflict of interest.

Fahad bin Ahmed Al Farsi, manager of the Financial Disclosure Department at SAI, said that a FD statement is used to protect public funds and provides an insight into a government officials' financial status to identify any trace of illegitimate wealth that they may have amassed during their tenure with the government.

Using the FD, the government official acknowledges their own and their family’s financial status especially their children (who are under the age of 18). These funds may be in cash, real-estate, movable assets or immovable assets (both inside and outside the Sultanate). The funds can also cover stocks, bonds and shares in companies and cash balance. The FD must also clearly state the family’s rights and debts.

According to Omani law, the term 'government official' includes every individual occupying a government position, temporarily or permanently contracted with one of the entities of the State Administrative Apparatus, whether paid or unpaid.

Moreover, members of the Oman Council, government representatives in companies, staff working in the State Owned Enterprises (SOEs) or those companies of which the government owns more than 40 per cent shares, are all deemed 'government officials'.

In addition to the above points, the tool assists in avoiding conflict between private and public interests.

Al Farsi also highlighted that because of the significance of this tool, the United Nation Convention against Corruption (UNCAC) provides for the necessity to establish effective systems for financial disclosure by member states.

It is in this context that the Sultanate joined the Convention by Royal Decree No 64/2013 issued on November 20, 2013.

Al Farsi indicated that the Sultanate was already applying the Financial Disclosure measure before joining the Convention and it is considered the first country that applies the FD system in the GCC region.

Al Farsi added that the inclusion of the provision of Article 12, relevant to financial disclosure in SAI Law for the Protection of Public Funds and Avoidance of Conflicts of Interest, issued by Royal Decree No. 112/2011, delegated SAI’s chairman to issue a financial disclosure statement for government officials.

SAI acted upon the provision and issued resolution No. 101/2012 on the FD for government officials on 14 November, 2012, which was published in the 990 edition of the official gazette.

SAI worked on executing the resolution requesting civil service officials, to whom provision applies, to submit their FDs.

Al Farsi stressed that the FD requests government officials to disclose all types of funds owned by him/her, his/her spouse and children under the age of 18. Al Farsi has also added that the FD applies on Omani or non-Omani government officials alike.

Moreover, Al Farsi mentioned that the FD has been in force since its issuance in 2012. Ever since, SAI has been examining and assessing the practical implementation of the FD in line with world advancements and best practices.

The review resulted in enhancing the FD statement by the issuance of SAI Chairman resolution No. 61/2016 which has been in effect since August 2016. Al Farsi added that updating the FD statement resulted in an enhancement in both structure and substance. The FD statement document can be easily accessed online through SAI website (www.sai.gov.om). The new FD online window contains FD documents both in Arabic and English. The new version also contains additional data in order to ensure the comprehensiveness of the FD.

Al Farsi said that because of such amendments, SAI worked on boosting awareness about the enhanced FD through conducting several workshops for the relevant stakeholders and publishing informative material through audio, visual and printed media.

Al Farsi added to ensure government officials are well aware of the information requested and fill-in the FD statement accurately, SAI prepared an FD Manual on how to fill-in the FD statement issued by resolution No. 61/2016.

The manual, which is also available on SAI website, includes a detailed definition for each term used in the FD statement and some useful instructions. Furthermore, SAI provided contact details to answer any enquiries relevant to the FD statement as well as other contact numbers to provide technical support.

Al Farsi also highlighted that SAI handles government officials’ FDs and is bound by professional secrecy, which is granted by virtue of the Law for the Protection of Public Funds and Avoidance of Conflicts of Interest. No one has the right to access such statements whatsoever unless a prior consent is granted by SAI chairman. A special department was also established for this that reports directly to SAI chairman. Its primary task is to handle all matters relevant to the management of those financial disclosures.
In addition, Al Farsi said that the Law for the Protection of Public Funds and Avoidance of Conflicts of Interest provides for penal sanctions according to Article 15 that may reach up to two-year imprisonment.

The sanctions shall be imposed against persons in violation of the provisions of Article 12 — relevant to the FD — whether this violation is by the refrain from providing the FD or the submission of inaccurate/incomplete information. SAI works on contacting those who submit their FDs, whenever required, in order to ensure the completeness of the FD or take legal procedures in case of violation.

Al Farsi indicated that SAI, and through a number of standards and parameters, works on taking all legal purposes when examining and analyzing FDs. In case some funds are deemed to have no definite source, SAI would investigate the case and collect all evidence available in coordination with competent authorities. If criminal suspicion is assumed, the case is then referred to the Public Prosecution to take the applicable legal procedures with this regard.

Al Farsi said that ever since the request mandated for FDs, SAI has spared no effort to ensure effective implementation of its jurisdiction. It is worth mentioning that the request of an FD from any government official doesn’t necessarily mean that there is a criminal suspicions as it is a legal procedure prescribed by law to protect both the declarant and the State’s public funds.