Johannesburg — THE government's fight against financial misconduct has sharply reduced losses of money by national and provincial departments through corruption, fraud and theft.

A report released by the Public Service Commission yesterday will go a long way in backing the government's assertion that it is taking corruption seriously.

Although not all departments reported to the commission how much money they had lost due to misconduct, the R45,7m lost last year is significantly less than the R120,5m in 2004-05. However, the report says the government has recovered only R3,2m so far .

Commission chairman Stan Sangweni told reporters in Pretoria that 771 cases of financial misconduct were reported for 2005-06, compared with the 513 of the previous financial year. The rise in the number of cases was due to departments putting in place more effective means of risk management to detect misconduct.

"I suppose one can also say the decrease with regards to the cost ... would seem to speak to the effectiveness with which departments have put in place control measures," Sangweni said.

Independent business analyst Reg Rumney said while any improvement was welcome most corruption appeared to be at local government level. "It shows that systems are working, and the situation is not completely hopeless. But we need to look at local government where most of the corruption now happens. It affects ordinary people," he said.

Sangweni also attributed the increase in the number of cases detected to more departments reporting to the commission.

The only department that failed to submit a report was the Gauteng education department.

Commission director-general Odette Ramsingh said Gauteng reported the fewest cases, but the province could have ranked higher had the education department submitted its report.

Eastern Cape was the province with the highest number of cases of misconduct with land affairs topping this list in losing R20m -- its treasury lost a mere R154,84, the smallest loss detected.

Ramsingh said the highest number of misconduct cases involved public servants entrusted with handling state money and procurement of goods.

" Clearly there are problems around internal controls and supervision because ... in many cases these are people promoted to supervisory positions and suddenly have ready access to cash and procurement of goods."

Commissioner Koko Mashigo said some cases were due to lack of financial management skills.

Criminal proceedings were instituted against employees in only 25% of cases versus 31% in the previous financial year. In the 771 cases, 81% of employees were found guilty of financial misconduct against 77% in 2004-05.

Ramsingh called for a tightening of laws as accounting officers have to report the criminal aspect of financial misconduct only if amounts exceed R100000.

"Legislation should look at this particular gap because the threshold of R100000 is far too high. I think one cent of public money criminally spent is one cent too much," she said.

It is believed that the solution was partly due to the efforts of Public Service and Administration Minister Geraldine Fraser-Moleketi to introduce new remuneration packages to attract and retain skills.

Democratic Alliance public service and administration spokesman Karel Minnie called for action against guilty officials.