DPC gifts, benefits and hospitality policy

Purpose

This policy states DPC’s position on:

responding to offers of gifts, benefits and hospitality
providing gifts, benefits and hospitality.

This policy is intended to support individuals and the department to avoid conflicts of interest and to maintain high levels of integrity and public trust.

The department has issued this policy to support behaviour consistent with the Code of Conduct for Victorian Public Sector Employees, which is binding under section 61 of the Public Administration Act. All employees are required under clause 1.2 of the code to comply with this policy.

Application

This policy applies to all VPS employees, contractors[1], consultants and any individuals or groups undertaking activity for or on behalf of the department. It also applies to administrative offices and DPC entities that have a section 53 (1) (b)[2] exemption under the Financial Management Act to consolidate their Annual Financial statements into the department’s financial statements.

For the purpose of this policy, all workplace participants will be referred to as ‘employees’.

[1] Note clause 1.4 of the Code of Conduct for Victorian Public Sector Employees which provides that public sector employers are to require contractors and consultants to comply with the code and relevant policies and procedures in certain circumstances. Contractors and consultants are only bound by the code if explicitly required by their contract for services.

[2] DPC administrative offices include: Office of the Chief Parliamentary Counsel, Office of the Governor, the Public Record Office of Victoria,
Service Victoria, Office of the Victorian Government Architect, and the Local Government Investigations and Compliance Inspectorate.

Entities consolidated into the DPC Annual Report under Section 53 (1) (b) of the FMA 1994 include: the Victorian Multicultural Commission, the Victorian Veteran’s Council and the Office of the Victorian Information Commissioner.

Policy principles

This policy has been developed in accordance with requirements outlined in the binding Minimum accountabilities for managing gifts, benefits and hospitality (Appendix A) issued by the Victorian Public Sector Commission (VPSC).

This policy is underpinned by the following principles:

Public interest

All employees must place public interest above their private interest when carrying out official duties. Employees have a duty to serve the government of the day, through its Ministers, and by:

acting apolitically and providing frank and fearless advice to government
complying with legislation and government and departmental policies
performing their roles fairly and reasonably and adhering to the principles of natural justice
applying the public sector values (Respect, Accountability, Integrity, Impartiality, Responsiveness, Leadership and Human Rights) set out at section 7 of the Public Administration Act 2004
adhering to the Code of Conduct for Victorian Public Sector Employees
not accepting gifts, benefits or hospitality that could raise a perception of, or actual, bias or preferential treatment
not accepting offers from current or prospective suppliers
not accepting offers from those about whom they are likely to make business decisions.

Accountability

All employees are accountable for:

not engaging in the soliciting of gifts, benefits and hospitality for themselves or others
declaring all non-token offers of gifts, benefits and hospitality
declining all non-token offers of gifts, benefits and hospitality, or where an exception applies under this policy, seeking pre-approval to accept the offer the responsible provision of gifts, benefits and hospitality.

Employees with direct reports are accountable for:

overseeing management of their direct reports’ acceptance or refusal of non-token gifts, benefits and hospitality
modelling good practice and promoting awareness of gifts, benefits and hospitality policies and processes.

Risk-based approach

DPC, through its policies, processes and audit and risk management committee, will ensure gifts, benefits and hospitality risks are appropriately assessed and managed.

Individuals with direct reports will ensure they are aware of the risks inherent in their team’s work and functions and monitor the risks to which their direct reports are exposed.

Definitions

Gifts

Free or discounted items and any item that would generally be seen by the public as a gift. These include items of high value (e.g. artwork, jewellery, or expensive pens), low value (e.g. small bunch of flowers) and consumables (e.g. chocolates). Fundraising by public sector organisations that is consistent with relevant legislation and any government policy is not prohibited under the minimum accountabilities.

Benefits

Preferential treatment, privileged access, favours or other advantage offered to an individual. This may include invitations to sporting, cultural or social events, access to discounts and loyalty programs, and promises of a new job.

The value of benefits may be difficult to define in dollars, but as they are valued by the individual, they may be used to influence the individual’s behaviour.

Hospitality

The friendly reception and entertainment of guests. Hospitality may range from light refreshments at a business meeting to expensive restaurant meals and sponsored travel and accommodation.

Conflicts of interest

Actual conflict of interest:

A real conflict between an employee’s public duties and private interests.

Potential conflict of interest:

An employee has private interests that could conflict with their public duties. This refers to circumstances where it is foreseeable that a conflict may arise in future and steps should be taken now to mitigate that future risk.

Perceived conflict of interest:

The public or a third party could form the view that an employee’s private interests could improperly influence their decisions or actions, now or in the future.

Supplier

Company or individual that supplies goods or services to the public sector organisation or could reasonably be expected to seek to supply goods or services to the public sector organisation. This is consistent with the definition adopted by the Victorian Government Purchasing Board in its Supplier Code of Conduct.

Business associate

An external individual or entity which the organisation has, or plans to establish, some form of business relationship, or who may seek commercial or other advantage by offering gifts, benefits or hospitality.

Legitimate business benefit

Gifts, benefits and hospitality accepted or provided for a business purpose, in that it furthers the conduct of official business or other legitimate goals of the organisation, public sector or State.

Public official

As defined under section 4 of the Public Administration Act 2004. Public officials include:

public sector employees
statutory office holders
directors of public entities.

Gifts Benefits and Hospitality Register

A record, preferably electronic, of all declarable gifts, benefits and hospitality. It records the date an offer was made and by whom, the nature of the offer, its estimated value, the raising of any actual, potential or perceived conflicts of interest or reputational risks and how the offer was managed. For accepted offers, it details the business reason for acceptance and the officer approving the acceptance.

Token offer

The offer of a gift benefit or hospitality that is offered as a courtesy or is of inconsequential or trivial value to both the person making the offer and the individual.

Whilst the primary determinant of a token offer is that it would not be reasonably perceived within or outside the organisation as influencing an individual or raising an actual, potential or perceived conflict of interest, it cannot be worth more than $50 (including cumulative offers from the same source over a 12-month period).

Non-token offer

The offer of a gift benefit or hospitality that is, or may be perceived to be by the recipient, the person making the offer or by the wider community, of more than inconsequential value.

All offers worth more than $50 are non-token offers and must be recorded on a gifts, benefit and hospitality register.

Management of offers of gifts, benefits and hospitality

This section sets out the process for accepting, declining and recording offers of gifts, benefits and hospitality.

Any exceptions to this process must have the prior written approval at Deputy Secretary level.

A Gifts, Benefits and Hospitality Decision Tree has been created to step you through the process.

Token offers

A token offer is an offer of a gift, benefit or hospitality that is of inconsequential or trivial value to both the person making the offer and the individual.

It may include promotional items such as pens and note pads, and modest hospitality which would be considered a basic courtesy, such as light refreshments offered during a meeting.

Whilst the primary determinant of a token offer is that it would not be reasonably perceived within or outside the organisation as influencing an individual raising an actual, potential or perceived conflict of interest, it cannot be worth more than $50.

If token offers are made often by the same person or organisation, the cumulative value of the offers over 12 months, or the perception that they may influence the recipient, may result in the offers becoming non-token.

Individuals may accept token offers of gifts, benefits and hospitality without prior approval or declaring the offer on DPC’s Gifts, Benefits and Hospitality (GBH) register.

DPC employees must refuse all offers (with the exception of token hospitality, such as beverages or sandwiches over a lunchtime meeting or invitations to free seminars on legitimate business topics):

made by a current or prospective supplier
made during a procurement or tender process by a person or organisation involved in the process
made by a person or organisation the DPC employee will likely make a decision involving approval of grants
made by a person the DPC employee will likely make a decision involving recruitment.

Non-token offers

From the 1 July 2017, hospitality offered by State public sector organisations will not be recorded where it is offered as part of official business and where the reason for attendance is consistent with the organisation’s functions and objectives, and with the official’s role.

In short, you do not need to declare the above invitations from State public sector organisations. However, you do need to declare invitations from Commonwealth, Local Government and other State Government jurisdictions.

A non-token offer is an offer of a gift, benefit or hospitality that is, or may be perceived to be by the recipient, the person making the offer or by the wider community, of more than inconsequential value.

The DPC threshold for token offers is $50. All offers valued over $50 are considered as non-token offers.

DPC’s position is that all non-token offers should be declined, however, there will be some exceptions where there is a legitimate business reason for accepting a non-token offer (see section 5.3).

DPC employees must refuse all non-token offers:

likely to influence them, or be perceived to influence them, in the course of their duties or raise an actual, potential or perceived conflict of interest
by a person or organisation about which they will likely make a decision (also applies to processes involving grants, sponsorship, regulation, enforcement or licensing)
likely to be a bribe or inducement to make a decision or act in a particular way that extend to their relatives or friends
with no legitimate business benefit of money, or used in a similar way to money, or something easily converted to money
where, in relation to hospitality and events, the organisation will already be sufficiently represented to meet its business needs where acceptance could be perceived as endorsement of a product or service, or acceptance would unfairly advantage the sponsor in future procurement decisions
made by a person or organisation with a primary purpose to lobby Ministers, Members of Parliament or public sector agencies made in secret.

If an individual considers they have been offered a bribe or inducement, the offer must be reported to Finance and Corporate Governance Branch.

Any criminal or corrupt conduct will be reported to the Independent Broad-based Anti-Corruption Commission and Victoria Police

If you are offered a gift, benefit or hospitality at work, take the GIFT Test to guide your decision-making:

GIFT test

G	Giver	Who is providing the gift, benefit or hospitality and what is their relationship to me? Does my role require me to select contractors, award grants, regulate industries or determine government policies? Could the person or organisation benefit from a decision I make?
I	Influence	Are they seeking to gain an advantage or influence my decisions or actions? Has the gift, benefit or hospitality been offered to me publicly or privately? Is it a courtesy or a token of appreciation or valuable non-token offer? Does its timing coincide with a decision I am about to make or endorse a product or service?
F	Favour	Are they seeking a favour in return for the gift, benefit or hospitality? Has the gift, benefit or hospitality been offered honestly? Has the person or organisation made several offers over the last 12 months? Would accepting it create an obligation to return a favour?
T	Trust	Would accepting the gift, benefit or hospitality diminish public trust? How would the public view acceptance of this gift, benefit or hospitality? What would my colleagues, family, friends or associates think?

Accepting Non-Token Offers - Legitimate Business Reasons

All accepted non-token offers must be pre-approved in writing by the individual’s manager (via a Gifts, Benefits and Hospitality Declaration Form) and be consistent with the following requirements:

it does not raise an actual, potential or perceived conflict of interest or have the potential to bring the individual, DPC or the public sector into disrepute (the ‘GIFT’ test at Table 1 is a good reminder of what to think about in making this assessment)

there is a legitimate business reason for acceptance ie. It is offered in the course of the individual’s official duties, relates to the individual’s responsibilities and has a benefit to the department, public sector or the State.

The business reason for accepting the non-token offer must be recorded on the Gifts, Benefits and Hospitality Declaration Form (Appendix B) and provide sufficient detail to link the acceptance to the individual’s work functions and benefit to the DPC, public sector or State.

This information will also be recorded on the DPC Gifts, Benefits and Hospitality Register, which is required to be publicaly published on the department’s website annually.

Examples of acceptable and unacceptable levels of detail to be included when recording the business reason are below.

Unacceptable:

“Networking”

“Maintaining stakeholder relationships”

Acceptable:

“Individual is responsible for evaluating and reporting outcomes of DPC’s sponsorship of Event A. Individual attended Event A in an official capacity and reported back to the DPC on the event.”

“Individual presented to a visiting international delegation. The delegation presented the Individual with a cultural item worth an estimated $200. Declining the gift would have caused offence. The Gift was accepted, written prior approval was subsequently obtained for the gift, which became property of the department.”

Declaring and recording non-token offers of gifts, benefits and hospitality

Individuals must declare all non-token offers, whether accepted or declined by completing and providing a Gifts, Benefits and Hospitality Declaration Form (Appendix B) to the Finance and Corporate Governance Branch.

Where there is no opportunity to seek written prior approval from their manager prior to accepting a gift or hospitality, the individual must seek approval from their manager and complete a DPC Gifts, Benefits and Hospitality Declaration Form within five business days.

Ownership of gifts offered to individuals

Non-token gifts accepted by an individual for their work or contribution may be retained by the individual where their manager or organisational delegate has provided prior written approval.

Employees must transfer to the department official gifts or any gift of cultural significance or significant value (over $50).

Management of the provision of gifts, benefits and hospitality

This section sets out the requirements for providing gifts, benefits and hospitality.

Gifts, benefits and hospitality may be provided to welcome guests, to facilitate the development of business relationships, to further public sector business outcomes and to celebrate achievements.

Requirements for providing gifts, benefits and hospitality

When deciding whether to provide gifts, benefits or hospitality, or the type of gift, benefit or hospitality to provide, individuals must ensure:

any gift, benefit or hospitality is provided for a business reason in that it furthers the conduct of official business or other legitimate organisational goals, or promotes and supports government policy objectives and priorities
that any costs are proportionate to the benefits obtained for the State, and would be considered reasonable in terms of community expectations (the ‘HOST’ test below is a good reminder of what to think about in making this assessment)
it does not raise an actual, potential or perceived conflict of interest.

The HOST test is a good reminder of what to think about when deciding whether to offer hospitality or gifts to staff or stakeholders:

HOST test

H	Hospitality	To whom is the gift or hospitality being provided? Will recipients be external business partners, or individuals of the host organisation?
O	Objectives	For what purpose will hospitality be provided? Is the hospitality being provided to further the conduct of official business? Will it promote and support government policy objectives and priorities? Will it contribute to staff wellbeing and workplace satisfaction?
S	Spend	Will public funds be spent? What type of hospitality will be provided? Will it be modest or expensive, and will alcohol be provided as a courtesy or an indulgence? Will the costs incurred be proportionate to the benefits obtained?
T	Trust	Will public trust be enhanced or diminished? Could you publicly explain the rationale for providing the gift or hospitality? Will the event be conducted in a manner which upholds the reputation of the public sector? Have records in relation to the gift or hospitality been kept in accordance with reporting and recording procedures?

Containing costs

Individuals should contain costs involved in the provision of gifts, benefits and hospitality wherever possible. The following questions may be useful to assist individuals to decide the type of gift, benefit or hospitality to provide.

Will the cost of providing the gift, benefit or hospitality be proportionate to the potential benefits?
Is an external venue necessary or does the organisation have facilities to host the event?
Is the proposed catering or hospitality proportionate to the number of attendees?
Does the size of the event and number of attendees align with intended outcomes?
Will providing the gift, benefit or hospitality be viewed by the public as excessive?

Records relating to the provision of hospitality, such as approval forms and records relating to procurement and expenditure, must be retained in accordance with their requirements under the Financial Management Act 1994.

Visit the Catering and Hospitality page on the DPC intranet for additional information.

Reporting

The information from Gifts, Benefits and Hospitality forms will also be recorded on the DPC Gifts, Benefits and Hospitality Register. To provide public transparency, the Gifts, Benefit and Hospitality Register will be published annually on DPC’s public website. The register will make public all offers whether accepted or declined valued over $50.

DPC’s Audit and Risk Management Committee will receive a report at least annually on the administration and quality control of the gifts, benefits and hospitality policy, processes and register. The report will include analysis of DPC’s gifts, benefits and hospitality risks (including multiple offers from the same source and offers from business associates), risk mitigation measures and any proposed improvements.

This policy should be read in conjunction with other DPC integrity policies and guidance including:

Conflict of Interest Policy
Fraud, Corruption and Other Loss Prevention and Management Policy
Guide for DPC Staff on Making and Handling Protected Disclosures and Reporting Corrupt Conduct Misconduct Conduct Policy.

Other related policies and guidance include:

Financial Code of Practice (DPC)
Procurement and Contract Management Toolkit (DPC)
Risk Management Policy and Framework (DPC)
Code of conduct for Victorian Public Sector Employees 2015
Code of conduct for Directors of Victorian Public Entities 2016
VPSC’s Gifts, benefits and hospitality policy framework
VPSC’s Managing Conflicts of Interest: A Guide to Policy Development and Implementation

Relevant legislation includes:

Standing Directions of the Minister for Finance 2016 (under the Financial Management Act 1994)
Independent Broad-based Anti-Corruption Commission Act 2011
Financial Management Act 1994
Public Administration Act 2004.

Authorising Officer and organisational delegate

This policy is issued under the authority of the Secretary, DPC and is subject to annual review.

Breaches

Disciplinary action consistent with the relevant industrial instrument and legislation, including dismissal, may be taken where an individual fails to adhere to this policy. This includes where an individual fails to avoid wherever possible or to identify, declare and manage a conflict of interest related to gifts, benefits and hospitality in accordance with the DPC’s Conflict of interest policy.

Actions inconsistent with this policy may constitute misconduct under the Public Administration Act 2004, which includes:

breaches of the binding Code of Conduct for Victorian Public Sector Employees, such as sections of the code covering conflict of interest (section 3.7), public trust (section 3.9) and gifts and benefits (section 4.2)
individuals making improper use of their position.

For further information on managing breaches of this policy, please contact the Finance and Corporate Governance Branch. The department will communicate its policy on the offering and provision of gifts, benefits and hospitality to contractors, consultants and other business associates. Those identified as acting inconsistently with this policy may be subject to contract re-negotiation, including termination.

Speak up

Employees who consider that a gifts, benefits and hospitality or conflict of interest within the Department may not have been declared or is not being appropriately managed should speak up and notify their manager or the Finance and Corporate Governance Branch. This advice should be read in conjunction with the Guide for DPC Staff on Making and Handling Protected Disclosures and Reporting Corrupt Conduct.

The department will take decisive action, including possible disciplinary action, against employees who discriminate against or victimise those who speak up in good faith.

Victorian Public Sector Minimum Accountabilities

Public officials offered gifts, benefits and hospitality:

Do not, for themselves or others, seek or solicit gifts, benefits and hospitality.

Refuse all offers of gifts, benefits and hospitality that:

are money, items used in a similar way to money, or items easily converted to money
give rise to an actual, potential or perceived conflict of interest
may adversely affect their standing as a public official or which may bring their public sector employer or the public sector into disrepute
are non-token offers without a legitimate business benefit
declare all non-token offers (valued at $50 or more) of gifts, benefits and hospitality (whether accepted or declined) on their organisation’s register and seek written prior approval from their manager or organisational delegate to accept any non-token offer
refuse bribes or inducements and report inducements and bribery attempts to the head of the public sector organisation or their delegate (who should report any criminal or corrupt conduct to Victoria Police or the Independent Broad-based Anti-Corruption Commission).

Public officials providing gifts, benefits and hospitality:

ensure that any gift, benefit and hospitality is provided for a business purpose, in that it furthers the conduct of official business or other legitimate organisational goals, or promotes and supports government policy objectives and priorities
ensure that any costs are proportionate to the benefits obtained for the State and would be considered reasonable in terms of community expectations
ensure that when hospitality is provided, individuals demonstrate professionalism in their conduct and uphold their obligation to extend a duty of care to other participants.

Heads of public sector organisations:

establish, implement and review organisational policies and processes for the effective management of gifts, benefits and hospitality that comprehensively address these minimum accountabilities
establish and maintain a register for gifts, benefits and hospitality offered to public officials that, at a minimum, records sufficient information to effectively monitor, assess and report on these minimum accountabilities
communicate and make clear within the organisation that a breach of the gifts, benefits and hospitality policies or processes may constitute a breach of binding codes of conduct and may constitute criminal or corrupt conduct, and may result in disciplinary action
establish and communicate a clear policy position to business associates on the offering of gifts, benefits and hospitality to employees, including possible consequences for a business associate acting contrary to the organisation’s policy position (this must take into consideration any Whole of Victorian Government supplier codes of conduct)
report at least annually to the organisation’s audit committee on the administration and quality control of its gifts, benefits and hospitality policy, processes and register including analysis of the organisation’s gifts, benefits and hospitality risks (including repeat offers from the same source and offers from business associates), risk mitigation measures and any proposed improvements
publish the organisation’s gifts, benefits and hospitality policy and register on the organisation’s public website which should cover the current and the previous financial year (applies only to organisations with an established website)
establish, implement and review organisational policies and processes for the effective management of gifts, benefits and hospitality that comprehensively address these minimum accountabilities.

Contacts for further information

A conflict of interest resulting from the acceptance of a gift, benefit or hospitality may not always clear. Employees who are unsure about a possible conflict of interest, or the application of this policy, should contact the Finance and Corporate Governance Branch for advice.

Governance

Updated 9 August 2019