Fraud in Procurement: not as uncommon as you think
We have been reading a report on procurement fraud which states that XXX (the organisation) Risk Management Policy was seven years out of date and DOES NOT RECOGNISE PROCUREMENT AS AN AREA REQUIRING SPECIAL ATTENTION.
XXX (the organisation) does not have adequate measures in place to prevent fraud and corruption in its procurement activities
Mr XX (the offender) had corrupt relationships with business associates which enabled him to fraudulently obtain benefits for himself and others totalling $490,267.50 from projects he managed over a six year period
Weaknesses in XXX financial controls and poor supervision of Mr XX underpinned his corrupt behaviour
Mr XX maintained a covert relationship with an engineering consultant
There were no written contracts between XXX and each consultant and contractor
Mr XX circumvented his limited delegated authority
Mr XX pleaded guilty to 10 counts of corruption and got four years imprisonment
If you are in a senior procurement position in your organisation please ask the question ‘What do we do to manage our procurement risks, including the potential for fraud? You could take a relatively low cost approach using Procurisk. You may be amazed that the above situation could arise BUT IT DID! Try Procurisk for free.
Please contact our Managing Director, Brian Farrington, if a confidential discussion would be helpful. In the first instance drop him an email to the email address shown below.
Dr Brian Farrington PhD MSc BSc (Econ) FCIPS
Brian Farrington Ltd
Tel 01744 20698