Contract and procurement fraud
Preventing Contract and Procurement Fraud
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| Preventing Contract and Procurement Fraud
Procurement schemes have certain characteristics that make them difficult to detect and prevent. This is partly because these schemes can take on various forms, can occur in any stage of the procurement process, and tend to take place over a long period. Adding to this difficulty is the fact that most perpetrators have specialised knowledge that allows them to exploit weaknesses in the procurement system, concealing most fraud indicators from anyone not involved in the acquisition process. Establishing an effective proactive procurement fraud detection and prevention programme is a multi-step approach. But generally, a programme designed to prevent and detect contract and procurement fraud should include, among other things, the following elements: Employee education Internal controls Monitoring activities Vendor due diligence Employee Education Organisations should educate their employees about procurement fraud, but generally, organisations should focus education efforts on employees who are in the best position to identify vulnerabilities or red flags of procurement fraud. In fact, there is no greater tool in the detection of procurement fraud than a network of employees who are knowledgeable about fraud and look for indicators of their organisation’s vulnerabilities. Internal Controls Organisations’ management must also analyse their organisation’s internal controls and enhance them as necessary to eliminate procurement risks. Key internal controls include, but are not limited to: Segregation of duties Supervisory controls Receiving controls Authorisation/approval controls Reconciliation controls Recording controls Download 0.62 Mb. Share with your friends:
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