How simple is it to commit fraud

when it comes to your people, process and control risk?

Client case examples

• In their bid submission on a government eProcurement system
• a technical fault didn’t allow the bid transmission.

The end users contact details were on the system

1. end user told vendor to submit bid to their email address
2. after closing date, bid was extended for a week

A second client example on the same system

• bid submitted for a different requirement
• called back and told that bid price was too high and to resubmit
• at closing date, bid was extended for a week

Both events to different end users on the same government system

Highlighted several corruption risks

1. Personal contact information was listed on the bidding documents
2. No bid security within the submission process, creating
3. Opportunity for insider bid manipulation and bid rigging
4. End user and not procurement team managed system

All in all…

a well-known global eProcurement system was set up improperly

that allowed for corruption to flourish.

If you are assessing the risks within your procurement systems

In addition to assessing your procurement system and bidding process

1. introduce an independent reporting line for bidders to raise concerns
2. take a quality approach after each bid exercise looking for error or irregularity

Always ask why there is non-compliance with procedures

and 

dig until you are satisfied with the root cause.

It may be error or it may be a bigger corruption problem.

Integrity in eProcurement systems can reduce fraud

but…

a few changes and your system can be easy to circumvent.

Remember, your insider is your biggest threat.

Test the integrity of your procurement system today.

What fraud detection techniques do you use?

Do you risk assess your procurement systems for an insider threat?