Updated: Aug 29
Corruption risk mitigation is not a one-time investment; it's an ongoing commitment to vigilance and proactive measures.
Corruption and associated financial crime can cripple an organisation's reputation. Can measuring the performance of a risk mitigation approach demonstrates a commitment to ethical business practices and builds trust with stakeholders.
Do organisations or national anti-corruption programmes have the impact that they would like? Organisations that have procurement risk, fraud, and corruption training and awareness at the heart of their anti-corruption culture not only have a greater opportunity to develop internal capabilities and retain expertise but will also have an increased ability to develop an understanding of the risk that they face and a better aptitude to respond to these risks.
The value of education as part of an organisation's strategy to protect its revenues from procurement fraud and corruption risk can never be underestimated, not only in building capability but transforming into an anti-fraud culture. One of the challenges is persuading senior management of its value and the positive impact that it can have on an organisation.
The ability to measure the impact that education can have, in the majority of cases is never considered, and yet one of the consequences of an increase in awareness is that in many instances there will be a rise in the identification and reporting of risk.
STARTING FROM THE END
Within the planning process particularly within national training programmes, asking the question 'what do we want to achieve as a result of the training', can help with the design of the programme including roles and expertise that should be introduced to the training. Dependent on the outcomes you wish to achieve, such questions might include:
How can education and awareness assist with the response to the national anti-corruption risk assessment.
Can a standardised risk assessment help measure an organisation's current performance.
How can enhanced communication and engagement between organisations benefit all including shared risk information and best practice.
What approach can be used to assess and enhance risk mitigation and what measurement can be introduced to monitor performance.
By harnessing the power of data analysis, organisations can mitigate the risks of corruption, ensuring transparency and accountability in their supply chains
DESIGN YOUR ANTI-CORRUPTION APPROACH
To maximise the benefits and reach of an anti-corruption training programme, consideration should be given to the various training methods.
eLearning - procurement fraud risk and the various typologies including how and where an organisation can be targeted
Assignments - that furthers a students initial learning through the assessment of their organisation's current approach to risk mitigation
Virtual - sharing information on the various methods of implementing a risk identification and mitigation approach
Face to face - in depth training on a coordinated and strategic approach to risk mitigation including assessment of projects
mentoring - enhancing the specialist knowledge and expertise of individuals working within the field of procurement fraud and corruption risk
BENEFITS OF EDUCATION
When organisations are made aware of the key procurement and finance risks including fraud and corruption methodologies, highlighting the insider threat that can influence these processes, areas of risk within the procurement lifecycle, and how an organisation should design and build a risk mitigation model, it allows leadership to reflect on an organisation's current performance. On many occasions, there can be a light bulb moment because of a realisation that fraud is ongoing within an organisation or that there are significant gaps in the procurement and anti-fraud or corruption compliance regime. Such examples and responses that we've seen from training have included:
The introduction of field compliance teams to monitor the performance of projects in key risk areas. Verifying whether a contractor has completed the work invoiced for, and is of the right quality, quantity, or specification that also includes further monitoring where product failures are identified
The creation of a data analysis team to scrutinise organisation data for known fraud and corruption methodologies that helped create an organisation risk profile
listening to live case examples and methodologies created a realisation that the change in vendor to build a new warehouse could have been improperly influenced
Introduction of a compliance department because of an organisation's inability to manage and respond to whistle-blower complaints securely
The creation and introduction of anti-fraud policies and the annual sign-off by staff
Creation of a compliance team due to an inability to carry out an investigation where allegations have been received and as an example, investigation work is given to inexperienced procurement managers to complete.
RESPONSE TO RISK
Education should not be a tick box response as part of a procurement risk, anti-fraud or anti-corruption programme but should be an integral part of an organisation's strategy to mitigate risk, to protect revenues and designed around an organisation's risk. Fraud and corruption methodologies are continually changing, highlighted by the quantity of national and global cases and companies reported on in the press.
To keep informed of these new methods and assess whether they impact your organisation and sector, risks should be always under review. The cost of an organisation’s awareness of procurement, procurement fraud, and corruption risk can be small in comparison to the values of risk or loss identified because of the training and awareness.
THE FIGURES DON'T LIE
in addition to the many benefits already described a key area of persuasion is the collection of data from the anti-corruption or procurement fraud mitigation training. The list is not exhaustive but might include:
increase in hotline reports
increase in allegations and number of investigations
values of fraud or corruption identified and loss prevented
monies recovered under the contract for inflated or falsified invoices
decrease in maintenance requirements or product failures
reports received from individuals receiving training
comparison of training cost to the level of fraud or other financial crime prevented or detected
But the question remains if a leader doesn't believe the facts how do you change into an anti-fraud culture?
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