Updated: Jul 31, 2020
Organisations that have procurement, fraud and corruption training and awareness at the heart of their ethos not only have a greater opportunity to develop internal capabilities and retain expertise but also have an increased ability to develop an understanding of the risk that the organisation faces and an increased aptitude to respond to these risks.
The value of education as part of an organisation 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 for and organisation.
An organisations ability to measure the impact that education has, in the majority of cases is never considered and yet one of the consequences of an increase in awareness is that in the majority of cases there will be an increase in identification and reporting of risk. Introducing training and awareness can:
create a starting point in measuring risk mitigation because of the increase in information and understanding of risk
enhance an organisations ability to profile its risks. If we can more accurately profile risk, then there is a greater opportunity to more effectively use our finite procurement and anti-fraud resources
drive organisation policy where new risks are identified
BENEFITS OF EDUCATION
When we educate organisations around the key procurement risks including fraud and corruption methodologies including people that can influence the procurement process, areas of risk within the procurement lifecycle and how an organisation should investigate and build a risk mitigation model, not only allows an organisation to reflect on their current performance but on many occasions there is a light bulb moment because there is a realisation that fraud is currently ongoing within their organisation or that there are significant gaps in their procurement and anti-fraud compliance regime. Such examples and response that we've seen have included:
The introduction of field compliance teams to monitor the performance of projects in key risk areas. Has the supplier completed the work and is it the right quality, quantity or specification?
The creation of a data analysis team to scrutinise the organisations own data for known fraud and corruption methodologies and 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 organisations 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
Inability to carry out an investigation where allegations have been received because the organisation doesn’t have the capability or, 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 program but should be an integral part of an organisations strategy to mitigate risk and protect its revenues and designed around an organisations risk. Fraud and corruption methodologies are continually changing that are 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 on 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.
But the question remains, if a leader doesn't believe the facts how do you change into an anti-fraud culture?