Are you struggling to introduce an anti-corruption programme? 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 the organisation faces 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. Introducing training and awareness can:
assist the measurement and adequacy of current control measures
enhances an organisation's ability to profile its risks. If you can more accurately profile risk, then there is a greater opportunity to more effectively use finite compliance, audit, and anti-corruption or counter procurement fraud resources
introduce or update policy where new risks are identified
BENEFITS OF EDUCATION
When we educate organisations around 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, that allows its leadership to reflect on their current performance. On many occasions, there can be a light bulb moment because of a realisation that fraud is ongoing within their organisation or that there are significant gaps in their 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 and is it 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 its own 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 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 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?