Wednesday, 18 January 2017

Procurement Fraud on the increase - you are vulnerable too

The 2016/17 Global Fraud and Risk Report by Kroll has just been published and it indicates an increase for 17% to 26% in 'vendor, supplier or procurement fraud'.

We've been discussing procurement fraud for some time and only yesterday Spendmatters' Peter Smith raised the question of why those involved risk their careers and potential jail sentences for such low returns. I think the answer to Peter's question is not only greed but the probability that the perpetrators will not be caught and the easy of completion.

What I have often come across are processes which are so fundamentally weak and lacking in robustness that I remain amazed how organisations are not more aware of the significant risks they face - are they in denial or just unaware?

The reality is that no organisation can have zero risk of supplier, vendor or procurement fraud but all can certainly take steps to reduce vulnerability - you may find my whitepaper of interest.

The publication of Kroll's Report provides an opportunity for those in procurement to highlight this risk, ask how it is being addressed corporately, and take the lead in developing a robust approach. Let's remember that the Bribery Act places a responsibility on organisations to prevent fraud - that's not passive but about being proactive in identifying vulnerabilities and taking steps to reduce the risks.

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