13 February 2003 | David Arminas
A massive increase in corporate fraud is a sharp reminder to procurement professionals that they need to keep a close eye on potential corruption, according to a new study.
The value of fraud cases heard in UK crown courts last year more than trebled to £717 million, according to the latest figures from KPMG Forensic's annual Fraud Barometer.
Dave Alexander, a fraud investigation partner at the consultancy, warned that purchasers were in the front line of defence against fraud and must know how to protect themselves and their company.
He told SM: "Our studies show that procurement is the area that is most susceptible to fraud, so purchasers need to improve their understanding of the risks and how to spot signs of trouble."
He urged purchasers to beef up their processes, allowing so-called whistleblowers to disclose evidence in confidence.
"We find that the person most likely to detect a fraud is an employee, so make sure they can approach someone like the procurement director."
The study, which looked at legal actions involving amounts of more than £100,000, found that the average value of a fraud case doubled to £8.6 million.
A CIPS position paper on fraud published in September 2002 urges purchasers to report wayward buying practices to senior management.