Fraud not an increasing issue

23 May 2007
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24 May 2007

Half of buyers think fraud in procurement is not a growing problem, the latest SM poll has found.

The survey of 100 buyers revealed 12 per cent thought it was an increasing problem and 38 per cent were unsure of its extent. This comes after research by KPMG revealed procurement staff are responsible for 9 per cent of company fraud cases worldwide.

Respondents said growing recognition of procurement as a way to generate savings meant extra scrutiny and less opportunity for fraud. Some added the transparency provided by e-tools with spend management prevented much illegality, while one said "red tape" in the public sector helped limit such crime.

Several claimed there are instances of fraud where buyers may not recognise it as such. Todd Marshall, vice-president for procurement consultancy Acuity Sourcing, said: "I have seen procurement people share competitor information and skew vendor data to influence internal selection committees. This is often an executive's justification for letting outsiders, or consultants, manage certain sourcing initiatives."

One buyer said global sourcing meant dubious local practices may enter supply chains, with backhanders in some countries seen as legitimate.


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