Dramatic decline in procurement fraud

13 July 2009

14 July 2009 | Jake Kanter

Cost-cutting measures have led to a dramatic reduction in UK procurement fraud over the past six months.

Figures released exclusively to supplymanagement.com by accountant BDO Stoy Hayward showed there was no procurement fraud in the first six months of 2009.

This is compared to the sum of purchasing fraud reaching £1.4 million in the same period last year and £273 million for the whole of 2008 (an increase of 347 per cent on 2007).

The decline came despite total cases of fraud nearly doubling in the first half of this year. Corruption rates up to June were valued at £960 million, compared with £1.2 billion for the whole of 2008.

Simon Bevan, national head of the Fraud Services Team at BDO, said: "As a recession starts, organisations focus on cost reduction and reducing their procurement spend which leads to an initial reduction in such frauds."

But, he added, figures related to civil action cases and just one or two prosecutions could boost the total sum of purchasing fraud significantly. "It's a very hard offence to prove," he explained.

Bevan said more procurement corruption would be uncovered next year as the recession persists and spending data comes under greater scrutiny.


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