23 June 2009 | Rebecca Ellinor
Fraudsters are stealing $500 billion worldwide from government stimulus funding totalling $5 trillion, according to the Kroll Global Fraud Report.
The investment packages set by world leaders at the G20 London Summit are inadvertently leading to more chances to commit fraud.
Blake Coppotelli, senior managing director in Kroll's business intelligence and investigations practice, said: "Agencies controlling the distribution of these funds need to enhance their already stretched resources to oversee and enforce robust anti-corruption policies. They also need to make sure vendors receiving funds have strong anti-corruption initiatives and compliance programmes, and are screened and monitored throughout the process."
Kroll said that government spending is often targeted by fraudsters because the nature of the projects - large sums of investment coupled with complex procurement processes - provide the motive and the means for opportunists.
Bribery watchdog Transparency International found that corruption can raise procurement contract costs by at least 10 per cent in a stable economy. In emergencies, costs can rise as high as 30 per cent of the overall contract.
Kroll offers this guidance to governments:
• Tendering processes should be as transparent as possible, including - but not limited to - the distribution, receipt, and use of funds, and the procurement of contracts paid for by these funds.
• Agencies and vendors should be held accountable for instituting and/or complying with transparent processes.
• Government investigators and regulators must be properly resourced with budgets that enable them to root out corruption.
• Rewards should be provided to officials who deliver projects successfully and appropriate salaries should be used to discourage bribery.