The National Fraud Authority has published its October 2011, detailed report on public sector procurement fraud, examining new approaches to both reducing fraud risk and making processes quicker and simpler.
Public sector procurement fraud is a complex problem, in most cases going undetected, resulting in billions of pounds worth of annual losses. In January 2011 the NFA published an indicative estimate of £2.4 billion of losses to procurement fraud in the public sector.
The October report states that a definitive lack of awareness and understanding of public sector procurement fraud creates an environment where it can flourish. Therefore, in order to prevent public sector procurement fraud:
“What is required is a consistent and comprehensive strategy involving all elements of a counter fraud response including prevention, detection, disruption, investigation and sanction” (The National Fraud Authority- Procurement Fraud in the Public Sector)
The report outlines three immediate opportunities for intervention:
• Spend & recovery audits
• Procurement fraud training
• Changes to government procurement policy
As well as the above immediate opportunities, the report also offers ideas on a medium term strategy and a case study of Crossrail’s counter fraud plan.
David Noble, Chief Executive Officer of the Chartered Institute of Purchasing & Supply (CIPS) said: “It is sad and disappointing that fraud is still prevalent in procurement. It is also disheartening that so few companies have a fraud control strategy firmly in place. Companies should work to resist this unacceptable and unethical behaviour. We should all play a part in this resistance by becoming whistle blowers whenever fraud crosses our path.
At CIPS, all of our members have to sign up to our code of ethics and act accordingly and to ensure good practice is encouraged and fraudulent behaviour is not tolerated.
For more information, the full report is available to download free from The Home Office Website.