On many occasions it has been a challenge to persuade leaders of the benefits of procurement, fraud and corruption education and how it can positively impact various roles within an organisation, and although the possibilities and value of such education can be quite significant, many leaders don’t see or believe that education on the basics of procurement and fraud risk mitigation can have such a positive financial impact.
When you cover areas such as risk, prevention and detection including how to design out fraud and corruption risk within an organisation, the benefits are difficult to avoid.
Staff understanding the typologies of procurement fraud and corruption, areas of procurement at risk, how and where it can be committed allows them to understand what risk looks like within their working environment and how they can respond to these risks in their own areas of responsibility. It also allows each member of staff to understand how they fit into the organisation’s anti-fraud strategy.
On many occasions people that have attended courses suddenly realise having been given live case examples, that the conduct and behaviours that has gone on in their organisation warrants further scrutiny.
Organisations have introduced field compliance teams because they recognise that there is a gap in their contract management and compliance regime, that include where there are regular failures in equipment, resources can be tasked to check the route cause of the problem and whether there are bigger concerns.
Others have recognised that there are many information sources within their organisation that aren’t being considered as part of its organisation risk assessment and that they are at a much greater risk from the US Foreign Corrupt Practices Act and UK Bribery Act than they realised. Examples have included, event management contracts organised by Human Resource departments that included the management of cash for these events, increasing the fraud and bribery risk to the organisation that had previously gone unnoticed.
Others have recognised that there aren’t the reporting systems within the organisation to receive information or allegations. Creating a team to collect and analyse its own data sources gave it a greater ability to profile and respond to its own risks.
NEW APPROACH TO RISK WITHIN PROJECTS
Teaching the basics of project risk assessment and an outline of British Standard BS10501: Guide to Implementing Procurement Fraud Controls, gives an organisation the ability to assess its approach to procurement fraud risk within projects and create a risk register that sets the foundation of assessing and monitoring risk within projects and protecting revenues of the organisation. Projects are another example of where the risk of fraud is rarely assessed prior to its implementation and yet once given an insight into its value, through basic project risk evaluation training can have a significant impact.
The point in much of this is that discussing procurement risk, global fraud typologies and risk mitigation strategies through educating an organisation on risks and where they may be targeted, gives a greater opportunity to protect revenues and its reputation.
THE POWER OF RISK ASSESSMENT
In a recent comment within the Review into the risks of fraud and corruption in local government procurement, MLCLG local government respondents confirmed that although risk assessment was carried out, they highlighted that training in this area was necessary.
There are a number of reports and assessments globally including PWC, KPMG, ACFE and Kroll that highlight global fraud and corruption threats and in cases the financial impact of procurement fraud and corruption at a national level and yet few governments globally focus on procurement fraud investigation or have developed a national strategy to enhance risk mitigation. Education is at the centre of any strategy because a natural consequence in awareness of fraud methodology and control measures to mitigate risk should be an increase in reporting of suspected illicit behaviour.
MEASURING IMPACT
And finally, the introduction of awareness and training will also create a starting point that can measure the benefits of education and the performance of a risk mitigation strategy. Whether its the increased reporting or information sharing, the increase in cases or the measurement of revenues protected or recovered. So when asked whether training can have a benefit to an organisation, it isn’t just guess work the figures speak for themselves.
So does your organisation treat education and awareness as an integral part of preventing procurement fraud and corruption and protecting organisation spend.