Causes Of Fraud In Public Sector Procurement

With the economy in global recession and fewer and fewer organisations are getting public sector contracts, will this pave way for corruption? Well, businesses may be desperate for a government contract, but I don’t think the lack of business could result to fraudulent activities because the procurement process is being thoroughly carried out by the procurement professional/s. This is so if you are in the ‘developed nations’ as the developing countries’ procurement processes are still being developed.

According to the report by the Guardian.co.uk, the risk of corruption may be increased if staff move from public to private sector and vice-versa.

Private sector expertise can benefit the public sector – as Lord Browne pointed out in his March report on running major government projects – and ministers should be able to recruit the expertise they believe they need

However, the increasing movement of staff between the public and private sectors raises the risk of corruption.

Public servants must demonstrate exemplary standards when taking private sector jobs. The behaviour of senior military officials who took private sector lobbying positions within two years of retirement could be argued to have fallen short of those standards.

In my opinion, a corrupt person will always be corrupt regardless of where they are based, public or private sector. However, with the scrutiny and accountability involved in public sector procurement processes, there will always be less corruption, when compared with the private sector.

In September 2102, for example, Philip French, the former chief technology officer at the Ministry of Justice, joined Steria a year after the company had won a major contract from the department. There is no suggestion of any breach of the rules in this case and French’s appointment was cleared by the government’s business approval committee.

For many years, there have been secondments from the private sector into government departments; there will inevitably have been some conflicts of interest between those of the seconding organisation and the department. Such risks could be heightened if ministers are allowed to recruit their own small private office teams, as was suggested in February and as proposed in a recent paper by the Institute for Government.

What can bring about corruption in either public or private sector? The act of greed and the lack of transparency… can lead to corruption.

The position of special advisers is also a potential risk. Special advisers’ jobs are not secure and most “spads” will no doubt need to find private sector jobs at the end of their tenure.

One form of corruption in the public sector globally is when public sector officials or politicians make policy and spending decisions in favour of certain industries or suppliers, for private gain.

How can we detect fraud in any organisation’s procurement process? What happens if I use my position to influence my daughter in securing a job?

This form of corruption can be difficult to detect, particularly if the reward is delayed or takes the form, as has happened in some cases, not of immediate cash or gifts, but of jobs or positions for family members.

Should the government do more to prevent fraud in the public sector, and what protections or rewards are to be given to whistleblowers?

The National Fraud Authority’s annual fraud report will be out soon. It must address this issue and propose how safeguards should be strengthened. Deterrents should include a strong charter for whistleblowers, stricter controls on accepting appointments after leaving public sector employment, a government procurement organisation that is independent of departments and ministers, and greater scrutiny by the National Audit Office.

Read the rest of the report at the Guardian.co.uk

How can we prevent fraudulent activities in any procurement process and what should the government do to increase transparency and put a stop to corruption in public sector procurement?

What would you do if you were in a position to help a family member secure a job, and you can use your power to influence the job even if they are NOT qualified for the position?

What can we do to further reduce public sector procurement fraud?

What are the consequences of procurement fraud?

These two questions will be dealt with in my next post; be on the lookout.

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