Procurement-Related Fraud: On the Rise? (Part 1)

Today on Spend Matters PRO, Peter Smith begins a series on procurement-related fraud, looking to discuss the following questions:

  • Why might fraud be on the increase, and is the problem likely to get worse?
  • How is fraud being executed?
  • Finally, what should procurement executives be doing to counter the threat?

"As we say, there have been a plethora of recent examples of procurement-related fraud. We tend to think of the archetypal procurement fraud as involving somebody inside the organisation and someone outside – a supplier or a pseudo-supplier. But it's interesting that the recent UK cases have shown the variety of fraud, and have demonstrated that you don't need two parties."

One recent case (that we might define as a classic of its genre) saw the head potato buyer of Sainsburys (the UK's second or third-largest supermarket chain), colluding with senior staff at a potato supplier. The buyer paid over the odds for the potatoes and the extra income went into a slush fund managed by the supplier, which was used to pay the buyer via both pure cash and through trips to expensive hotels and similar.

In another example, we heard of MOD staff tipping off a favoured supplier and providing them with confidential information to help them win contracts in return for payments received from that supplier."

Want more? This is just one of many examples of the new, in-depth analysis and coverage on Spend Matters PRO. Other recent examples include:

Oracle Fusion Procurement: Building Out From a New Nucleus (Part 2)
What happens when you increase a supplier's costs?
Spend Matters Vendor Analysis: GEP (Formerly Global eProcure) -- Part 3

- Sheena Moore

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