Royal Household and Royal Marsden Hospital – a right royal collection of (alleged) procurement fraud

Two recent trials highlight the continued need for focus on corruption and fraud in procurement and related areas.

A former property manager at the Royal Household has been accused of taking bribes from suppliers in return for awarding them contracts for building and related work in the Royal Palaces. Ron Harper, from Glemsford, Suffolk, worked as the deputy property manager from 1994 until suspension in 2012. He appeared at Westminster Magistrates' Court last week with eight other men and one woman, who all indicated not guilty pleas. The trial is set to begin at Southwark Crown Court on 12 August.

It is alleged that Harper received benefits (over £100,000) from suppliers who won contracts improperly. He received an oil tank and boiler system for his home free of charge, for instance. And in some cases, the prosecution claim that inflated prices were paid for the work in order to fund the cost of the bribes.

We shouldn’t speculate too much as the case hasn’t started , but I guess Royal Palaces aren’t covered by EU procurement regulations? But I wonder whether there were well-defined procurement policies and procedures, covering ‘separation of duties’ and all those good things we know can protect against just such issues. If these weren’t in place, then perhaps the CFO or similar should share some blame. Where there is scope for fraud through poor or non-existent policies and procedures, top management should take some of the blame along with the perpetrators.

In another case, a group of people were found guilty of a more sophisticated fraud against the National Health service. Stacey Tipler exploited her job in the accounts at the Royal Marsden NHS Trust to alter payment details. She substituted account numbers of pharmaceutical firms who were due payment with the details of men recruited by her partner Scott Chaplin, diverting over £600K that should have gone to suppliers into their accounts, and ultimately shopping sprees and mortgage payments.

Whilst this was more sophisticated in some ways than many frauds, it has of course one major flaw. Eventually, it was always going to be obvious that suppliers weren’t being paid, and they would raise a fuss about that. It’s hard to see how the conspirators thought they could get away with that for long, but it only really came to light when invoice payment responsibility was passed to the NHS Shared Business Services operation.

The lessons learnt here must be around the importance of controlling the supplier onboarding process, checking all information is valid, and then having controls on who can change data in the system. But this was a relatively sophisticated fraud so we will be a little less hard on the CFO in this case. A full end to end e-invoicing approach would presumably have stopped this, as the visibility of payment (or non payment) to the supplier would have been much more transparent more quickly. So there’s another benefit to add to the list of e-invoicing positives.

And two more cases to add to our Big Book of Procurement Fraud...

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