Six Key Strategies to Avoid Procurement Fraud

One of the significant problems faced by organizations and stores of all kinds and sizes is business fraud. While fraud comes in many forms, it can be majorly categorized into asset misappropriation, financial statement fraud, and corruption. Most of these fraud categories are internal.

According to the 2014 Report to the Nation on Occupational Fraud and Abuse, a typical organization loses 5% of its annual revenues to fraud, which is quite a significant amount to any company. The Association of Certified Fraud Examiners further estimates that most of these losses are due to employee theft. Prevention of fraud is more fruitful than recovering from losses after a scam.

Probity in Procurement

The broad objectives of probity in procurement relate to the integrity and honesty in procurement transactions. These include provide accountability; maintaining private sector integrity; ensuring compliance with processes; ensuring that all offers will be evaluated against the same criteria; preserving public and supplier confidence in the organisation’s processes; minimizing potential conflicts and the potential for litigation; ensuring the procurement activity provides the best outcome; and avoiding potential for misconduct, fraud and corruption.