Fraud after contract award 6 times as frequent as fraud pre-contract award

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ColinCram.jpgA strong, expert contracting and contracts management group is essential to combat fraud, CIPS Fellow and UK procurement consultant Colin Cram told delegates at Smart Procurement World in September.


Download an event summary here


Failing to use a strong contract management team that understands your various contracts and has the time and resources to manage them correctly increases the risk of corruption occurring. “Corruption is six times more likely to occur post contract award,” warned Cram.


He advised that the way forward is to (1) manage performance against contracts with (2) suitable performance measures determined prior to awarding the contracts.


He emphasised that this must be met with strong anti-fraud controls, which he said are poor in Africa.


“I have not yet seen what I would term a comprehensive anti-corruption strategy in Africa.”

 

Highlight3.jpgDiscussing the scale of Procurement fraud in Africa, Cram estimated that graft in Southern Africa could be as much as $50-billion. Interestingly, he said that 87% of fraud is carried out by men and 13% by women, suggesting that women may be less corruptible (all other variables being equal…)


However, demonstrating the continent’s hunger for ethical practices, he noted that 43% of African fraud is brought to attention by whistle blowers, while as little as 14% is uncovered by internal audit.


“In 15 to 20 years there could be very little corruption in African governments if procurement processes typical of a first-class procurement organisation are adopted.”


Create an anti-fraud culture. “People-controls (such as a fraud hotline, employee support programme, fraud training and a code of conduct) seem more effective than process-controls.”

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