Hope in the face of rampant corruption and fraud in Procurement

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RudiKruger_2017.jpgRampant corruption and fraud in the public and private sectors have plagued South Africa for many years. However, a glimmer of hope appears to have followed the State of the Nation Address (SONA) in February, after President Cyril Ramaphosa reassured South Africans that corruption, fraud and collusion in the public and private sectors will be fought with purpose and intensity.

"While the country waits to see significant change in addition to the recent cabinet reshuffle, the President's overall commitment to purge corruption is commendable", says Rudi Kruger, General Manager, LexisNexis Data Services.

"President Ramaphosa's assertion during SONA that we should not tolerate the plunder of public resources or corporate crime is reassuring and should motivate those in power within the private and public sectors to strategically tackle corruption, particularly procurement fraud".

2018: the year to turn the tide of corruption

The President declared that 2018 would be the year in which South Africa would turn the tide of corruption in its public institutions. He said that government would continue work on the broad architecture of the state-owned enterprises sector to achieve better coordination, oversight and sustainability. This would include reassessing and changing the way that boards are appointed so that only people with expertise, experience and integrity serve in these vital positions. Board members would be removed from any role in procurement and government will work with the Auditor-General to strengthen external audit processes.

"The recent action we have taken at Eskom to strengthen governance, root out corruption and restore its financial position is just the beginning. Government will take further measures to ensure that all state-owned companies fulfil their economic and developmental mandates", said President Ramaphosa.

The President also urged professional bodies and regulatory authorities to take action against members who are found to have acted improperly and unethically.

Strategic response to procurement fraud

Kruger adds that a strategic response to widespread procurement fraud within organisations is to ensure accountability with the right checks in place as well as trustworthy tools to root out problems. The following tips are recommended to form part of an effective strategy:
- Establish, communicate and maintain a fraud policy
- Verify that suppliers, customers and employees are genuine and honest by conducting thorough due diligence and vetting, and, more importantly, put measures in place to monitor suspicious activities
- Be aware not only of mandatory actions and penalties for non-compliance, but also be familiar with the details of the related legislation and how to practically implement and monitor compliance
- Protect whistle-blowers against blame or defamation

For more on LexisNexis Data Services, visit www.lexisnexis.co.za/data-services.

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