SA procurement fraud double global average - survey



Fraud.jpgA total of 59 per cent of South African respondents to the PricewaterhouseCoopers (PwC) Global Economic Crime Survey indicated that they had experienced procurement fraud, compared with the global figure of 29 per cent.

PwC director Louis Strydom described as "mind-boggling" the loss South Africa suffered owing to economic crime.

Of the 134 surveyed South African respondents, four reported losing more than R1-billion each through fraud, said Strydom.

In terms of financial losses below R1-million, South Africa ranks lower than global averages, but for losses between R10-million and R1-billion and above, South Africa ranks the highest, said Strydom.

Globally, governments accounted for 46 per cent of procurement fraud, followed by energy, utilities and mining (43 per cent) and engineering and construction (42 per cent).


SArespondentCrimes.jpgIn South Africa, vendor selection was the most targeted, said Strydom.

"Just look at how many projects meant to assist the poor fail because of the misappropriation of funds."

"Procurement fraud cannot happen if there are no internal players. To deal with economic crimes there must be a focus on management. If management doesn't advocate against such practices, we cannot beat it."

Fraud-risk management was the most effective means of detection, said Strydom, and South African companies were ahead of their global counterparts in this area.

"Worrying, though, is that 20 per cent of companies do not undertake risk assessments, with 18 per cent of culprits only receiving warnings, while 9 per cent of companies do nothing against perpetrators.

"It is encouraging that more South African companies (82 per cent) than their global counterparts (49 per cent) turn to law-enforcement agents to deal with (internal) culprits."

Externally, 63 per cent of culprits in South Africa were turned over to the police, versus 61 per cent globally.

Meanwhile, as much as 77 per cent of South African respondents reported experiencing asset misappropriation (69 per cent globally), and 52 per cent bribery and corruption (27 per cent globally).

Africa and Eastern Europe reported the highest prevalence of bribery and corruption (39 per cent), followed by the Middle East (35 per cent), Asia Pacific (30 per cent), Latin America (25 per cent), North America (14 per cent) and Western Europe (12 per cent), Strydom said.

Institute of Accountability director Paul Hoffman estimates that corruption has cost South Africa R700-billion over the last 20 years. Through government's tendering system, R30-billion is stolen annually through corruption.

Corruption would continue until the government developed the political will to appoint an effective, independent anti-corruption entity, said Hoffman.

"Currently we pursue a multi-agency approach. The problem with this in relation to corruption is that too much falls through the cracks, with no specific agency having the necessary clout to take on corruption in high places.

"The Hawks are not as effective as the Scorpions; they don't have the clout," said Hoffman.

Leave a comment

SmartProcurement Newsletter

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
* Country:
* Public / Private:


Career opportunites

Demand Planning Manager

  • <500 000 Gauteng Operations, Planning & Inventory Projects / Category Management
(Total Cost to Company R750k - R900K) excluding ...More

Global Category Manager: CONTRACTS

  • <500 000 Buyer Commodities Contract Gauteng
Total Cost to Company R1mil - R1.2mil excluding

Project Manager :12-18 MONTH CONTRACT

  • <500 000 Contract Procurement Officer / Specialist Projects / Category Management
Description:A well-known retail organization is looking for an ...More

Procurement Analyst

  • <500 000 Analyst Gauteng Permanent Procurement Management
Description:A leading infrastructure development group with strong presence ...More

Commodity Manager: Fuels and Lubes

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
Description:Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R800K - R900K) Description: ...More

Supply Chain Analyst

  • <500 000 Analyst Permanent Supply Chain Western Cape
(Total Cost to Company R350K - R550K) SOUTHERN ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
(Total Cost to Company R450k - R550k, dependent ...More

Procurement Specialis

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
(Total Cost to Company R700k - R800k including ...More

Solutions Architect

  • <500 000 Analyst Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R1.3Mil - R1.1Mil including ...More

Engineering Manager

  • Gauteng Industrial Engineer Permanent Procurement Management
Total Cost to Company R850k - R950K including ...More

Country Head of Procurement

  • Permanent Procurement Management Procurement Officer / Specialist CBS Procurement,Hub Head of Procurement To lead, ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management!Gauteng/Planning/Demand%20Planner/TP2005490/MSe Category: PlanningPosition Title: Demand PlannerSalary: R600 000 ...More

Head of Procurement

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist!Gauteng/Procurement/Head%20of%20Procurement/TP2005488/ZBuCategory: ProcurementPosition Title: Head of ProcurementSalary: R1.3 million ...More

Warehouse and Distribution Manager

  • <500 000 Gauteng Logistics & Warehousing Permanent Supply Chain!Gauteng/Logistics/Warehouse%20Distribution%20Manager/TP2005455/TMa Category: Supply ChainPosition Title: Warehouse and Distribution ...More

Supply Chain Manager

  • <500 000 Mpumalanga Permanent Procurement Officer / Specialist Supply Chain!Mpumalanga/Supply%20Chain/Supply%20Chain%20Manager/TP2005448/LMa Category: Supply ChainPosition Title: Supply Chain Manager ...More

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Operations, Planning & Inventory Permanent!Gauteng/Consulting/Continuous%20Improvement%20Manager/TP2005489/SNh Category: ConsultingPosition Title: Industrial EngineerSalary: R900 000 ...More

Operations Manager

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
Our client within the FMCG industry with a ...More

Warehouse and Distribution Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
An exciting opportunity awaits for a Warehouse and ...More

Demand Planner

  • <500 000 Permanent
Get an opportunity to be part of one ...More