Prescription for Managing Procurement Fraud
Procurement fraud is the bedrock of most corruption cases in the public sector. It is a contagious disease that can best be managed through preventive measures as opposed to curative processes.
We are at a stage in the country where both corrupt and non-corrupt citizens are sick of corruption and the disease is spreading fast.
So, what is the best prescription for corruption?
As a country, we have used big terms like ‘war on corruption, combating and fighting corruption which is aimed at treating a disease that has already taken root. There is little use of managing corruption which is a preventive approach to the disease.
A Biblical story from the book of Leviticus 13:1- The Lord spoke to Moses and Aaron, saying, “When a person has on the skin of his body a swelling or an eruption or a spot, and it turns into a case of leprous disease on the skin of his body, then he shall be brought to Aaron the priest or to one of his sons the priests, and the priest shall examine the diseased area on the skin of his body. And if the hair in the diseased area has turned white and the disease appears to be deeper than the skin of his body, it is a case of leprous disease. When the priest has examined him, he shall pronounce him unclean. But if the spot is white in the skin of his body and appears no deeper than the skin, and the hair in it has not turned white, the priest shall shut up the diseased person for seven days. And the priest shall examine him on the seventh day, and if in his eyes the disease is checked and the disease has not spread in the skin, then the priest shall shut him up for another seven days.....
Moses and Aaron got a way of managing a contagious disease and prevented spread. We can borrow a few lessons to manage corruption especially if our focus is long term solution.
Education and Training
It was responsibility of Moses and Aron to educate the population to avoid spread of leprous disease. In procurement fraud, the first tool and probably the best is education.
According to a survey by Transparency International the least corrupt state in India is Kerala, which also has the highest literacy rate is highest in India. It is due to unawareness in the field of law, public rights and procedures thereof that population and an uneducated suffer out of the corrupt society. Educated people know and understand their rights well.
Build capacity for those who need it most. Countries that suffer from chronic fragility, conflict and violence– are often the ones that have the fewest internal resources to combat corruption. Identify ways to leverage international resources to support and sustain good governance.
Learn by doing. Any good strategy must be continually monitored and evaluated to make sure it can be easily adapted as situations on the ground change.
This is crystal clear from biblical story above and can be applied in a number of ways;
Step aside as officer if you are accused and work hard to clear your name. If people were vacating offices, the pressure on Judiciary to act fast would shift to the accused because they want to clear their names and need their jobs back.
Blacklist suppliers and organizations accused of corruption. No government of affiliated body in Kenya has found nerve to compile and publish a list of companies accused of engaging in corrupt practices. USA has SAM.GOV which provides a very good tool for reference when contracting suppliers.
Eligibility to hold office. One should hold office if he/she does not have any criminal record.
Main cause of corruption is lack of values like honesty, integrity, selflessness. We should be honest to ourselves before pointing accusing fingers. Until and unless we will not be honest, we can’t control corruption.
Understand corruption: Corruption is not only about bribes. People especially the poor get hurt when resources are wasted. That’s why it is so important to understand the different kinds of corruption to develop smart responses.
Do not support corruption: Is your conscious clear when you accept huge donations in your churches and fund raisers?
Lead by example: when you are asked for bribe, refuse. Don’t use your status to circumvent processes or resist arrest, queue, stay in traffic with the rest of citizens.
Power of the people
Create pathways that give citizens relevant tools to engage and participate in their governments – identify priorities, problems and find solutions.
Bring together formal and informal processes (this means working with the government as well as non-governmental groups) to change behaviour and monitor progress; cut the red tape.
Act globally and locally. Keep citizens engaged on corruption at local, national, international and global levels – in line with the scale and scope of corruption. Make use of the architecture that has been developed and the platforms that exist for engagement
Harness the power of technology to build dynamic and continuous exchanges between key stakeholders: government, citizens, business, civil society groups, media, academia etc.
Use CCTV in the government offices and exposing those videos in the media.
Adopt eProcurement and eGovernment systems and sensitize to minimize resistance from users.
Culture and Mind set
Establishing the right culture is the number one weapon against corruption. This includes fostering a work environment where transparency and integrity are at the core of business-as-usual. Staff training should be in depth and ongoing, with refreshers provided at regular intervals. Organisations need to audit and assess current internal controls, taking nothing for granted when designing mechanisms for combatting fraud.
Deliver the goods
Invest in institutions and policy – sustainable improvement in how a government delivers services is only possible if the people in these institutions endorse sensible rules and practices that allow for change while making the best use of tested traditions and legacies.
Anti-corruption controls already in place must be monitored for strength and efficacy at regular intervals. When red flags go up, a fraud response plan should be accessible, relevant and understood by the entire procurement division. Further, a thorough knowledge of current and potential suppliers should be developed and maintained, including detailed information on supplier capacity and sub-contracting.
Perhaps most importantly yet often overlooked the procurement process itself must be monitored each step of the way, both for individual contracts and in terms of ongoing operations within the procurement division. A further enhancement possibility exists within business analysis programs; harnessing the power of data can provide an incredible means of monitoring procurement processes, picking up any suspicious activities through detailed analytics.
If possible, segment the procurement process so no individual is responsible for an entire transaction and ensure proper record keeping.
The priests in biblical story would lock up people for 7 days and monitor the healing. Aggressively lock up corrupt people in jail.
Punishing corruption is a vital component of any effective anti-corruption effort. Do Friday arrests if that sends the right message. However, more energy should be devoted to preventive measures which will yield long term results.
Fight Corruption with e-Procurement
Prescription for Managing Procurement Fraud
Red Flags of Procurement Fraud
Need for Speed
Inside the Evaluation Room
Sustainable Supplier Relationship Management
Blow Your Own Trumpet
Justification for Outsourcing Prequalification
Procurement Values in a Tough Economy
How to Overcome Fear of Discretion