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Keywords: Procurement fraud, procurement, fraud, electronic invoicing, e-invoicing, einvoicing, Supply Management
Susie West | News | 7 August 2012
Despite a significant decline in the overall value of procurement fraud, new figures show that there have been a higher number of individual cases over the last year.
According to Supply Management, professional services firm BDO's 2012 Interim FraudTrack report shows that the recorded value of procurement fraud has dropped this year to £3m, down from £25.3m in 2011.
But BDO claims last year's total was skewed by two high profile cases involving the Ministry of Defence in Northern Ireland, so the fall may not be as impressive as it seems. What's more, incidents of procurement fraud are higher this year.
Simon Bevan, Head of Fraud Services at BDO, told Supply Management that he thinks companies are only reporting small, relatively straightforward cases of fraud to the authorities, because they are reluctant to air their dirty linen in public.
If this is indeed the case, then both the volume and value of procurement fraud could be much higher than the BDO report suggests.
"We are aware that procurement fraud remains a problem and is an issue we see a great deal of in our work; it is clearly under-reported in comparison to our own experiences," said Mr Bevan.
"It is a particular risk for organisations with capacity for procuring large volumes of goods and services, especially in retail and construction."
One particular type of procurement fraud that was highlighted in the report is supplier fraud, whereby fraudsters pass on fake contact and bank details to accounts payable departments so that money is paid into a false account.
Mr Bevan pointed put that the majority of procurement fraud is pretty uncomplicated and can be prevented by simple due diligence.
Adopting electronic invoicing and purchase to pay systems can also help to eliminate fraud by increasing transparency across the whole system, from the raising of a purchase order to the settling of an invoice once goods or services have been received.
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