Leading global excellence in procurement and supply

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Paul Guile FCIPS,MACIPS Global Procurement Fraud Advisor

“Is procurement fraud a risk within the Health Sector?”

Leading global excellence in procurement and supply

Introduction• Procurement is one of the highest risk activities. No

one company can operate without some form of procurement

• Procurement fraud usually requires some form of inside collaboration, therefore the fraudsters will know and understand how your business works

• This exposes your company to other types of fraud• Procurement fraud can have a long term loss

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Leading global excellence in procurement and supply

Have you installed your procurement fraud strategy?

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Leading global excellence in procurement and supply

CIPS Global Procurement Fraud initiatives• Initiated British Standard BS10501 • Delivered an e learning procurement fraud course to the Government

Procurement Service, UK Cabinet Office• Just launched the first global on line procurement fraud training

course• NHS UK and Scotland are currently reviewing this for national roll out• Working with NHS Protect to have joint badged NHS/CIPS national

procurement fraud guidance• Global SLA with top tier global oil and gas organisation• Nov 2013 Procurement fraud tour of Australia• 2014 Global masterclass tour covering Saud Arabia, Singapore, South

Africa, Hong Kong, Uganda, Kenya, Brazil and Dubai• Working with Teesside University's Centre for Fraud and Financial

Crime to develop the first PGC in procurement fraud

Leading global excellence in procurement and supply

Transparency International: No. 17

Leading global excellence in procurement and supply

Indicator- June 2013

Leading global excellence in procurement and supply

Why does it occur? Global Themes

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Leading global excellence in procurement and supply

Why does Procurement Fraud occur• Systems override or a controls failure• Procurement fraud is often not recognized as a board risk• No Procurement fraud strategy is in place• No training regime. What do staff watch out for?• Traditional fraud controls do not cover procurement fraud• Segregation of duties: Procure to pay controls, 3 way match.

What about the contract?• Delegated Procurement Authority overridden• Procurement process bypassed• Orders sole sourced • Orders split to avoid tender process• Lack of Unauthorised master data file access

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Leading global excellence in procurement and supply

Procurement Fraud Typologies

Leading global excellence in procurement and supply

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Case study “ How it can go wrong”

Leading global excellence in procurement and supply

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Thank you, any questions?