Paul Guile FCIPS,MA
CIPS Global Procurement Fraud Advisor
“Is procurement fraud a risk within the
Health Sector?”
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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
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Why does Procurement Fraud occur
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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
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Procurement Fraud Typologies
Leading global excellence in procurement and supply
Case study “ How it can go wrong”
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Leading global excellence in procurement and supply
Thank you, any questions?
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Leading global excellence in procurement and supply