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Public sector bodies view procurement fraud as a significant risk

Wed 04 Apr 2012

Procurement fraud is proving to be a big problem to many organisations in the public sector, a new study has revealed.

According to research by the National Fraud Authority (NFA), 40.8 per cent of those polled rate fraudulent purchasing practices as a "significant risk".

Figures also showed that 9.3 per cent of public sector bodies have fallen victim to procurement fraud over the last 12 months.

However, the NFA believes the actual amount could be much higher, since 37 per cent of respondents were unsure as to whether it has taken place at their organisation.

With figures showing that procurement fraud cost the public sector more than £2 billion last year, the government is keen to clamp down on the problem.

James Brokenshire, the crime and security minister, has insisted that "ripping off the taxpayer will simply not be tolerated", adding that the government's fraud prevention strategy is already yielding positive results.

Richard Tinham, partner and procurement specialist at law firm Winckworth Sherwood, said: "The impact of procurement fraud is significant and emphasises the need for public sector organisations to put in place robust contracts, employment policies and audit processes.

"It is important that contracting authorities have the ability to minimise the possibility of fraud occurring, establish if a fraud is being perpetrated and deal swiftly and robustly with anyone found to be engaging in such activity."

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