Highly competitive environments, global supply chain shortages, economic recessions, financial distress, and geopolitical instability can be major contributors to the rise of procurement and vendor fraud. When companies are dealing with increased pressure to manage supply chain disruptions, lack of inventory, or increased prices for materials and components, they should be ready to manage a number of procurement fraud risks.
Even though the list of procurement fraud schemes is lengthy, we focus on a few examples of the most prevalent: change order abuse, conflicts of interest, bribes and kickbacks, bid rigging, fictitious vendors, sole sourcing, and split purchases.
In this piece, which is part 2 of 2, we offer specific ways to discover and to mitigate against these various schemes.
Based on our practical experience conducting financial investigations, knowledge of compliance processes and procedures, and our expertise on data analytics techniques, we cover the following:
- Actionable, easy-to-follow mitigation tactics to discover and to counter the top types of procurement fraud schemes
- A downloadable checklist that you can use as is, or customize to your specific company and/or industry
- Data analytics techniques to identify red flags associated with procurement fraud schemes
- Tools, such as forensic data analytics procedures, that companies can use to identify the early signs of procurement fraud schemes and ways to combat them
Why It Matters
Whether operating in turbulent economic times or in highly competitive environments – or, for that matter, in easier times – companies should confirm that their corporate compliance procedures are updated. In so doing, they can identify and mitigate the potential risks associated with upticks in fraudulent procurement and vendor activity.
Managing Director, Forensics and Litigation Services
Victor Padilla, CFE, has more than 15 years of experience in anti-corruption efforts, forensic accounting,…
Senior Manager, Forensics and Litigation Services
Sasha Gartman, CFE, CAMS, has more than 15 years of experience in public accounting, compliance and financial services. Before…
Executive Resource Center
Top Procurement Fraud Schemes and Actions Companies Can Take to Identify and Mitigate the Associated Risks, Part 1 of 2
Highly competitive environments, global supply chain shortages, economic recessions, financial distress, and…