The role of e-purchasing in government procurement fraud reduction through expanding market access

This study aims to analyze the effect of e-purchasing implementation on the reduction of fraud in government procurements in Indonesia. This study also analyzes the role of market access in mediating the effect of e-purchasing implementation on government procurement fraud. The study was conducted in all Procurement Service Units (ULP) of cities and districts in Indonesia. The questionnaires were sent electronically to 520 ULPs, but only 120 respondents could be used in this study. In analyzing data, the Structural Equation Modelling (SEM) was used with the support of the program Partial Least Square (WarpPLS 7.0) to examine the relationship between variables studied. The results show that the implementation of e-purchasing directly reduces the level of fraud in government procurements in Indonesia. Other findings of the study also indicate that the implementation of e-purchasing expands market access. The rise of market access in implementing e-purchasing will affect the level of frauds relating to procurement practices in the Indonesian government.

Analyzing procurement fraud in the US Navy

Purpose The purpose of this paper is to analyze an ongoing fraud case in the US Navy involving the procurement of ship-husbanding services. The fraud acts will be analyzed from three perspectives–contract life cycle, internal controls and fraud schemes. Design/methodology/approach A data search was conducted to collect publicly available documents issued by the US Department of Justice (DOJ). A content analysis was used to analyze the fraud acts by aligning them with the contracting phase, internal control component and fraud scheme category. Findings The majority of the fraud occurred in the contracting phases of contract administration, followed by procurement planning and then source selection. The majority of the fraud occurred because of internal control component weaknesses in the control environment followed by information and communications. The majority of the fraud was aligned with the fraud scheme of collusion, followed by billing, cost and pricing. Research limitations/implications Because this is an ongoing investigation, additional DOJ information will become available and provide additional insight on the contracting phase, internal control component and fraud scheme. Practical implications The analysis suggests that the Navy’s lack of trained personnel, capable processes and effective internal controls result in the increased vulnerability to procurement fraud in its husbanding support services program. Originality/value To the best of the authors’ knowledge, this study is the first to analyze fraud through the lens of auditability theory, specifically by the contracting phase and internal control component. Public agencies can enhance fraud detection and deterrence efforts by understanding how weaknesses in contracting processes and internal controls may increase an organization’s vulnerabilities for fraudulent activities.

The Global Fund: why anti-corruption, transparency and accountability matter

Background The creation of the Global Fund to Fight AIDS, Tuberculosis and Malaria, also known as the Global Fund, was prompted by the lack of a timely and effective global response, and the need for financing to fight against three devastating diseases: HIV/AIDS, tuberculosis, and malaria. During the formation of the Global Fund, necessary anti-corruption, transparency, and accountability (ACTA) structures were not put in place to prevent fraud and corruption in its grants, which resulted in the misuse of funds by grant recipients and an eventual loss of donor confidence in 2011. The Global Fund has instituted various ACTA mechanisms to address this misuse of funding and the subsequent loss of donor confidence, and this paper seeks to understand these implementations and their impacts over the past decade, in an effort to probe ACTA more deeply. Results By restructuring the governing committees in 2011, and the Audit and Finance; Ethics and Governance; and Strategy Committees in 2016, the Global Fund has delineated committee mandates and strengthened the Board’s oversight of operations. Additionally, the Global Fund has adopted a rigorous risk management framework which it has worked into all aspects of its functioning. An Ethics and Integrity Framework was adopted in 2014 and an Ethics Office was established in 2016, resulting in increased conflict of interest disclosures and greater considerations of ethics within the organization. The Global Fund’s Office of the Inspector General (OIG) has effectively performed internal and external audits and investigations on fraud and corruption, highlighted potential risks for mitigation, and has implemented ACTA initiatives, such as the I Speak Out Now! campaign to encourage whistleblowing and educate on fraud and corruption. Conclusions From 2011 onwards, the Global Fund has developed a number of ACTA mechanisms which, in particular, resulted in reduced grant-related risks and procurement fraud as demonstrated by the decreased classification from high to moderate in 2017, and the reduction of investigations in 2018 respectively. However, it is crucial that the Global Fund continues to evaluate the effectiveness of these mechanisms; monitor for potential perverse impacts; and make necessary changes, when and where they are needed.

Confronting the Monolith: Insider Accounts of the Nature and Techniques of Corruption in Nigeria

This paper draws upon insider accounts of the nature and techniques of corruption in Nigeria. It draws upon unique access to interview 20 senior officials employed in key public agencies in the fight against corruption in Nigeria and access to 20 case files of prosecutions by the Independent Corrupt Practices and other related offences Commission (ICPC). The paper illustrates their perception of the monolith of corruption faced and shows some of the most common types of corruption confronted such as embezzlement, theft and fraud; procurement fraud; favoritism, nepotism and related acts; extortion and bribery. The paper also illustrates the connection between the private and public sector in corruption and some of the differences that emerge in grand and petty corruption.

The Global Fund: Anti-Corruption, Transparency and Accountability

Background: The Global Fund to Fight AIDS, Malaria and Tuberculosis has been a key international organization in improving the health of those affected by the three big diseases. It was created during a time of health crisis and did not have the necessary anti-corruption, transparency, and accountability (ACTA) structures in place to prevent fraud and corruption in its grants, which resulted in misuse of funds by grant recipients and loss of donor confidence in 2011. Almost one decade later, this paper seeks to describe the ACTA mechanisms within the Global Fund and their results. Results: At the highest level, the Board of Directors has restructured the Global Fund’s governing committees in 2011 and in 2016 to its current Audit and Finance, Ethics and Governance, and Strategy Committees. This has helped to delineate committee mandates and to strengthen the Board’s oversight and direction on operations. In addition, the Global Fund has adopted a rigorous risk management framework and has worked risk mitigation into all aspects of functioning. An Ethics and Integrity Framework was adopted in 2014 and an Ethics Office was established in 2016, resulting in increased conflict of interest disclosures and greater ethics considerations within the Global Fund. The Office of the Inspector General of the Global Fund has been effective in performing internal and external audits and investigations on fraud and corruption, suggesting changes to mitigate future risks, and implementing novel initiatives, such as the I Speak Out Now! campaign to encourage whistleblowing and to educate on signs of fraud and corruption. Finally, the “eyes and ears” of the Global Fund, the Local Fund Agents, have been involved in exposing fraud and corruption during the implementation of Global Fund grants. These mechanisms have reduced grant-related risks and procurement fraud in particular. Conclusions: Over the past decade, the Global Fund has developed a number of ACTA mechanisms. It will be critical that the Global Fund continues to monitor and evaluate how effective these mechanisms are and to make changes, when and where needed.

Pengaruh Karakteristik Organisasi, Kesesuaian Kompensasi, Sistem Pengendalian Internal dan Budaya Etis terhadap Fraud Pengadaan Barang/Jasa

The purpose of this study is to examine whether the TPK characteristic variables, the suitability of compensation, internal control systems, and ethical culture have an influence on fraud procurement of goods / services. The study was conducted at the Village Government Agency in Central Lombok Regency. This research uses a quantitative approach using primary data collected by survey method through sending questionnaires to respondents. The sampling technique used was Claster Random Sampling, so that 195 people were obtained in 65 villages in Central Lombok Regency. The results showed that the characteristics of the Activity Management Team (TPK) and ethical culture had a significant negative effect on goods / services procurement fraud, compensation suitability had a significant positive effect on goods / services procurement fraud, while the internal control system had no effect on goods / services procurement fraud. Keywords: Organizational Characteristics; Suitability of compensation Internal Control System; Ethical Culture; Goods / Services Procurement Fraud.