Companies are more likely to be hit by procurement fraud than by any headline-grabbing derivatives or computer scandal, a senior manager from Arthur Andersen has warned. "While the average company waits for an assault by Mr Big, it is more likely to suffer death by a thousand cuts," says Andrew Durant, a senior manager in the firm's fraud services unit.
His warning comes on the eve of a trial, set to commence in mid-September at Isleworth Crown Court, of a former employee of Vauxhall Motors in connection with contracts awarded to two cleaning companies. Kevin Arthur Presland, who was a cleaning liaison engineer at Vauxhall’s Luton plant, is accused of having “corruptly accepted” cash, decorating services for his daughter and a holiday in Rome in exchange for granting cleaning contracts to Wesleyshire Industrial Services Limited. Two former directors of another cleaning company also face trial. Durant argues that services are a popular target for procurement fraudsters: “It can be difficult to show what was actually provided or to prove its true worth.” He also advises companies to segregate responsibility for negotiating contracts, receiving goods and authorising payment. Warning signs of procurement fraud include the absence of a tendering process, unreasonably low or unrealistically high tender prices, and indications that a contract is disproportionate to the size of the contractor. Durant adds that companies may be open to fraud by failing to check the credentials of hired staff. Selfridges, the Oxford Street department store, reported days before its stockmarket flotation in July that it had been the victim of a “very minor” purchasing fraud in which employees gave favours to suppliers.
Leave a Reply
You must be logged in to post a comment.