Procurement Fraud Schemes Analysis

Undeniably the universal and significant fraud and abuse risks within procurements comes from the forty-four traditional schemes; the five personality risk profiles of those who commit the schemes; and the non-compliance to internal procurement policies, procedures, processes and practices, which are designed to prevent and detect fraud. These personality risk profile employees create an enormous vulnerability exposing entities to countless opportunities for fraudulent activity, unnecessary contract termination, and potential litigation.

Utilizing our Procurement Fraud Schemes Analysis methodology, we identify our client’s unique degree of risks to:

  1. ​​The traditional forty-four (44) misconduct schemes of fraud and/or abuse found in today’s procurement and purchasing methods;  
  2. Pinpoint which of the 44 schemes are most likely to occur within the client’s processes; and
  3. Determine the potential impacts if the schemes are not prevented, detected and/or corrected.​​

Our assessment methodology is adaptable and can be structured to evaluate a single contract, individual department’s procurement/purchasing, or an entire organization. With the knowledge of their high risk areas, our clients are better positioned to design sound integrity controls (internal policy, procedures, and/or processes designed to prevent and detect fraud and abuse) consistent with their overall business environment.  

Why Procurement Fraud Schemes Analysis
Versus Various Approaches to Identifying Risk?

Because there can be various approaches to identifying organizational risks, it is important to understand some of the key differences.  An enterprise-wide risk assessment is focused on identifying risks associated with achieving entity wide goals, maximizing performance, and identifying future risks, which include reductions in budgets or personnel.  Most of these assessments are performed to protect the entity's networks, investments, proprietary information, employees, and assets to name just a few.  Some entities may perform enterprise-wide "Fraud" risk assessments targeting Financial Statement Fraud, Asset Misappropriation, or Corruption. The challenge with this type of fraud risk assessment is they are broad in scope and are not designed sufficiently to reveal the fraud and abuse vulnerabilities within procurements.  

​Without a specific analysis of the 44-schemes; the people that perform them; how they are deployed in the entities' procurement processes; the effectiveness of the mitigation controls, and the commitment to procurement integrity; you will not fully appreciate the entity’s unique degree of vulnerability and therefore will not be able to comprehensively safeguard against two of your largest impact risks:  Financial and Reputation.