PROACTIS Blog

Procurement Fraud Costs Public Sector £2.3 billion

Charlotte Sutton
Charlotte Sutton,
PROACTIS
The UK public sector lost £2.3bn to procurement fraud last year, according to a new report from the National Fraud Authority.
 
 
The Annual Fraud Indicator 2012 showed that procurement fraud in central government contributed the biggest proportion of loss at £1.4bn, followed by local government at £890m.
 
Procurement fraud is any fraud relating to the purchasing of goods and services. The report targeted all the stages of the procure-to-pay cycle and the amount of deliberate deception in order to make a financial gain or cause a loss. Price fixing and bid rigging are two common examples, but false/duplicate/double invoicing and payment fraud were also cited a concern.
 
"More than two-fifths of respondents said that procurement fraud poses a significant risk to the organisation” the report read. "Almost one in ten confirmed that their organisation had suffered at least one procurement fraud in the last year – a further 37% answered ‘Don’t know’ so the total may be higher" it continued.
 
The National Fraud Authority worked with the Chartered Institute of Purchasing and Supply to carry out the research and found that less than one-third of respondents said their organisation had ever undertaken a fraud risk measurement exercise.
 
This report comes at a time when leading Spend Control and eProcurement, PROACTIS promotes more accountability and controls in Public Sector procurement via the use of best practice and the latest cloud-based technology. 
 
 
 
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