Early Warning - All About Procurement Fraud – Part 5

 Early Warning - All About Procurement Fraud – Part 5

By Nikki Viljoen – N Viljoen Consulting (Pty) Ltd 

Last time we looked at some of the different types of issues that need to be looked at around procurement.  

Today we will have a look at some more.

As we said one of the ways to limit procurement fraud is to ensure that you have a proper procurement policy in place and that it is adhered to and checked on a regular basis. We looked at the Needs Analysis, Timing and Suppliers. Then we looked at Supplier Communication and Negotiation. Other issues that need to be taken into account when implementing the procurement process are (but are not limited to):

1. Supplier Liaison

Of course, it is important for the supplier to perform and at this point in the process that is exactly what needs to be done.  It makes sense therefore to have some sort of scorecard in place around the performance of the supplier.  By now there should have been at least one or two deliveries and re-orders and the whole experience needs to be evaluated.  Should the supplier have not met your basic requirements, then it is obviously time for you to consider alternative suppliers or options.

2. Logistics Management

Whilst we all have expectations around our suppliers and their delivery of our goods, it is incumbent upon us to ensure that we manage the whole process. Issues around (but not limited to) shipment, delivery and payment need to be monitored closely and of course, the terms and conditions of the contract must be met at all times.

There may be instances where an “installation” needs to take place and then training needs to be effected.  Clearly, this would also need to be monitored carefully as well.

3. Tender Notifications

Should your company be large enough to require or need tenders to go out to meet your procurement requirements then obviously this would necessitate a whole different workflow.  There are software systems that can be utilized or you can also outsource these requirements.  Obviously, you can also keep this “in-house” but I would suggest that careful consideration be taken into how the whole process should work and of course a lot of research would need to be undertaken in order for this to be as painless as possible.

Be sure to document the process so that there are clear lines of what the requirements are and make sure that each step is monitored carefully.

Next time we will have a look at a few more steps that need to address in your procurement process.

 

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted at 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za 

<<

Part 1

http://www.viljoenconsulting.co.za/2012/12/early-warning-all-about-procurement-fraud-part-1/

Part 2

http://www.viljoenconsulting.co.za/2013/01/early-warning-all-about-procurement-fraud-part-2/

Part 3

http://www.viljoenconsulting.co.za/2013/01/early-warning-all-about-procurement-fraud-part-3/

Part 4

http://www.viljoenconsulting.co.za/2013/01/early-warning-all-about-procurement-fraud-part-4/

>>

Part 6

http://www.viljoenconsulting.co.za/2013/02/early-warning-all-about-procurement-fraud-part-6/