Course Introduction

The purchasing process is one of the riskiest areas when it comes to fraud and abuse. The many opportunities
associated with the process can leave companies vulnerable to both internal as well as external fraud. In fact,
some procurement fraud schemes are the hardest types of fraud to detect (e.g., kickbacks and other off-book
schemes).
The rise in contract management and the outsourcing of goods and services has created an increase in
procurement fraud, which can occur at any stage of the contracting and procurement process. Appropriate
controls, fraud prevention strategies and proper tendering processes are necessary in the fight against this
fraud. During the workshop you be taught the best practices for preventing, detecting and investigating
contract and procurement fraud.
Organizations can be defrauded through collusion among bidders, between employers and contractors, and by
sole procurement employees. Consequently, you need to be aware of the vulnerabilities and risks associated
with fraud schemes that attack the purchasing, procurement and contract functions. Acquire the knowledge,
skills and techniques you need to prevent, detect and deter these devastating frauds
This course will highlight the vulnerabilities and risks associated with fraud schemes that attack the
purchasing, procurement and contract functions and will explore the best practices for preventing, detecting
and investigation contract and procurement fraud.
Overview and Objectives
After successful completion of this learning programme, the learners should be able to:
Explain the principles of procurement audits and investigations
Discuss the professional and legal requirements for procurement auditing
Identify the elements of procurement fraud and misconduct
Discuss the operations of procurement audits and investigations
Describing ways of classifying fraud for improved detection
Discussing responsibilities for fraud detection, investigation and prosecution
Determine if a procurement scheme violates legal statutes or civil laws.
Identify the red flags of bribery and corruption.
Recognize bid-rigging and market-allocation schemes.
Reduce the risk of vendor fraud.
Develop an investigation plan to respond to suspected procurement fraud.
Make a classification of fraud for detection
Describe ethical conduct, fraud prevention and detection
Designing case studies for fraud detection and control
Build a good foundation in knowledge of fraud prevention and detection.
Acquire knowledge; skills and techniques needed to prevent, detect and deter fraud in organization
Who should attend?
Government procurement officers
Internal and external auditors, CPAs and CAs
Professionals and educators seeking knowledge of fraud in the procurement process
Forensic and management accountants, accounts payable and financial analysts
Controllers and corporate managers
Governance, risk management and compliance officers
Attorneys, legal professionals and law enforcement personnel
Detectives and private investigators
Certified Fraud Examiners and other anti-fraud professional

Module 1: Fundamentals of Procurement Fraud

Session 1: Overview of the Purchasing Cycle
Vast and Various Procurement Fraud Schemes
Discuss the responsibilities of a typical
Phantom Vendors
corporate
purchasing
group
and
the
Manipulation of Vendors file and
purchasing business cycle
transactions
Understand who is involved (internal and
Cheque Forgery
external)
Fictitious Invoicing
Identify differences in the purchasing cycle
Bid rigging
depending on the industry and company size
Vendors Kickbacks and bribery
The Procurement and Supply Chain Process
Conflict of Interest
A Review of Procurement Process and Procurement
Fraud
Concealment(
Case
Functions
Studies)
The Key People in Procurement Process
PKFZ
Vulnerabilities and Weakness which allows
Transmile
fraud to take place
Enron
Frank Abigale
Session 2: Introduction to Procurement Fraud
Procurement Red Flags
The True Cost of Fraud
Linking Fraud Concealment to Red Flags
The importance of Managing the Risk of
Most Common Red flags
Procurement Fraud
Red Flags for Specific Procurement Fraud
The Statistics of Procurement Fraud in The Motivations of Fraud
Singapore and the World
Pressures
Purchasing Fraud Schemes
Opportunities
Classifications of purchasing fraud
Rationalisation
Corruption
Asset Misappropriation
On and off-book
Purchasing fraud schemes
Purchasing fraud statistics and industry comparisons

Module 2: Risk-based Strategy to Fight Purchasing Fraud

Session 2: Procurement Risk Management
Good Control Activities you should consider
Fraud Risk Register
Anti-Fraud Policies
Code of Conduct
Training and Awareness
Corporate Culture
Procurement Red Flags Checklist
Purchasing fraud risk assessment
Fraud opportunity reduction through purchasing process improvement
Internal controls to reduce purchasing fraud risk
Proactive risk-based auditing to detect purchasing fraud
Investigations of purchasing frauds identified
Internal Controls over Purchasing
Assess the level of purchasing fraud risk at your organization, including industry and geographic
considerations
Define relevant internal control practices (e.g. explicit policies, segregations of duties, vendor selection,
independent centralized procurement group)
Review policies, processes, and approval limits
Exceptions to normal protocol (e.g. sole sourcing decisions and bid waivers)
Vendor monitoring and evaluation criteria

Purchasing Fraud Detection Processes

Risk-based purchasing fraud detection audits
Tips and complaints
Soliciting feedback from management, employees, the public, and vendors (current, former and
rejected)
Vendor monitoring
Monitoring of major contracts
Detecting Particular Purchasing Fraud Schemes
Scheme-based purchasing fraud symptoms and detection methods
Special considerations for off-book purchasing fraud schemes
Special considerations for contract bidding schemes

Module 3: Corruption Prevention in Procurement and Ethics

Session1:Theories of Corruption Behaviour
Individual explanations: Rational choice and
opportunity;
Psychological theories
Institutional explanations: Social, Cultural
and Organizational explanations
Environmental explanations: Opportunity
theory; Strain theory; Social learning and
neutralization
Session2 : Understanding the Challenges of
Corruption Prevention and Integrity
Assurance
The Science of Corruption Prevention
Corruption Prevention Related Theories and
Definitions
Corruption Types, Roles and Facilitators
Corruption Prevention General Principles
Corruption Prevention Challenges
Session 3: Corruption Prevention Strategies
and programs
The Aims and Focus of Corruption
Prevention
Corruption Prevention Programs
Corruption Prevention Strategies
Anti-corruption agencies
Session 4: Corruption Governance Models
Risk Assessment and Risk Management
Policy Procedure and Control
Training and Education
Compliance
Corruption Investigation

Session 5: Politicisation and Work Place

Culture
Politicisation
Ethical Leadership
Workplace Culture
Session 6: Ethical Models In the Public Sector
The public service ethos and overview of
different ethics models
Impacts of different management approaches
upon public sector ethics from bureaucracy to
risk management
Session 7: Types of Corruption and Misconduct
Defining Corruption and the corruption
continuum
Fraud
Theft and embezzlement

Bribery, kickbacks and receipt of benefits

Unauthorized disclosure of information and

misuse of databases

Conflict of interest and improper association

Nepotism and improper influence

Deception, lying and perjury

Noble cause corruption

High-risk corruption (particular reference to

trafficking and political corruption)
Session 8: The Key Challenge of Corruption
The corruption continuum

Bureaucratic discretion

Harms

Political Costs

Corruption as a social problem

Measuring corruption

Module 4: Mechanisms to curb corruption

Session 1: Overview
Assessing the adequacy of internal controls and
assuring internal audit independence and
effectiveness
Evaluating auditing techniques, procedures,
and requirements Identifying internal audit
tools and practices that can mitigate
corruption-related risks
Disseminating remedies to mitigate internal
control weaknesses

Session 2: Public Sector Mechanism

Government ethics and integrity

Government oversight
Transparency in procurement

Financial regulatory mechanisms

Module 5: Auditing Procurement

Session 1: Internal Audit's Role in Purchasing Session 3: Sales and Collection Cycle
Fraud Investigations
Audit of Sales and Collection Cycle
Purchasing fraud investigation techniques
Audit Sampling for Tests of Transactions
and resources
Accounts Receivable Testing
Enterprise-wide business process and
control remediation
Session 4: Acquisition and Payment Cycle
Interactive case studies
Audit of Acquisition and Payment Cycle
Design Control Activities and Policies
Acquisition and Payment Cycle/Verification of
Bid rigging
Selected Accounts
Phantom Vendors
V. Cash Cycle
Recapitulation
Audit of Cash Balances
Session 2: The Auditing Process
Audit Objectives
Types of Evidence and Documentation
Audit Planning and Analytical Procedures
Materiality and Risk
Internal Control Structure
Overall Audit Plan and Audit Program

Session 5: Completing the Audit and

Miscellaneous
Completing the Audit
Other Engagements, Services and Reports
Operational and Compliance Auditing

Course Take-away
Training Materials( Soft Copies) and notes Hand-outs
8 Gig Flash drive
Tablet /Laptop
Tea Breaks/ refreshments
Course tuition
Personal action planning, Certification and Follow-up support (on request)