Procurement fraud costs UK AUD$2.4 billion

Procurement fraud in Britain’s central government is costing the country AUD$2.4 million a year, according to a new report.

The National Fraud Authority (NFA) has also revealed that the procurement fraud in UK local government reached $1.4 million.

Another report has also named procurement as the top type of private and public sector fraud, ahead of accounts receivable fraud and treasury fraud.

"Whether it is the public, private and charity sectors or as individual citizens, it is vital we join together to take action to stem the rising tide of fraud,” Bernard Herdan, chief executive of the NFA, said.

“It affects every government department and impacts on the government’s ability to deliver better public services, while stripping the civil service of vital resources,” UK Cabinet Office minister, Francis Maude said.

Bribery appears to be at the forefront of this fraud with widespread marketing by law firms on the Bribery and Corruption Act (UK) as well as heavy press coverage that has directed attention away from fraud as a priority.

“Although risk and compliance departments should address both old and new risks, they face limited resources and giving equal attention to matters is problematic often with new risks taking a lead,” Simon Bevan, head of fraud at BDO, said.

Overall, fraud is costing the UK more than $61 billion a year, according to the Annual Fraud indicator from the NFA, which is an executive agency of the Attorney General’s Office.

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