Procurement Fraud

Purpose The purpose of this paper is to research how local councils in England responded to a national initiative intended to address the risk of the involvement of organised crime in local government procurement fraud. In so doing, it considers definitional issues before undertaking original research to explore how councils responded and, through in-depth interviews with three councils, what initial explanations may explain the responses. It concludes that the national initiative was insufficiently thought-through, and that councils’ responses were significantly influenced by the relevance of the threat of organised crime, financial constraints and competing priorities. Design/methodology/approach The case study involves a literature review, an analysis of official documentation, a questionnaire to local councils in the north of England and semi-structured interviews with anti-fraud practitioners in three councils in the northeast of England. The approach is to provide an analysis of the implementation of a national initiative to promote a local government response to procurement fraud by organised crime. Findings On the basis of original research, the paper proposes that the national initiative was insufficiently thought-through, and that councils’ responses were influenced by the relevance of the threat of organised crime, financial constraints and competing priorities. Research limitations/implications The research looks at a national initiative and how local councils responded within the context of financial and other constraints. The research is limited in terms of the range of responses it sought, and that it only studied the experience of three local councils in detail. On the other hand, its findings support further research into the implementation of national initiatives in terms of practice on the ground. Practical implications The findings identify issues surrounding the design and implementation of national anti-fraud policies from the perspective of local government and will be of value to practitioners and academics interested in fraud, policing, organised crime, local government and policy making. Originality/value The paper is the first study in the UK on the local implementation of national strategies on procurement fraud and organised crime and raises positive and less-positive aspects of how far national strategies and intentions are addressed on the ground, with a focus on what factors may influence local implementation.

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Defense Procurement Fraud, Penalties, and Contractor Influence

Journal of Political Economy ◽

10.1086/250080 ◽

1999 ◽

Vol 107 (4) ◽

pp. 809-842 ◽

Cited By ~ 80

Author(s):

Jonathan M. Karpoff ◽

D. Scott Lee ◽

Valaria P. Vendrzyk

Keyword(s):

Defense Procurement ◽

Procurement Fraud

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Fraud triangle in public procurement: evidence from Indonesia

Journal of Financial Crime ◽

10.1108/jfc-11-2018-0121 ◽

2019 ◽

Vol 26 (4) ◽

pp. 951-968 ◽

Cited By ~ 2

Author(s):

Ni Wayan Rustiarini ◽

Sutrisno Sutrisno ◽

Nurkholis Nurkholis ◽

Wuryan Andayani

Keyword(s):

Negative Affect ◽

Conflicts Of Interest ◽

Detection System ◽

Public Procurement ◽

Fraud Triangle ◽

Effective Prevention ◽

Content Type ◽

The Government ◽

The Relationship ◽

Procurement Fraud

Purpose This study aims to examine the effects of fraud triangle (pressure, opportunity and rationalization) on individual fraudulent behavior in Indonesian public procurement. Empirical research in this area is relatively sparse. Design/methodology/approach Data were collected using laboratory experiments. Findings The results revealed that fraudulent behavior is higher when an individual has high pressure and high opportunity. These factors play an important role in determining individual rationalization. Most of participants used “displacing responsibility” to rationalize their actions. This study also demonstrated that negative affect mediates the relationship between fraudulent behavior and rationalization. Research limitations/implications First, fraudulent behavior research cannot be separated from social desirability bias. Second, the experiments only involved individual decision-making, not in groups. Finally, this study did not examine the effectiveness of rationalization in reducing negative affect. Practical implications Over the years, the government has only focused on the identification of pressure and reduction of opportunities, but ignored individual psychological reasons. Considering that procurement fraud is always increasing, the government must more focus on individual reasons to design an effective prevention and detection system. Social implications There are various conflicts of interest in public procurement budgeting. These conflicts can distort resource allocation and causes budget leakage. As a result, the government is incapacitated to achieve social and economic goals of the community. Originality/value There is limited research about fraud in public procurement budgeting, especially in developing countries. In addition, the fraud triangle research, which focuses on rationalization is still limited.

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