Forensic Techniques To Detecting Procurement Fraud

The starting point for such an investigation is gathering all the payments to suppliers preferably over a number of years.  We then sort this information to enable us to review trends in the payment history.  Once this data is gathered, sorted and reviewed we carry out the following procedures.

1. Background checks on the suppliers

  • Internet presence – is their website professionally designed and does it advertise the goods and services that were supplied
  • Is the supplier reputable and who are the suppliers’ other clients
  • Is the supplier company a long-standing registered company or recently incorporated
  • Who are the Directors/shareholders of the supplier and is there any links to key staff in the business we are examining
  • What is the address used by the supplier and carry out checks on the address for multiple users

2. Connections to clients’ staff

  • Access employee files to gather names and addresses
  • Access clients’ suppliers data – names of known directors (past and present), owners and employees
  • Compare the two datasets for connections

3. Compare clients’ annual purchases to the suppliers’ revenue over a number of years

  • It may indicate that the service could be taken in-house by employing similar staff levels and resulting in a cost-saving

4. Compare the suppliers’ invoice numbering

  • Almost sequential numbering indicates the supplier has no or few other customers.

5. Review the process

  • Review the process in place for vetting new suppliers and in particular checks for any conflicts of interest.

What questions do you have?

We are happy to help. Please post your comment below or call Paul Leonard, Partner at Cooney Carey, on 01 677 9000. Alternatively, send him an email: pleonard@cooneycarey.ie

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