CIVIL WORKS AND SERVICES
Beware of procurement fraud – Analysis
The procurement department in any organisation plays an important role- this is the department that decides where items are sourced from. Procurement is the overall process of acquiring goods, civil works and services.
For decades, it was noted that bribery in this department has often been the highest.
Those who want their companies to be the ones providing various items have often been very friendly with people working in procurement departments.
How bad was this situation? One just needs to look at the number of cases the Fiji Independent Commission against Corruption (FICAC) has brought to court in which staff from procurement departments are implicated.
In fact, 20 per cent of all cases FICAC brings to court deal with abuse of procurement processes.
FICAC maintains that procurement fraud is a common form of corruption in Fiji where the civil servants responsible for public procurements collude with dishonest businesses to defraud public funds.
‘Scams’ unearthed
FICAC has unearthed many of these alleged scams and some of the cases are still pending in court. One worst example is the PWD case where the employees of an entire unit (the Accounts section of PWD Walu Bay) colluded with many businesses to obtain advantages and cause losses to PWD. PWD lost millions of dollars. What was taken to court was just a tip of the iceberg.
FICAC said: “FICAC saw millions of dollars being siphoned off through this scam, but could only take a portion of it to court as the accused persons had destroyed the trail of documentary evidence we needed to prove the case in court.
“But we can confidently say that the amount is very higher than what was mentioned in those charges. Except for the first case, in all subsequent cases, the former PWD employees accused have pleaded guilty and now serving terms. First case went through a full trial and your paper actually covered the sentencing on the first page as well. The rest of the cases against those business owners are still pending.”
And now, the Nasinu Town Council case shows the similar pattern and alleged occurrences. The trend is worrisome as public funds are being wasted.
“Therefore, FICAC, through its
Corruption Prevention Department is now preparing a thorough programme to prevent frauds in public procurement.
“This includes a training programme for civil servants and also those companies doing business with public bodies, followed by a monitoring mechanism to keep the procurement under a ‘close watch’. We hope those will prevent further occurrences at least in large scale manner.”
Look out for these components
To complete the vicious circle of the procurement fraud, as per our experience through cases, there needs to be three components; availability of
funds, loose accounting systems and procurement processes and dishonest people handling public procurement. When all three are present, we have seen large scale procurement scams occurring.
There are two types of dishonest public servants.
Firstly, those who are directly involved in the scam, defrauding the system for their short term financial benefits. Second type is those who turn a blind eye on obvious occurring around them and indirectly approving them. The second type helps the first ones and both are equally liable here.
“For example, in PWD cases, they
were purportedly buying toners for their printers and have spent hundreds of thousands of dollars within a short time period. There were enough red flags here and all what one needed was a simple inquiry to find as to why such a large bulk purchase of one item, without blindly approving the documents that came to the public servant’s table through criminal negligence.
“We have charged both types in court and courts have convicted them accordingly. Amelia Vunisea in a PWD case is an example of the second type,” FICAC said.