Public protector identifies three most common forms of fraud

CAPE TOWN — Three particular forms of fraud and corruption were costing the country billions every day, but they could be prevented if officials exercised due diligence, Public Protector Thuli Madonsela said yesterday.

Addressing the Association of Certified Fraud Examiners conference, Ms Madonsela called on organisations and organs of state to use investigation findings and compliance enforcement to make their organisations corruptionand fraud-proof.

She said overcharging, false billing and misrepresentation of qualifications were some of the key practices “we regularly come across when we investigate tenders and other state contracts or transactions”. She said billions of rand were lost through these three practices.

“The first two incur direct loss to the state and ultimately taxpayers, while the issue of misrepresentation of qualifications increases risks of nondelivery or inadequate delivery.

“In all cases, fraud is involved and in some cases the fraud is coupled with … corruption involving the collusion of internal actors within organs of state.

“Overcharging and false billing are preventable through due diligence, yet the state loses billions every day due to these maladies,” Ms Madonsela said.

Bongi Mlangeni, the acting deputy director at Corruption Watch, could not comment on Ms Madonsela’s findings but said Corruption Watch had encountered similar trends when responding to reports of fraud and corruption.

Ms Madonsela said lessons drawn from investigations could highlight system deficiencies that enable fraud and corruption.

“Good investigations contribute to the prevention of cor- ruption and fraud, whereas bad investigations contribute to an enabling environment where corruption and fraud thrive,” Ms Madonsela said.

She said not dealing properly with cases — especially closing incomplete investigations to allow a suspected wrongdoer to resign — deprived organisations of an opportunity to understand what had really happened and to take steps to prevent a recurrence.

Incomplete investigations also encouraged a sense of impunity while depriving wrongdoers of an opportunity to learn from their mistakes, often leading to repeat offending. She decried the “recycling” of people who had evaded accountability back into the government system.

She said there were numerous Treasury guides that, if complied with, could prevent such loss. Valuable lessons could be learnt from reports of investigations.