Course Introduction The purchasing process is one of the riskiest areas when it comes to fraud and abuse. The many opportunities associated with the process can leave companies vulnerable to both internal as well as external fraud. In fact, some procurement fraud schemes are the hardest types of fraud to detect (e.g., kickbacks and other off-book schemes). The rise in contract management and the outsourcing of goods and services has created an increase in procurement fraud, which can occur at any stage of the contracting and procurement process. Appropriate controls, fraud prevention strategies and proper tendering processes are necessary in the fight against this fraud. During the workshop you be taught the best practices for preventing, detecting and investigating contract and procurement fraud. Organizations can be defrauded through collusion among bidders, between employers and contractors, and by sole procurement employees. Consequently, you need to be aware of the vulnerabilities and risks associated with fraud schemes that attack the purchasing, procurement and contract functions. Acquire the knowledge, skills and techniques you need to prevent, detect and deter these devastating frauds

This course will highlight the vulnerabilities and risks associated with fraud schemes that attack the purchasing, procurement and contract functions and will explore the best practices for preventing, detecting and investigation contract and procurement fraud. Overview and Objectives After successful completion of this learning programme, the learners should be able to: Explain the principles of procurement audits and investigations

Discuss the professional and legal requirements for procurement auditing

Identify the elements of procurement fraud and misconduct

Discuss the operations of procurement audits and investigations

Describing ways of classifying fraud for improved detection

Discussing responsibilities for fraud detection, investigation and prosecution

Determine if a procurement scheme violates legal statutes or civil laws.

Identify the red flags of bribery and corruption.

Recognize bid-rigging and market-allocation schemes.

Reduce the risk of vendor fraud.

Develop an investigation plan to respond to suspected procurement fraud.

Make a classification of fraud for detection

Describe ethical conduct, fraud prevention and detection

Designing case studies for fraud detection and control

Build a good foundation in knowledge of fraud prevention and detection.

Acquire knowledge; skills and techniques needed to prevent, detect and deter fraud in organization

Who should attend? Government procurement officers Internal and external auditors, CPAs and CAs Professionals and educators seeking knowledge of fraud in the procurement process Forensic and management accountants, accounts payable and financial analysts Controllers and corporate managers Governance, risk management and compliance officers Attorneys, legal professionals and law enforcement personnel Detectives and private investigators Certified Fraud Examiners and other anti-fraud professional

Module 1: Fundamentals of Procurement Fraud

Session 1: Overview of the Purchasing Cycle Discuss the responsibilities of a typical

corporate purchasing group and the purchasing business cycle

Understand who is involved (internal and external)

Identify differences in the purchasing cycle depending on the industry and company size

The Procurement and Supply Chain Process A Review of Procurement Process and

Functions The Key People in Procurement Process Vulnerabilities and Weakness which allows

fraud to take place Session 2: Introduction to Procurement Fraud

The True Cost of Fraud The importance of Managing the Risk of

Procurement Fraud The Statistics of Procurement Fraud in

Singapore and the World Purchasing Fraud Schemes

Classifications of purchasing fraud ÷ Corruption ÷ Asset Misappropriation ÷ On and off-book

Purchasing fraud schemes Purchasing fraud statistics and industry comparisons

Vast and Various Procurement Fraud Schemes ÷ Phantom Vendors ÷ Manipulation of Vendor’s file and

transactions ÷ Cheque Forgery ÷ Fictitious Invoicing ÷ Bid rigging ÷ Vendor’s Kickbacks and bribery ÷ Conflict of Interest

Procurement Fraud Concealment( Case Studies)

÷ PKFZ ÷ Transmile ÷ Enron ÷ Frank Abigale

Procurement Red Flags ÷ Linking Fraud Concealment to Red Flags ÷ Most Common Red flags ÷ Red Flags for Specific Procurement Fraud

The Motivations of Fraud ÷ Pressures ÷ Opportunities ÷ Rationalisation

Module 2: Risk-based Strategy to Fight Purchasing Fraud Session 2: Procurement Risk Management

Good Control Activities you should consider Fraud Risk Register Anti-Fraud Policies Code of Conduct Training and Awareness Corporate Culture Procurement Red Flags Checklist Purchasing fraud risk assessment Fraud opportunity reduction through purchasing process improvement Internal controls to reduce purchasing fraud risk Proactive risk-based auditing to detect purchasing fraud Investigations of purchasing frauds identified

Internal Controls over Purchasing

Assess the level of purchasing fraud risk at your organization, including industry and geographic considerations

Define relevant internal control practices (e.g. explicit policies, segregations of duties, vendor selection, independent centralized procurement group)

Review policies, processes, and approval limits Exceptions to normal protocol (e.g. sole sourcing decisions and bid waivers) Vendor monitoring and evaluation criteria

Purchasing Fraud Detection Processes

Risk-based purchasing fraud detection audits Tips and complaints Soliciting feedback from management, employees, the public, and vendors (current, former and

rejected) Vendor monitoring Monitoring of major contracts

Detecting Particular Purchasing Fraud Schemes

Scheme-based purchasing fraud symptoms and detection methods Special considerations for off-book purchasing fraud schemes Special considerations for contract bidding schemes

Module 3: Corruption Prevention in Procurement and Ethics

Session1:Theories of Corruption Behaviour Individual explanations: Rational choice and

opportunity; Psychological theories

Institutional explanations: Social, Cultural and Organizational explanations

Environmental explanations: Opportunity theory; Strain theory; Social learning and neutralization

Session2 : Understanding the Challenges of Corruption Prevention and Integrity Assurance

The Science of Corruption Prevention Corruption Prevention Related Theories and

Definitions Corruption Types, Roles and Facilitators Corruption Prevention General Principles Corruption Prevention Challenges

Session 3: Corruption Prevention Strategies and programs

The Aims and Focus of Corruption Prevention

Corruption Prevention Programs Corruption Prevention Strategies Anti-corruption agencies

Session 4: Corruption Governance Models Risk Assessment and Risk Management Policy Procedure and Control Training and Education Compliance Corruption Investigation

Session 5: Politicisation and Work Place Culture

Politicisation Ethical Leadership Workplace Culture

Session 6: Ethical Models In the Public Sector The public service ethos and overview of

different ethics models Impacts of different management approaches

upon public sector ethics from bureaucracy to risk management

Session 7: Types of Corruption and Misconduct Defining Corruption and the corruption

continuum Fraud Theft and embezzlement Bribery, kickbacks and receipt of benefits Unauthorized disclosure of information and

misuse of databases Conflict of interest and improper association Nepotism and improper influence Deception, lying and perjury Noble cause corruption High-risk corruption (particular reference to

trafficking and political corruption) Session 8: The Key Challenge of Corruption

The corruption continuum Bureaucratic discretion Harms Political Costs Corruption as a social problem Measuring corruption

Module 4: Mechanisms to curb corruption

Session 1: Overview Assessing the adequacy of internal controls and

assuring internal audit independence and effectiveness

Evaluating auditing techniques, procedures, and requirements Identifying internal audit tools and practices that can mitigate corruption-related risks

Disseminating remedies to mitigate internal control weaknesses

Session 2: Public Sector Mechanism Government ethics and integrity Government oversight Transparency in procurement Financial regulatory mechanisms

Module 5: Auditing Procurement Session 1: Internal Audit's Role in Purchasing Fraud Investigations

Purchasing fraud investigation techniques and resources

Enterprise-wide business process and control remediation

Interactive case studies Design Control Activities and Policies

Bid rigging Phantom Vendors Recapitulation

Session 2: The Auditing Process

Audit Objectives Types of Evidence and Documentation Audit Planning and Analytical Procedures Materiality and Risk Internal Control Structure Overall Audit Plan and Audit Program

Session 3: Sales and Collection Cycle

Audit of Sales and Collection Cycle Audit Sampling for Tests of Transactions Accounts Receivable Testing

Session 4: Acquisition and Payment Cycle

Audit of Acquisition and Payment Cycle Acquisition and Payment Cycle/Verification of

Selected Accounts V. Cash Cycle Audit of Cash Balances

Session 5: Completing the Audit and Miscellaneous

Completing the Audit Other Engagements, Services and Reports

Operational and Compliance Auditing

Course Take-away Training Materials( Soft Copies) and notes Hand-outs 8 Gig Flash drive Tablet /Laptop Tea Breaks/ refreshments Course tuition Personal action planning, Certification and Follow-up support (on request)