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What compromises Procurement Integrity? A Risk-based Approach

What compromises Procurement Integrity? A Risk-based Approach. J Graham Joscelyne ICGFM - Miami April 2003. What is the Perception?. Transparency Process Result Proper oversight Fairness Good use of taxpayers money Good control. But, what we sometimes find is …. Greed Inefficiency

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What compromises Procurement Integrity? A Risk-based Approach

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  1. What compromises Procurement Integrity?A Risk-based Approach J Graham Joscelyne ICGFM - Miami April 2003

  2. What is the Perception? • Transparency • Process • Result • Proper oversight • Fairness • Good use of taxpayers money • Good control

  3. But, what we sometimes find is… • Greed • Inefficiency • Lack of proper oversight • Bureaucracy that acts as a cover-up • Corruption But, procurement still ‘happens’

  4. And, to complicate things… • It’s learned, not studied • There’s a shortage of specialists • It’s often disconnected from the Financial Management function • It’s not seen as a career enhancer

  5. But, while Procurement volumes grow… • Decentralization is being pushed • Money is fungible • Fewer ‘eyes’ on the process • Old systems for new processes • Less accountability • Scale and complexity goes up too Risks also increase significantly

  6. What are we talking about? Look at the impact of war alone • Weapons • Replenishment ($? Billion out of $74bn) • Purchase (1991 - $10bn: 1992 - $11bn: 1993 - $20bn) • Logistical needs in the field • Reconstruction • Development • Food aid • FAO - $86.7 million • WFP - $1.3 billion And all this needs to be spent in a hurry

  7. For a time like this and beyond… Need procurement systems that are: • Ethically based • Words and action the same • Transparent • Efficient • Reliable • Disciplined At all times, trust must be built

  8. A Role for the Financial Manager? Risks you can, look out for… • Lack of a tender process • Unclear selection criteria • Unresolved legal issues • Confidentiality is ignored • Agreed process is circumvented

  9. Other risk areas to consider… • Are policies in place? • Has a procurement plan been developed? • Is there a criteria for weightings • What is being done about conflict of interest, before it occurs? • What about corruption? • Checks and balances throughout? • Does the scope of works match the selection criteria?

  10. Overarching Risks • Poor governance structure • Government interference • Decentralization • Unscrupulous contractors • Window-dressing

  11. Particular Pressure Points • Poor procurement process • Lack of evidence • Poor record-keeping • Lack of database on particular vendors • Lack of quality control • Outcomes of little interest

  12. Like a gold ring in a pig’s snout is a beautiful face on an empty head.Proverbs 11 Watch out for this – it is quite common

  13. Conclusion • We can’t stop the spending but we can address the risks • We can’t avoid the weaknesses, but we can highlight the effects It is our professional duty

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