What compromises Procurement Integrity A Riskbased Approach

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

• Its learned, not studied
• Theres a shortage of specialists
• Its often disconnected from the Financial
  Management function
• Its 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 pigs snout is a beautiful
face on an empty head.Proverbs 11

• Watch out for this it is quite common

13
Conclusion

• We cant stop the spending but we can address the
  risks
• We cant avoid the weaknesses, but we can
  highlight the effects

It is our professional duty