Definitions of Fraud, Bribery and Corruption

Procurement teams are responsible for spending significant amounts of money as a share of an organisation’s total budget. In healthcare, this is likely to involve the public sector, so the money often comes from members of the public in the form of tax revenue. This is why those who work in procurement need to be aware of the forms of crime to which they might be exposed.

These include:

Fraud is any act of deception intended for personal gain or to cause a loss to another party. This includes both financial and non-financial gain and loss.

• Many of the frauds committed fall within the banner of procurement fraud as most companies obtain products or services through some form of procurement exercise.
• Procurement fraud can be one of the more complex frauds to investigate; there are many ways it can be committed. A simple definition of procurement fraud would be ‘fraud within the procurement lifecycle of a product or service, including long-term maintenance contracts’. This means influencing the procurement process by illegal or unethical practices.

Bribery is offering an incentive to someone to induce them to act improperly or rewarding them for having done so.

• A bribe could be money, political favour or any number other things, which are of value to the person who receives them. It can also include gifts and hospitality.
• In procurement, a bribe may be offered in return for the award of a contract or for providing information that will be of benefit to someone hoping to win a contract. A bribe may also be offered to buy someone’s silence in cases in which an existing supplier has not fulfilled a contract; for example, in terms of quality or quantity.
• Research carried out by the OECD (Organisation for Economic Co-operation and Development) shows that bribery is a particular concern in the medical industry (along with defence, property and mining).

Corruption is dishonest or fraudulent conduct by those in a position of authority, typically involving bribery.

 Organisations should take steps to ensure that their key stakeholders are aware of the risks of fraud. Regular training should be offered to senior management and those working in legal affairs, procurement and compliance.

Scale of the problem in Fraud, Bribery and Corruption

Detailed below are some statistics that give an indication of the global loss of funds due to fraud and corruption. This means that large amounts of money are lost and therefore not available to invest in the community or infrastructure.