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Procurement Frauds

Procurement Frauds


Course Introduction:

Procurement fraud is one of the most, if not the most, common fraud schemes within an organization. Procurement is where the money is. Managing Procurement fraud risk have always been a painful and unfruitful attempts by many auditors and managers. It need not be – if you are equip with the right knowledge of Procurement processes, systems, procurement fraud modus operandi, red flag, and the skills to detect them early! Using appropriate strategies and tools we can even prevent and manage Procurement fraud risk to the lowest!

From this programme, participants will gain complete overview of procurement processes and systems. All stages within procurement lifecycle will be discussed in detail so as to reveal the “inside” of sourcing and buying activities and its unspoken rules. The programme aims to cover the learning and application of tools and techniques procurement officers and auditors should possess in order to address potential frauds and lapses in buying lifecycle. At the end of the course, participants will be able to assess or audit their organizations for possible control weaknesses in the procurement processes and deploy appropriate strategy to minimize or eradicate those weaknesses.

Learning Outcome

On completion of this program participants will be able to:
• Understand the principles, process, structure, and various aspect of an organized procurement function
• Identify potential areas of concern and fraud schemes in typical sourcing and buying lifecycle
• Identify, detect and prevent various type of procurement fraud schemes
• Implement fraud risk governance and strategy within an organization to minimize and eradicate procurement frauds

Target Audience

• Internal and external auditors who are responsible in the review of procurement processes and activities in civil service or private sector organization.
• Business controller, risk manager, governance and compliance manager whose risk management include procurement fraud risks
• Procurement officers and manager who like to implement control within his/ her department
• Forensic auditor, investigator, senior investigator who investigate procurement fraud
• Internal audit manager, audit director and chief internal audit officer who like to gain overview of and manage procurement fraud risks within the audit universe

Course Outline

1. Overview of Procurement Fraud

2. 29 schemes of Procurement Frauds in eight Categories
a. Corruption
b. Specification manipulation
c. Fake buys
d. Delivery schemes
e. False claims
f. Bidding schemes
g. False info
h. Forgery

3. Detecting Procurement Frauds red Flags

4. Investigating Procurement Frauds
a. Document Review and Data analytic
b. Surveillance and Digital Forensic
c. Information Seeking Interviewing
d. Confession Seeking Interview
e. Basic concept of Evidence
f. Effective Forensic Investigation Framework

5. Set up Procurement Fraud risk governance
a. Strategies (Tone at the top)
b. Structure (Centralized, Decentralized Procurement, IPO)
c. Process (COC, Rotations, Forced leave, WB Hotlines)
d. People (Position screening, Training, Rewards and Incentive)
e. Governance Structure (Oversight structure, 1st, 2nd and 3rd line defense)
f. Systems (authorization matrix, SOD, system validation)

6. Common Procurement Principles, Processes and Challenges
a. Sourcing vs Buying
b. Low cost vs best value
c. RFx, tender procedures, online procurement platform
d. Market place platforms (vendor specific, non-vendor specific)
e. Procurement Operational Challenge

Trainer’s Profile

Hoh Soon Cheong
Kent Hoh is a prolific trainer in internal auditing, fraud investigation, corporate governance and personal effectiveness. Kent Hoh started his career in a big 4 firm before progressed to Fortune 500 corporations leading audit and forensic investigation teams there. Mr. Hoh has extensive experience in conducting audit and investigation projects in Asia and other the regions. He conducted various successful projects in Singapore, Indonesia, Malaysia, India, China, Japan, Australia, New Zealand, Brazil, Hungary, Poland, etc. Several of the projects involved multi-million dollars’ scheme and made headlines locally.

Mr. Hoh holds a Master of Business Administration (MBA) from University of Sunshine Coast, Australia, a Bachelor of Law (LLB) from University of London, UK, and a Bachelor of Accounting from University of Malaya, Malaysia. Kent Hoh possesses the qualification of Certified Fraud Examiner (CFE). He obtained the qualification from Certified Information System Auditor (CISA) in 2002. Mr. Hoh passed the full qualifications exams for the UK Chartered Secretary and Administrator (ICSA) and Malaysian Institute of Certified Public Accountants (MICPA) in 1997 and 1999, respectively.

Mr. Hoh has been a trainer for several professional associations in South East Asia. Mr. Hoh is also a frequent speaker for several universities in Shanghai, Nanjing and Hang Zhou, China on auditing and corporate governance. He is currently serving as Vice President of Internal Audit in a Singapore listed company.