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This paper aims to explore selected real-world procurement fraud incidents in the US Department of Defense (DoD) and the implications of these incidents to the DoD’s contracting processes and internal controls.

This paper analyzes actual procurement fraud incidents and identifies in which phase of the contract management process the fraud occurred and which internal control component was associated with the fraud scheme.

The fraud incidents generally occurred during the source selection and the contract administration phases and involved the control activities, monitoring and control environment components of internal control.

The fraud incidents are analyzed using contract management and internal control frameworks adopted by the US Government. Recommendations are developed for improving contracting processes and internal controls as an approach to deterring and detecting procurement fraud and may be applicable to other international public procurement bodies.

Governments are ensuring auditability in public procurement as a means of improving agency governance. The research findings suggest that an emphasis on capable contracting processes and effective internal controls should be adopted for fighting procurement fraud.

Ensuring auditability in public procurement has a far-reaching effect in society. The value of capable processes and effective internal controls is gaining much attention in public agencies, as they strive for accountability, integrity and transparency in their governance processes.

By emphasizing capable processes and effective internal controls, governments can apply a strategic approach to detecting and deterring fraud and thus ensure that government monies are spent in the most effective and efficient ways.

This paper aims to discuss the factors that cause individuals to commit fraud, especially in the public procurement context. All this time, an empirical review of public procurement fraud has only focused on the macro and micro level, as well as its losses on the country's economy. This paper highlights individuals’ fraudulent behavior from the four elements of the fraud diamond theory, namely, pressure, opportunity, rationalization and capability.

This paper is a literature review that discusses the fraudulent behavior of bureaucrat as a procurement official in the context of public procurement. This review uses fraud diamond theory as its theoretical framework to explain the attributes to do fraud.

Public procurement is a high-risk area for fraud (corruption), particularly in the government institution. It cannot be denied that the situation factor (pressure and opportunity) will interact with psychological aspects (rationalization) and individual capability to direct the individuals to commit fraud. This study discusses how existing pressure (motivation) and opportunities are used by individuals who have the capability to rationalize their actions. This literature review also endeavors to shed light on the strategy to prevent, detect and control the causes of fraud.

This paper provides an understanding of regulators, auditors and other employees in recognizing the characteristics and nature of fraud antecedents. This understanding can help prevent various forms of procurement fraud that occur within their organizations. This paper also can be a guideline to assist public sector organizations in designing effective internal control systems to prevent fraud in the process and practice of public procurement.

Public procurement has a central role that enables the government to allocate the budget effectively and efficiently. Compliance in implementing procurement rules and procedures will improve the quality of public services.

There exists relatively little study outlining the factors underlying of bureaucrats’ (procurement official) opportunistic behavior on procurement activities. The authors focused on bureaucrats’ behavior because they have unique positions of power and responsibility of the procurement process. On the one hand, they have a crucial role in serving the public and safeguarding public assets. On the other hand, they have the ability to collaborate with politicians and business actors in corrupt procurement practices. Therefore, the discussion on this topic is very relevant and interesting.

The purpose of this paper is to analyze an ongoing fraud case in the US Navy involving the procurement of ship-husbanding services. The fraud acts will be analyzed from three perspectives–contract life cycle, internal controls and fraud schemes.

A data search was conducted to collect publicly available documents issued by the US Department of Justice (DOJ). A content analysis was used to analyze the fraud acts by aligning them with the contracting phase, internal control component and fraud scheme category.

The majority of the fraud occurred in the contracting phases of contract administration, followed by procurement planning and then source selection. The majority of the fraud occurred because of internal control component weaknesses in the control environment followed by information and communications. The majority of the fraud was aligned with the fraud scheme of collusion, followed by billing, cost and pricing.

Because this is an ongoing investigation, additional DOJ information will become available and provide additional insight on the contracting phase, internal control component and fraud scheme.

The analysis suggests that the Navy’s lack of trained personnel, capable processes and effective internal controls result in the increased vulnerability to procurement fraud in its husbanding support services program.

To the best of the authors’ knowledge, this study is the first to analyze fraud through the lens of auditability theory, specifically by the contracting phase and internal control component. Public agencies can enhance fraud detection and deterrence efforts by understanding how weaknesses in contracting processes and internal controls may increase an organization’s vulnerabilities for fraudulent activities.

The high occurrence of procurement fraud requires the management of an enterprise, the risk manager of the enterprise and the internal auditor to address procurement fraud risks effectively within the enterprise risk management concept. The purpose of the article is to explain a procurement fraud risk management process which will serve as a comprehensive framework for enterprise risk managers and for internal auditors to limit the enterprise’s exposure to procurement fraud as far as possible. The study by Venter (2005) on which the article is based proposes a procurement fraud risk matrix which can be used to manage fraud risks within the procurement function efficiently. This matrix is based on the Committee of Supporting Organizations of the Treadway Commission’s (COSO’s) Enterprise Risk Management ‐Integrated Framework which is specifically applied to address the procurement fraud risk problem.

The purpose of this paper is to research how local councils in England responded to a national initiative intended to address the risk of the involvement of organised crime in local government procurement fraud. In so doing, it considers definitional issues before undertaking original research to explore how councils responded and, through in-depth interviews with three councils, what initial explanations may explain the responses. It concludes that the national initiative was insufficiently thought-through, and that councils’ responses were significantly influenced by the relevance of the threat of organised crime, financial constraints and competing priorities.

The case study involves a literature review, an analysis of official documentation, a questionnaire to local councils in the north of England and semi-structured interviews with anti-fraud practitioners in three councils in the northeast of England. The approach is to provide an analysis of the implementation of a national initiative to promote a local government response to procurement fraud by organised crime.

On the basis of original research, the paper proposes that the national initiative was insufficiently thought-through, and that councils’ responses were influenced by the relevance of the threat of organised crime, financial constraints and competing priorities.

The research looks at a national initiative and how local councils responded within the context of financial and other constraints. The research is limited in terms of the range of responses it sought, and that it only studied the experience of three local councils in detail. On the other hand, its findings support further research into the implementation of national initiatives in terms of practice on the ground.

The findings identify issues surrounding the design and implementation of national anti-fraud policies from the perspective of local government and will be of value to practitioners and academics interested in fraud, policing, organised crime, local government and policy making.

The paper is the first study in the UK on the local implementation of national strategies on procurement fraud and organised crime and raises positive and less-positive aspects of how far national strategies and intentions are addressed on the ground, with a focus on what factors may influence local implementation.

This study aims to examine the effects of fraud triangle (pressure, opportunity and rationalization) on individual fraudulent behavior in Indonesian public procurement. Empirical research in this area is relatively sparse.

Data were collected using laboratory experiments.

The results revealed that fraudulent behavior is higher when an individual has high pressure and high opportunity. These factors play an important role in determining individual rationalization. Most of participants used “displacing responsibility” to rationalize their actions. This study also demonstrated that negative affect mediates the relationship between fraudulent behavior and rationalization.

First, fraudulent behavior research cannot be separated from social desirability bias. Second, the experiments only involved individual decision-making, not in groups. Finally, this study did not examine the effectiveness of rationalization in reducing negative affect.

Over the years, the government has only focused on the identification of pressure and reduction of opportunities, but ignored individual psychological reasons. Considering that procurement fraud is always increasing, the government must more focus on individual reasons to design an effective prevention and detection system.

There are various conflicts of interest in public procurement budgeting. These conflicts can distort resource allocation and causes budget leakage. As a result, the government is incapacitated to achieve social and economic goals of the community.

There is limited research about fraud in public procurement budgeting, especially in developing countries. In addition, the fraud triangle research, which focuses on rationalization is still limited.

The purpose of this paper is to explore whether opportunities for fraud and corruption might be reduced or increased by rules governing public procurement. The focus is on specific European legislation – Procurement Directive 2004/18 on the coordination of procedures for the award of contracts for public works, public supply and public services by public bodies within all EU Member States – however similar issues would arise in other jurisdictions.

The procurement process is examined in relation to three stages of procedure: preparation of specifications, selection of tenderers, and execution of contracts, within each of which some specific risks (red flags) are identified.

Particular risks that may not have been sufficiently addressed, in terms of research or legislation, arise at the first of these stages; accordingly this paper focuses there. Generally, risks are summarised in terms of insider‐driven specifications, low visibility of procurement processes, and ample opportunities for renegotiation of terms. Risks may be increased by innovative procurement practices that have the effect of extending the manoeuvring between tenderers and public bodies, such as competitive dialogue.

Fraud and corruption risk in public procurement is an area deserving detailed and comparative study, with special attention to the pre‐contracting stage. Research on this topic within EU Member States should go hand in hand with enquiry into international procurement, and into the EC's own rules as applied by its institutions and bodies.

Suggestions for risk‐reduction are put forward in relation to quality standards and pre‐award publicity.

After some time as the Cinderella of crime policies, large‐scale frauds attract greater interest. This paper gives grounds for asking whether, in relation to procurement fraud, a combination of traditional practices and modernisation may outpace anti‐fraud measures.

Purchasing and procurement fraud is a large area of fraudulent activity. It is one of the most prevalent types of fraud affecting British industry today. This paper highlights the key risks of fraud in the purchasing and procurement area and the warning signs.

Any study of procurement frauds in India would be primarily in the context of procurements by the government and public sector undertakings. India, with its mixed economy, has a vibrant private sector and reported cases of procurement frauds from private business and industry have been few and far between. The law enforcement and investigating agencies have been primarily concentrating on protecting government funds. Government departments and public sector undertakings are the biggest buyers in India with purchases ranging from ordinary office stationery to the most sophisticated technical equipment required in railways, telecoms, power and defence sectors etc.

A remarkable example of coordination between IGOs to deal with corruption and fraud in public procurement is the “Agreement for the Mutual Enforcement of Debarment Decisions” signed by the World Bank and the main regional Multilateral Development Banks (MDBs) in 2010. This article will try to examine the characteristics of the MDBsʼ cross debarment agreement and its significance for the MDBs that adhered to it in terms of the process of harmonization that resulted from it. Secondly, the article discusses the potential benefits and challenges connected to the extension of this agreement to other MDBs or to other initiatives that have been initiated in parallel to, or in imitation of, the MDBsʼ cross debarment agreement.