Technology is useful against procurement fraud

procurement fraud
04 May 2017

The integrity of state expenditure at all levels of governance has come under increasingly heavy fire from South African citizens over the past few years, as the press has reported on the growing incidence of conflict of interest in public procurement.

In August 2016, the public service regulations, which restrict government employees from doing business with the state were passed. The transitional period allowed until the 31st of January for employees engaged in business with the state to decide if they would keep their jobs or resign in order to continue doing business with state.

In February, following President Zuma’s State of the Nation address, then Minister of Home Affairs, Malusi Gigaba, led a media briefing of the governance and administration cluster, announcing plans now that the transitional period was over.  He said the department was compiling a list of employees who failed to comply with regulations and that disciplinary processes against these individuals would follow.

Gigaba also reported on the success of government’s national anti-corruption hotline and the number of fraud cases referred to government departments, being 18 778 cases of which ninety percent were now closed. He said 3600 officials were found guilty of misconduct between 2004 and 2017.  During this period 1700 officials were dismissed from the public service, 447 were fined, 137 were demoted, 921 were given final written warnings, 395 were prosecuted and R410 million was recovered.

The ability to identify procurement fraud is enhanced with technology enabled solutions that are useful toward the crackdown in both public and private business, says Rudi Kruger, general Manager of Risk Management at LexisNexis Data Services. “A number of developments in information technology, such as Lexis® ProcureCheck, make it easier to identify non-compliant state employees, highlight potential fraudulent activity, and can be used to help streamline the process of bringing perpetrators to book,” said Kruger.

Lexis ProcureCheck is an easy to use web based system designed to help organisations, including government departments, corporates, financial institutions, business bodies and risk/procurement professionals identify and prevent corruption within procurement processes.

The system, which identifies ownership of property and the business interests of employees, helps recognise conflicts of interest within organisations and potential supply chain partners.

With the help of South African Fraud Prevention, Lexis ProcureCheck assists with identifying potential fraudulent activity within vendors and employees. It also enables users to investigate negative and positive news on vendors and employees to assist in mitigating reputational risk.

Another key benefit is that it assists supply chain management officers to ensure compliance with the Public Finance Management Act and the Municipal Finance Management Act.

Lexis ProcureCheck’s key features include:

  • Electronic Web based workflow tool
  • Provides automated irregularity alert reports
  • Provides vendor and staff reports (useful for King III committees)
  • Allows you to create your own internal vendor list (preferred and restricted vendor indicators)
  • Allows clients to import vendor and staff lists
  • Vendor vetting (on an adhoc or batch basis)
  • Ongoing monitoring
  • Detailed conflict of interest report.

“With a powerful resource like Lexis ProcureCheck that is readily available to organisations, public servants and employees would be wise to declare their interests and stay within the law,” Kruger added.

For more information, visit

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
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