Procurement is a function that exposes to the risk of corruptions. The risk may occur in any sector, whether public or private or non-for-profit. Left unchecked, corruption may become a culture within an organisation and hard to be removed. Corruption damages trust within the organisation, leading to weaker collaboration and lower productivity. Anti-corruption is at the centre of ethical and responsible procurement. This post will suggest you some methods to curb and control the bribery risks in procurement and supply.
Check and balance
“Power corrupts. Absolute power corrupts absolutely”. This adage summarises very well about destructive nature of power. Giving too much power to anyone increases the risk of corruption. Therefore, decreasing the power by ‘check and balance’ mechanism becomes the first place method when talking about bribery and corruption.
In public sector, ‘check and balance’ reflects very well in the country’s constitution. Merely every countries in the world have three branches of power: legislative, executive and judiciary. Besides, in some countries, regarding finance and public procurement, National Audit Office can play a role. Since the executive branch engages in procurement more usually than the other two, the Audit Office is often placed under the legislative branch to ensure its independent and reduce the risk of conflict of interest.
Private and non-for-profit sector can also learn about this practice. The Audit Committee is a agency under Board of Directors (in private enterprises) or Board of Trustees (in third sector organisations). This committee is in charge of checking the transactions made by procurement and executive board. The committee receives no benefits from executive board, but its budget is allocated by the Board of Directors. Audit Committee can also outsource its operations to an independent auditing company. Especially when the committee is investigating corruptions, the job can partially done by specialised forensics auditors.