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Shutting the fraud gate before another brumby bolts

July 3, 2024

Another Review Finds Vulnerabilities: Millions lost through fraud and corruption in Victorian Government procurement

Ensuring the integrity and transparency of procurement processes is crucial for public trust and value for money. Yet another audit of public sector procurement processes, this time in Victoria, has found government agencies lacking in this area. The Victorian Auditor-General’s report, Assuring the Integrity of the Victorian Government’s Procurement Activities, identifies critical gaps and opportunities for improvement in fraud and corruption controls.

During the planning stage of the audit, ten Victorian Government departments were assessed, with three selected for in-depth analysis. Key highlights include:

  • Varied Effectiveness: While controls exist, their effectiveness varies across agencies
  • Outdated Policies: The landscape of fraud and corruption risks evolves over time. New tactics and schemes emerge, rendering existing controls as outdated or ineffective. Regular updates to fraud and corruption control policies are essential to keep pace with emerging threats
  • Data and Analytics Gap: Few departments utilise data analytics to detect fraud and corruption. There is significant potential for agencies to use data mining, network analysis, predictive analytics, and algorithms to detect patterns and anomalies in purchasing behaviours
  • Conflicts of Interest: Policies need rigorous implementation and practical application, which is not consistently occurring. Many conflict of interest declaration forms lacked approval (at least 10% were not signed off), increasing the risk of misconduct
  • Supplier Screening: Ongoing review and screening of suppliers are lacking in some departments, increasing the risk of fraud or poor performance
  • Employee Screening: Positions deemed high-risk, such as financial delegates, require candidates to declare private interests before employment to mitigate conflicts of interest and potential acts of malfeasence. Thorough offboarding processes are also essential to ensure departing employees no longer have access to systems and sensitive information
  • Training and Awareness: While most departments provide conduct training, consistency and depth vary; specialised training for higher-risk roles is needed to ensure ongoing vigilance and integrity
  • Incident Reporting: Policies exist for reporting fraud and corruption, but incidents are not consistently reviewed to improve controls.

Centium is an independent audit and assurance firm that specialises in enhancing governance, fraud control and integrity across the public and private sectors. We achieve this by offering agencies the following array of governance and risk management services:

  • Probity, Governance, Procurement and Ethics: We have a highly trained team of qualified advisors and experts available to provide independent advice, assistance and analysis of your existing governance frameworks. Experienced subject-matter-experts are on hand to work with you in reviewing the effectiveness of existing frameworks, or to enhance your in-house capabilities.
  • Fraud and Corruption Risk Management and Prevention: Fraud, Bribery and Corruption can take place in a myriad of ways and at any level in the organisation. We conduct maturity assessments, health checks and deep dives on your risk frameworks, policies and control environments. We are proficient at designing and implementing frameworks and control systems, aligned to the Australian Standard for Fraud and Corruption Control, and in a way that is scalable and commensurate with your organisation’s size, business mix and level of complexity.
  • Internal Audit & Maturity Assessments: Centium has many decades of combined procurement and tendering auditing experience across Australian, State and Local Governments.  We have used this experience to develop an innovative and comprehensive risk maturity model that can benchmark the maturity of your procurement and contract management activities. 

Fore more information, please read our article here : Procurement and Contract Management Maturity Model

  • Leveraging Data Analytics: Whether you are seeking to mitigate fraud and corruption risk, insider threats, or data theft and information misuse, our team of experts are across the most up-to-date forms of data analytics. Prevention and detection are forefront threads in our approach to ensure organisations are best placed to detect and respond to anomalies and suspicious patterns in a timely manner.
  • Risk Management: Whether you’re undertaking digital or business transformation or dealing with risk as a BAU activity, our approach toward risk management is in line with contemporary best practice and upcoming changes for the risk and compliance community. If you would like to get ahead of the curve, let us know.
  • Incident Response and Review: We are systems, information management and cyber security experts. We can help you to establish effective incident and issues reporting systems that result in continuous business improvement and organisational risk culture.
  • Conflict of Interest Management: We have some of the nation’s most highly regarded ethics advisers on the Centium team. Whether it is one-off advice or assistance in the design and implementation of a holistic conflict management and internal reporting framework, we can tailor according to your needs.
  • Supplier and Employee Screening: We can help you to develop protocols for continuous validation and vetting. We can focus on the scale of risk associated with employees, critical operations and material service providers, allowing you to focus on the highest forms of risk in a tiered and structured way.
  • Workplace Investigations: We have assembled, arguably, Australia’s most highly respected and skilled team of workplace investigators in Australia. We provide confidential independent investigation services that assist in addressing misconduct and wrongdoing. We have extensive fraud and corruption forensic investigation experience.
  • Training and Awareness Programs: We specialise in the design and delivery of training sessions focused on strengthening organisational culture of integrity and compliance.We offer several tiers of training ranging from the fraud and corruption basics up to a masterclass for staff in high-risk and decision-making roles.

Dr Allan Yates, Centium's foremost expert in fraud, bribery and corruption, brings extensive experience in corporate advisory, probity, and risk management across a diverse range of public and private sector organisations. He is an industry recognised speaker and lecturer on ethics, integrity, and fraud prevention.

For more information on how Centium can support your organisation in strengthening its fraud and corruption controls, contact Director Probity & Governance Lisa Braid

Assuring the Integrity of the Victorian Government’s Procurement Activities, Victorian Auditor-General’s Office, VAGO, 20 June 2024, https://www.audit.vic.gov.au/report/assuring-integrity-victorian-governments-procurement-activities?section= .

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