EDITORIAL: Fraud in procurement will get out of hand if action is not taken

Sunday April 22 2018

RWANDA TODAY
By RWANDA TODAY
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Procurement fraud is one of a serious offences that the government must confront. In recent years, this fraud has flourished in government agencies where lucrative tenders are awarded to companies with no capacity to deliver.

While Rwanda ranks favourably by global standards in the fight against corruption, the increasing cases of flawed public tenders take off the shine.

For instance, Rwanda Today has learnt that the tender process to supply books to facilitate implementation of the new curriculum was fundamentally flawed with the tender being awarded to companies that failed to effectively execute the programme.

This undermined the ongoing efforts to implement a new curriculum designed to ensure that schools teach what is relevant.

In a separate investigation, Rwanda Today has also established that the construction of the one-stop border post at Gatuna has been delayed because the contract was initially awarded to a company that failed to deliver within the set deadlines.

In a country that has built a reputation as corruption “light,” the current trend is worrisome. It begs the question: How and why do incompetent companies keep winning public tenders?

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This raises suspicion of fraud either involving senior officials who work behind the scenes to help these companies to secure contracts or it is simply negligence and failure to do due diligence.

Whether in a public or private setting, procurement fraud is often “quid pro quo,” whereby a favour or advantage is given in exchange for something.

In a typical procurement fraud scenario, the vendor is awarded the contract, typically well above market prices; the procurement manager receives cash, material goods or other benefits in exchange for awarding the contract.

Yet, this wasteful expenditure comes at a huge cost to the taxpayer, who has to pick up so many other bills. And perhaps more importantly, it also undermines implementation of key government programmes.

It is not enough to sack the officials involved in such fraud activities without ensuring the funds are recovered or reimbursed.

Officials involved should pay the ultimate price with government auctioning their property not only to send a strong signal to discourage the practice but also to minimise the losses.

While the government is in the process of amending and stiffening penalties for corruption, the fact is procurement fraud schemes are difficult to detect.

The focus has to be on prevention, including rotating procurement staff and establishing on-site management with strong oversight over procurement practices; providing ethics, compliance and bribery training for all employees and vendors.

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