Thank you, sir.
In the procurement process the objective of the purchasing organization is to get the best value for money--the best possible work at the lowest possible cost. To this end, governments and large organizations establish formalized procurement processes involving competitive tendering in many instances. These formalized processes will have controls built into them to ensure that the employees of the organization act in the best interests of the employer.
Effective as these systems may be, they inevitably leave some margin of vulnerability to procurement fraud. By procurement fraud I mean largely the deliberate overcharging of the customer by the supplier, often in connivance with corrupt employees or agents of the victim organization. The factors that give rise to these vulnerabilities are numerous, but the following are the three chief ones.
First, controls can often be circumvented by employees acting in collusion with one another or with external actors. Second, senior managers often have the authority to override controls at crucial decision points. Third, as control systems become increasingly bureaucratic and complex, a point of diminishing returns is reached beyond which any further complexity or bureaucracy actually gives rise to an increase in the opportunities to commit fraud. The vulnerabilities to fraud exist at every stage of the process, as we shall now see.
I direct the committee's attention to slide three in the package I have provided and I trust your learned clerk has supplied to members. Is that correct?