RM20m procurement fraud
KUALA LUMPUR: MALAYSIAN graft busters are zeroing in on several major cases of procurement fraud which have cost the government millions of ringgit.
The Kuala Lumpur branch of the Malaysian Anti-Corruption Commission (MACC), which is in its final stage of an ongoing crackdown, had been gathering intelligence over the past few months. It is expected to haul in several high ranking staff from the public sector in their investigation soon.
Its director, Datuk Seri Ahmad Khusairi Yahaya, said the commission had, from its investigations that began in January, uncovered five cases involving RM20 million.
Aside from senior government officers, those suspected of involvement in falsification of claims and fraud include individuals in private agencies and associations.
“We have recorded an increase in the number of cases involving false claim submissions and procurement fraud that goes back five years.
“In the first three months of this year, we uncovered cases which caused the government to lose RM20 million,” Khusairi told the New Straits Times.
He said the commission had seen favourable response from the public who had come forward to lodge 114 reports involving false claims amounting to about RM31 million over the past five years.
However, he expressed concern over the worrying trend of corrupt practices and abuse of power involving government procurements.
The statistics, he said, were of cases recorded in Kuala Lumpur alone. MACC Investigation Division director Datuk Azam Baki told the NST that the commission would likely expand the operations, codenamed Op Tiris, across the country.
“We are looking at establishing from our investigations if cases of such fraud were linked to individuals, as well as government servants, from other states,” he said.
Azam blamed the lack of monitoring and failure to comply with policies in place to promote good governance as among the main reasons behind corruption and leakages in spending in the system.
“Policies of good governance are there to be observed. Problems happen when they don’t (observe these policies).
Government agencies, for example, have procedures and due diligence that must be carried out, like those for the tender process which require the participation of three to four companies, which they don’t comply with.
“As a result, it opens room for corruption when only one or two companies come in, to inflate the prices of goods and services,” he said, adding that there were companies flooding the system with their own tenders, thereby blocking others.
Khusairi said the sharp increase in the amount of government losses due to corruption had prompted MACC to focus on pursuing cases of falsification of claims.
The graft busters had identified 16 ways the unscrupulous had been cheating the system. They include officers responsible for procurement receiving commissions, leaking the value of the contract to bidders, plagiarising proposals submitted by other companies, getting other companies to join in the tender process with higher bids as well as tweaking documents and profiles of other companies.
Many of those under investigation were suspected to have colluded with suppliers to obtain quotations and confirm receipt of goods even though deliveries were incomplete or did not meet specifications.
They also “rewarded” projects to their immediate family members. Taking commissions from bidders, however, was the most common corrupt practice, said Khusairi.
“They will usually ask for five to 10 per cent of the project value. The percentage of commission sought will be set lower if the project value is high. “Most of the time these people break more than one law.
“They demand commissions, then leak the other quotations, issue payments despite the project being incomplete and accept the goods and services delivered when they were insufficient.” Khusairi said the commission had identified eight violations committed by suppliers which included bribery, using middlemen to collect profiles of other companies participating in tender processes, allowing companies to abuse letters or other companies’ profiles for the purpose of meeting the requirements of market research and appointing brokers to lobby for projects.
Urging heads of department to monitor their subordinates, Khusairi said leaving matters on procurement management solely to their appointed officers would only promote abuse of power.
“They should not hand over everything to their officers without supervision. “There is a need for a proper monitoring system and layered approving process.
“This will reduce an organisation’s dependency on one person in making the decision on a purchase,” he said, adding that surprise inspections should be held from time to time.
Heads of department, he added, should monitor suppliers or contractors rewarded with projects in order to identify any possible monopoly.
http://www.nst.com.my/news/2016/03/132558/rm20m-procurement-fraud
The Kuala Lumpur branch of the Malaysian Anti-Corruption Commission (MACC), which is in its final stage of an ongoing crackdown, had been gathering intelligence over the past few months. It is expected to haul in several high ranking staff from the public sector in their investigation soon.
Its director, Datuk Seri Ahmad Khusairi Yahaya, said the commission had, from its investigations that began in January, uncovered five cases involving RM20 million.
Aside from senior government officers, those suspected of involvement in falsification of claims and fraud include individuals in private agencies and associations.
“We have recorded an increase in the number of cases involving false claim submissions and procurement fraud that goes back five years.
“In the first three months of this year, we uncovered cases which caused the government to lose RM20 million,” Khusairi told the New Straits Times.
He said the commission had seen favourable response from the public who had come forward to lodge 114 reports involving false claims amounting to about RM31 million over the past five years.
However, he expressed concern over the worrying trend of corrupt practices and abuse of power involving government procurements.
The statistics, he said, were of cases recorded in Kuala Lumpur alone. MACC Investigation Division director Datuk Azam Baki told the NST that the commission would likely expand the operations, codenamed Op Tiris, across the country.
“We are looking at establishing from our investigations if cases of such fraud were linked to individuals, as well as government servants, from other states,” he said.
Azam blamed the lack of monitoring and failure to comply with policies in place to promote good governance as among the main reasons behind corruption and leakages in spending in the system.
“Policies of good governance are there to be observed. Problems happen when they don’t (observe these policies).
Government agencies, for example, have procedures and due diligence that must be carried out, like those for the tender process which require the participation of three to four companies, which they don’t comply with.
“As a result, it opens room for corruption when only one or two companies come in, to inflate the prices of goods and services,” he said, adding that there were companies flooding the system with their own tenders, thereby blocking others.
Khusairi said the sharp increase in the amount of government losses due to corruption had prompted MACC to focus on pursuing cases of falsification of claims.
The graft busters had identified 16 ways the unscrupulous had been cheating the system. They include officers responsible for procurement receiving commissions, leaking the value of the contract to bidders, plagiarising proposals submitted by other companies, getting other companies to join in the tender process with higher bids as well as tweaking documents and profiles of other companies.
Many of those under investigation were suspected to have colluded with suppliers to obtain quotations and confirm receipt of goods even though deliveries were incomplete or did not meet specifications.
They also “rewarded” projects to their immediate family members. Taking commissions from bidders, however, was the most common corrupt practice, said Khusairi.
“They will usually ask for five to 10 per cent of the project value. The percentage of commission sought will be set lower if the project value is high. “Most of the time these people break more than one law.
“They demand commissions, then leak the other quotations, issue payments despite the project being incomplete and accept the goods and services delivered when they were insufficient.” Khusairi said the commission had identified eight violations committed by suppliers which included bribery, using middlemen to collect profiles of other companies participating in tender processes, allowing companies to abuse letters or other companies’ profiles for the purpose of meeting the requirements of market research and appointing brokers to lobby for projects.
Urging heads of department to monitor their subordinates, Khusairi said leaving matters on procurement management solely to their appointed officers would only promote abuse of power.
“They should not hand over everything to their officers without supervision. “There is a need for a proper monitoring system and layered approving process.
“This will reduce an organisation’s dependency on one person in making the decision on a purchase,” he said, adding that surprise inspections should be held from time to time.
Heads of department, he added, should monitor suppliers or contractors rewarded with projects in order to identify any possible monopoly.
http://www.nst.com.my/news/2016/03/132558/rm20m-procurement-fraud
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