Many governments due to the Covid-19 outbreak effects have allocated billions through stimulus packages for emergency pandemic response to address economic problems such as unemployment, assist social-welfare programmes, meet urgent health needs and procure critical medical supplies.
At the same time, the people are looking to the government for their economic survival.
Fraud is a common issue at every stage of a procurement process, especially during this Covid-19 crisis.
Transparency International stated that unfortunately, corruption often thrives during times of crisis, particularly when institutions and oversight are weak and public trust is low.
Combating corruption is such a difficult task and sensitive issue that many national political leaders who support such efforts in principle are hesitant to undertake them in practice.
There is consensus among economists that the Covid-19 pandemic has ravaged the global economy. It will definitely create a monopoly-supplier spontaneously.
It is quite normal that countries responded to the Covid-19 pandemic by loosening procurement procedures and checks and balance. During this crisis, they invoked emergency legislation by awarding tenders through direct negotiation instead of open tenders.
This crisis can create environments ripe for corruption and fraud in procurement such as conflict of interest, embezzlement and tender manipulation or direct award to cronies with all sorts of reasons given to justify the awards.
Subsequently, con artists including corrupt politicians and public officials who have been exploiting every trick see this as a goldmine and opportunity to defraud and make easy money.
Identifying these corruption risks before they happen can help strengthen our response and get the best value for money as well as the right contractors, vendors or suppliers. Bear in mind that the public wants to see even during this crisis whether they are getting their money’s worth from government contracts.
Contracts should be awarded to contractors with evidence of reliability, capability, responsibility, and with a good technical and financial track record.
If possible, it would be good to conduct honest due diligence on the contractors before awarding the contracts since nowadays getting information via the internet is easy, especially on the market price.
The government’s process of acquiring goods and services is diverse, complex and huge.
The Malaysian government previously spent RM40 billion a year to purchase assets and RM35 billion in the service sector. Based on complaints received by the Malaysian Anti-Corruption Commission between 2013 and 2018, wrongdoings involving procurement comprised approximately 43% which topped the list of sectors prone to corruption.
Ambrin Buang, the former auditor-general, predicted that up to 30% of Malaysia’s public project allocations have been lost to mismanagement and corruption. Consider the amount of savings the government would have obtained if it had paid 30% less for goods and services.
In the absence of a culture of accountability and organisational integrity, no one will bear the responsibility or feel embarrassed by their wrongdoings while corruption will be further aggravated.
Corruption during this Covid-19 crisis is a threat to good governance, political stability and the socio-economic development of a nation.
Akhbar Satar is president of the Malaysia Association of Certified Fraud Examiners.
The views expressed are those of the author and do not necessarily reflect those of FMT.
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