Fraud reduces the state government鈥檚 capacity to deliver services and support for Western Australian's. Every dollar lost to fraud is a dollar not invested in our healthcare system, education system, economy or public safety.
The information in the connecting pages will highlight the effects, red flags (warning signs) and actions for public authorities to prevent procurement fraud and corruption.
Effects of fraud and corruption in procurement
Show moreFinancial Impact
Consists of unnecessarily high costs, low quality of supplies or works for price, burdening government with financial obligations or purchases not required and with early repair costs that aren鈥檛 required.
Economic Impact
Consists of burdening a government with operational, maintenance and debt servicing liability for investment/purchase. Corruption costs and threat to business operators may also affect economic growth and employment.
Environmental Impact
Corruption can engender choices which can mean that projects do not comply with environmental standards, causing environmental health risks, financial liabilities, or long-term adverse impact on the environment.
Impact of Health and Human Safety
Corruption can engender choices which can mean that projects have quality defects, or sub-standard construction leading to building failure and consequent human losses.
Impact on Innovation
Companies relying on corruption may not spend resources on innovation and non-corrupt companies will be less inclined to invest if they cannot access markets due to corruption.
Erosion of Values
A lack of concern for integrity and the common good among senior officials, as well as corrupt behaviour not being sanctioned, can filter down to more junior officials and reduces their own integrity standards.
Damage to Honest Competitors
Corruption by corrupt bidders, if successful and not sanctioned, damages the honest competitor that invests more in innovation and quality.
Serious Danger to Economic Development
If a government allows corruption in purchases and investments, and often selects projects on their ability to generate bribe payments, investment opportunities are squandered and the country's economic development is delayed.
Sourced from: Transparency International Curbing Corruption in Public Procurement: Handbook. , pp 28-31.
