Global public sector 'facing issues of supply chain fraud'

Public sector organisations across the world are increasingly having to deal with issues relating to fraud in their supply chains.

A report from PricewaterhouseCoopers (PwC) has suggested that the onset of public sector budget cuts in many nations is leading to a rise in fraud against government bodies.

Since 2009, the proportion of external fraud cases involving suppliers has risen from 13 per cent to 32 per cent, with cases of false invoicing schemes and requests for unauthorised changes of supplier details on the rise.

Moreover, not enough public bodies are taking action to counteract this trend, with only a quarter reporting the termination of supplier relationships after discovering incidences of fraud.

Ian Elliott, partner for forensic services at PwC, said: "Procurement departments will face a whole raft of new challenges to ensure that the quality and cost-efficiency of the services being delivered are not compromised."

This comes after an Ernst and Young report from November 2011 suggested that businesses are under increasing pressure to be aware of third-party risks and bad practices among external partners.