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Overcoming Corruption Benefits All
The solution to these challenges is
e-procurement, which uses digital technologies
to replace paper-based procurement
procedures. E-procurement improves
transparency, reduces cost and time spent
on procurement, increases the volume of
opportunities to bid, and — critically — reduces
the risk of corruption.
E-procurement does not solve all the problems
associated with government contracting and,
by itself, cannot eradicate corruption — it
is a tool rather than a panacea. It must be
accompanied by other measures to promote
transparency, control and accountability.
These include the creation of an electronic
workflow that incorporates e-procurement,
enterprise resource planning (ERP) systems and
payments. Any technological solution must be
sophisticated enough to differentiate by agency,
with, for example, 80% standard processes and
20% specific business requirements.
If implemented properly, e-procurement and
a supporting electronic workflow can improve
governance. To ensure success, proper
implementation must include education of,
and buy-in from, implementation managers as
well as periodic, independent audits to ensure
accountability.
Ensuring best practices
E-procurement systems will differ among
countries as each has a different governmental
structure and all stakeholders should have an
opportunity to provide input and shape goals.
Nevertheless, there are common e-procurement
best practices, which include:
1.
The creation of a centralized, comprehensive
e-procurement agency that supports all
segments of a particular level of government
(i.e. a national or city procurement agency).
2.
Transparency should be increased by
publishing plans, pre-award criteria,
decisions, awards, modification, laws and
regulations across the procurement cycle on
e-procurement systems.
3.
E-procurement platforms should include
the following B20 recommendations as
requirements:
a.
Promote anti-corruption measures to both
buyers and sellers through education,
with a special focus on small and medium-
sized enterprises, which are often more
at risk from corruption and can lack
resources to implement a response.
b.
Provide a mechanism, such as an
independent government body, or a high
level reporting mechanism, to report
issues of corruption or file complaints.
c.
Require integrity attestations under
which agencies and bidders attest that
they maintain ethical standards as a
pre-requisite to initiate bidding.
4.
Monitoring and oversight of e-procurement
is important. The system should highlight
companies with high reputational risks
and citizens should have access to data
analysis showing figures such as frequency
of a bidder winning contracts, adherence to
contract terms and final cost of contracts
versus bid price.
5.
Adequate resources must be dedicated to
implementing e-procurement so it delivers
the expected results.
Reducing fraud and encouraging transparency
Procurement is just one way in which corruption
is able to flourish. Numerous opportunities for
fraud and embezzlement exist once contracts
have been awarded. In some countries, the
widespread use of electronic payments and
invoices has helped to reduce fraud associated
with the purchase of goods and services by
providing an audit trail of payment activity for
all government outflows.
However, in many markets payment by cash
remains typical, even for high value items,
while paper invoices are standard. The use of
cash is inefficient given the costs of handling
and safeguarding it: it introduces significant