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Compliance & Governance

Procurement Fraud

Procurement fraud is any deliberate deception in the buying process that results in financial or other gain, such as fake invoices, bid rigging or kickbacks.

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Because procurement moves large sums and involves choosing suppliers, it is a common target for fraud. Typical schemes include billing for goods never delivered, phantom or duplicate suppliers, inflated invoices, collusion between bidders, and kickbacks paid to influence an award. Fraud can be committed by staff, suppliers or the two working together.

The strongest defences are structural: segregation of duties so no one person controls a purchase end to end, three-way matching before payment, competitive sourcing, and a complete audit trail. Digital procurement makes these controls automatic and surfaces red flags — duplicate invoices, split orders or unusual pricing — far faster than manual checks.

Key points

  • Segregation of duties stops a single person from raising, approving and paying an order.
  • Three-way matching catches invoices that do not tie to a real order and receipt.
  • Audit trails and analytics expose duplicate suppliers, split orders and price anomalies.

Frequently asked questions

What is procurement fraud?
Procurement fraud is deliberate deception in the buying process for gain — such as fake or inflated invoices, phantom suppliers, bid rigging or kickbacks.
How can procurement fraud be prevented?
Through segregation of duties, three-way matching, competitive sourcing, complete audit trails and analytics that flag duplicate invoices, split orders and unusual pricing.

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