15. My organisation carries out due diligence on new suppliers, including credit checks and checks for conflicts of interest.

Public Sector Fraud Awareness Survey - Findings: Fraud prevention.

Observation:

47.5% of respondents say that they carry out due diligence checks on new suppliers.

Pie chart of Question 15: My organisation carries out due diligence on new suppliers, including credit checks and checks for conflicts of interest.

What some respondents have said:

“Some checks are done regarding conflicts of interest but only of the elected members and senior management. Declarations are completed every year and a search is done of the Companies Register for elected members who have shareholdings or are directors.”

PwC comment:
Knowing who your suppliers are and where your money is going is as important as knowing your staff. We have seen significant fraud occurring through the use of “false” suppliers or through suppliers that have a close relationship with an organisation’s employees. A sound preventative measure is to undertake appropriate due diligence checks on any new suppliers.

“All suppliers are checked for conflict of interest in my directorate. Some may have credit checks, but this is not routine.”

“Fraud awareness training is underway with key managers, and a rationalisation of suppliers is underway which will assist any/the reduction in opportunities to defraud or collude with suppliers and specific probity checks are carried on a regular cycle and on key executives or people in certain positions if any resignations of such positions.”

“We are a bit "hit and miss" - sometimes we check new creditor details - sometimes not.”

  Yes No Don’t know Total Count
Chief Executive Officer/Managing Director/Principal 213 56% 115 30% 55 14% 383
Member of the senior executive/leadership team or equivalent 257 52% 119 24% 115 23% 491
Line manager (if not one of the above) 88 40% 46 21% 86 39% 220
Administration/Support Services 81 41% 60 30% 59 30% 200
Operational staff (e.g. Teacher, Analyst, Advisor, Technician, Officer, Engineer, Accountant) 41 30% 26 19% 70 51% 137
Total 680 48% 366 26% 385 27% 1,431
  Yes No Don’t know Total
Central Government              
Autonomous Crown Entities 21 39% 19 35% 14 26% 54
Central Government - Other 20 44% 17 38% 8 18% 45
Crown Agents or Companies  47 54% 14 16% 26 30% 87
Crown Research Institutes 29 76% 3 8% 6 16% 38
District Health Boards 41 59% 8 11% 21 30% 70
Government Departments 68 46% 18 12% 61 41% 147
Independent Crown Entities 12 32% 8 22% 17 46% 37
Māori Trust Boards 8 73% 3 27% 0 0% 11
Rural Education Activities Programmes 3 27% 4 36% 4 36% 11
State-Owned Enterprises 28 60% 6 13% 13 28% 47
Tertiary Education Institutions 51 56% 14 15% 26 29% 91
Sub-Total 328 51% 114 18% 196 31% 638
  Yes No Don’t know Total
Local Government              
Airports 9 47% 5 26% 5 26% 19
Council Controlled Organisations or Council Controlled Trading Organisations 43 57% 15 20% 17 23% 75
Energy Companies 16 57% 6 21% 6 21% 28
Fish and Game Councils 4 50% 3 38% 1 13% 8
Licensing and Community Trusts 5 56% 3 33% 1 11% 9
Local Authorities 68 40% 39 23% 62 37% 169
Local Government - Other  4 36% 7 64% 0 0% 11
Port Companies 0 0% 2 67% 1 33% 3
Sub-Total 149 46% 80 25% 93 29% 322
               
Schools 203 43% 172 37% 96 20% 471
Total 680 48% 366 26% 385 27% 1,431
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