Mining procurement involves high-value contracts, urgent operational needs and complex supply chains. These conditions can create opportunities for fraud and irregularities.
Procurement risks include emergency procurement abuse, inflated pricing, split orders, manipulated specifications, supplier collusion, conflicts of interest and poor verification of delivery.
In mining environments, procurement concerns can also affect safety, production continuity and regulatory exposure. A weak supplier can create operational as well as financial risk.
Investigators should review the full procurement lifecycle, including supplier onboarding, quotations, approvals, contracts, delivery evidence, invoice processing and payment records.
Data analysis can identify patterns such as repeated awards, unusual pricing, excessive use of single-source procurement and payment anomalies.
Interviews and site verification may be required to test whether goods or services were actually delivered as invoiced.
Procurement risk management requires due diligence, monitoring, segregation of duties, evidence of delivery and independent review of high-risk transactions.
Author: Adrian van Straaten, CFE | IAFCI