auditing it procurement fraud schemes - philippines chapter
TRANSCRIPT
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AUDITING IT PROCUREMENT FRAUD
SCHEMES
MARIO B. DEMARILLAS
PRESIDENT – ISACA MANILA CHAPTER
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IT SPENDING STATISTICS
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PHILIPPINES IT SPENDING
• 2015 – $7.30B
• 2016 - $7.88B
• 2017 - $8.52B
• 2018 - $9.20B
• 2019 - $9.93B
• 2020 – $10.73B
Php 6.8B
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DEBUNKING MYTHS AND BELIEFS
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MYTHS & BELIEFS
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MYTHS & BELIEFS
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OPPOSING FORCES
FRAUDWILLINGNESS TO
UNCOVERABILITY TO CONCEAL
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COMMON FRAUD SCHEMES IN THE
PROCUREMENT PROCESS
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Pre-Solicitation Phase
Pre-solicitation phase
Need recognition Bid tailoring
Narrow specifications
Broad specifications
Vague specification
Bid splitting Unjustified method of procurement
Change order abuse
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Solicitation Phase
Solicitation phase
Bid manipulation Leaking bid dataCollusion among
contractors
Complementary bids / Bid rotation / Bid
suppression / Market division
Defective pricing schemes
Inflating labour costs
Inflating material costs
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Bid Award and Evaluation Phase
Bid evaluation and award phase
Bid manipulation Leaking bid data
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Post-Award & Administration Phase
Post-award and administration phase
Non-conforming
goods/services
Change order abuse
Cost mischarging
Accounting mischarges Material mischarge Labor mischarges
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RISKY BUSINESS OF FRAUD
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• Monitor – 24 inch LCD, 1080p
• Sixth Intel Generation Core
• Graphics –Nvidia GTX 950
• Microsoft Office
• RAM – 16GB
• Hard Drive – 256 GB
• Optical Mouse and Keyboard
Miss Universe – Q&A
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• Monitor – 24 inch LCD, 1080p
• Sixth Intel Generation Core I5
• Graphics –Nvidia GTX 950
• Microsoft Office 2016
• RAM – 16GB
• Operating System – Windows 10
• Hard Drive – 256 GB SSD
• Optical Mouse and Keyboard
SwitchBoarding
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• Purchased 200 laptops
• Purchase Price – less 5% discount
• 30 days delivery lead time
• 3 years warranty
• Same supplier for 10 years
Harry Potter’s Invisibility Cloak
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• Purchase 150 laptops – P480K
• Delivery – 30 days
• Vendor – Company X
• Purchase 130 laptops – P480K
• Delivery – 5 days
• Vendor – Company X
Siamese Twins
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Snail Mail Internet
Bandwidth
Traffic
Employee
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License to Kill
USER CALs
DEVICE CALs
MS SQL VERSION???
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Substituted Filing
• Project Manager
• System/Business Analyst
• Team Leader
• Programmer
• Designer
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• Monitor – 24 inch LCD, 1080p
• Sixth Intel Generation Core I5 (I7)
• Graphics –Nvidia GTX 950
• Windows 7 Ultimate (Win 8)
• Microsoft Office
• RAM – 16GB (32GB)
• Hard Drive SATA – 256 GB (SSD)
• Optical Mouse and Keyboard
Change is Constant
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Regulatory Compliance
Enterprise and
Operational Risk
Audit Management
IT & Security Risk
ERM is key to Sustainability
• Audit
Management
• Enterprise and
Operational Risk
• Regulatory
Compliance
• IT & Security Risk
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• Company 1 (P 50M)
• Company 2 (P 55M)
• Company 3 (P 60M)
• Company 4 (P 52M)
• Company 5 (P 63M)
FFTW
Technical Specs Revised Price
P 50M
P 55M
P 49M
P 48M
P 68M
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SEEING THROUGH THE LENS
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SELF COLLEAGUES
CULTUREPROCESS
AWARENESS
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DETERRENCE IS KEY
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LEARN TO STUDY PATTERNS
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SUBSTANTIATE MORE
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QUESTIONS???
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