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27 November 2012 at 16:32 - Posted by FightAgainstCrime

SA has highest fraud on the continent, KPMG Africa report finds - SANEWS


THE latest KPMG Africa Fraud Barometer shows South Africa still has the highest number of reported cases of fraud on the continent, and government employees are the biggest culprits.

The survey, which reviewed perceptions of fraud and corruption in sub-Saharan Anglophone Africa, found SA had a 33% prevalence of fraud and misrepresentation in the six months to June, compared with 37% for all the countries in the same period.

SA had a 13% prevalence of misappropriation and theft (Africa: 17%), and 8% of counterfeiting and forgery (14%). The only area in which SA fared comparatively poorly was in the bribery and corruption category, where SA recorded 12% compared with 8%.class=mceWPmore

However, the overall number of frauds reported on the continent dropped by 17 cases to 503 cases, with an estimated loss of over $2-billion. This decreased by $1.3-billion from the previous six months.

Petrus Marais, KPMG's global leader of forensics, said the government had the highest reported cases of fraud, followed by the professional and business services, retail banking, and infrastructure sectors.

"The sectoral split across frauds committed in SA is very similar to that across the rest of the continent," said Marais.

The prevalence of fraud in government prompted KPMG to add government officials as a new perpetrator category.

"Government employees defraud the government by failing to disclose conflicts of interest having undisclosed financial interests in service providers, raising false or ghost employees, paying fictitious service providers, overpaying to colluding service providers, and any one of a number of other ways," said Marais.

The Auditor-General's latest general report on the national audit outcomes shows 46% of audited national government departments had awarded tenders or contracts to state officials or their family members, while 12% of public entities did so.

The number of officials who did not declare their interests reached 63% at the departments, while public entities recorded 53%. Of these, 13% and 12% were involved in adjudicating and awarding tenders or contracts.

But Marais does not believe the rot is confined to the public sector.

"The manner in which [government employees] defraud their employer is in reality not very different from the way in which any other employee defrauds its employer."

As the survey only polled English-speaking countries, the numbers are almost certainly much higher.

"In our view, this is a relatively small percentage of the fraud and corruption that has occurred."

* This article was first published in Sunday Times: Business Times  STORY

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