Research proposal sample

IMPACT OF INFORMATION AND COMMUNICATION TECHNOLOGY ADOPTION ON PREVENTION OF PROCUREMENT FRAUD

A CASE STUDY OF NSSF, HEAD QUARTERS, KAMPALA

CHAPTER ONE

1.0 INTRODUCTION

This chapter covers the background of the study, Statement of the problem, purpose of the study, research objectives, research questions and scope of the study, significance of the study and definition of key terms.

1.1 Background

According to Chaffey (2007) Information and communication technology involves the use of computers and telecommunication especially internet to send and receive information. Globally information and communication technology is of utmost importance, the total money spent on IT worldwide has been most recently estimated as US $3.5 trillion, and is currently growing at 5% p.a. doubling every 15 years, IT costs, as a percentage of corporate revenue, have grown 50% since 2002, Weele, etal (2010).Information and communication technology plays a valuable role throughout the Fraud Management Lifecycle. There is not a stage in the Fraud Management Lifecycle that does not benefit from the effective application of information technology resources or suffer from inefficient or inflexible systems, processes, or staff. Information technology resources are frequently the key to the success or failure of the activities in the individual fraud stages and at times to the success or failure of the entire Fraud Management Department (Ernst and Young, 2000), Information and communication technology (ICT) is defined as a process of automatic acquisition, storage, manipulation, movement, control, display, switching, interchange, transaction or reception of data or information Lysons (2000).

According to transparency international (2006) unethical code of conduct including corruption, embezzlement, and fraud is high in developing countries and countries in east and west Africa have one of the highest levels of corruption and fraud in the world, though countries like Singapore and china also experienced high levels of fraud especially in early nineties in procurement Singapore in particular has reduced significantly and is arguably one of the least corrupt in the world this is mainly attributed to the harsh punishment given to the culprits in Singapore and above all the government commitment in fighting the vice and likewise china’s score in fraud has reduced significantly over the past decades. According to the Association of Certified Fraud Examiners (2009) procurement fraud is done through falsification of documents, non-delivery of services that are paid for, inflation of procurement prices and presentation of personal procurement expenses as business expenses. The association notes that procedures, rules and regulations are ignored and that some procurement officers double in initiating procurement and supplier selection as well as initiating procurement vouchers, all of which are acts that perpetuate fraud, Suppliers have business links with company employees and yet others use their relatives to supply goods and services at inflated prices.

1.2 Statement of the problem

NSSF is a national savings scheme mandated by the Government of Uganda through the NSSF Fund Act, cap 222 to provide social services to employees in Uganda, Established by an act of parliament in 1985 (NSSF Records 2010), NSSF uses E-procurement for contracts to achieve benefits such as increased efficiency, cost savings, improved transparency in procurement services. Despite this benefits, It is faced with numerous procurement challenges and in the 2008 acquisition of 564 acre piece of land at 11 billion shillings NSSF was accused of procurement fraud due to failure to advertise procurement of that value, (New Vision 27 October 2008), Apart from that, the PPDA audit report 2012 also questions a number of procurement activities at NSSF including the contract for the supply of fumigation services in which it was marred by irregularities. All these irregularities happen despite the existence of ICT systems at NSSF, It is against this background that the researcher is examining whether adoption of Information and Communication Technology (ICT) has an impact on minimizing procurement fraud that have been reported in the past.

1.3 Purpose of the study

The purpose of study is to establish the impact of Information and Communication Technology adoption on prevention of procurement fraud.

1.4 Specific objectives of the study

The study will be guided by the following objectives:

To assess the effects of ICT systems adoption on prevention of procurement fraud.
To identify various ICT systems installed to detect such procurement fraud at NSSF.

To establish the challenges of adopting ICT system to prevent procurement fraud.

1.5 Research questions

The following research questions will guide the development of this study:

What are the effects of ICT systems adoption on prevention of procurement fraud?
What are the various ICT systems installed to detect such procurement fraud at NSSF?

What are the challenges of adopting ICT system to prevent procurement fraud?

1.6 Scope of the study

The study scope will cover the following aspects;

1.6.1 Content scope

The content scope will cover the following aspects: assess the effects of ICT systems adoption on prevention of procurement fraud, to identify various ICT systems installed to detect such procurement fraud at NSSF and to establish the challenges of adopting ICT system to prevent procurement fraud.

1.6.2 Geographical scope

The study will be conducted at NSSF headquarters located at plot 95 Kampala road.

1.6.3 Time scope

The period of investigation will be from February to August 2017.

1.7 Significance of the study

The study findings may help the procurement department of NSSF in knowing the benefits of ICT on reduction of procurement irregularities.

According to the Transparency International 2006 Uganda is one of the most corrupt countries in the world and the research findings may therefore help the government in knowing the causes of procurement fraud and make relevant laws to curb the vice.

This research finding may benefit future researchers in enriching their knowledge on the various ICT systems used to reduce procurement fraud /irregularities in an organization hence helping them choose on the pool the best system to use.

1.8 Definitions of key terms

Information and Communication Technology

Information and communication technology is defined as automatic acquisition, storage, manipulation, movement, control, display, switching, interchange, transaction or reception of data or information. Lysons (2003).

The term ICT is now also used to refer to the convergence of audio-visual and telephone networks with computer networks through a single cabling or link system, There are large economic incentives (huge cost savings due to elimination of the telephone network) to merge the audio-visual, building management and telephone network with the computer network system using a single unified system of cabling, signal distribution and management, William Melody etal, (1986).

Fraud

Fraud is the crime of gaining money or financial benefits by a trick or by lying, oxford dictionary (1999). Fraud is a purposeful deception, misrepresentation, or concealment of facts intended to cause injury or loss to another party, typically for the sake of one own direct or indirect gain. Norman Katz (1996),

Procurement

Procurement is the acquisition of goods, services or works from an outside external source. It is favourable that the goods, services or works are appropriate and that they are procured at the best possible cost to meet the needs of the purchaser in terms of quality and quantity, time, and location. Corporations and public bodies often define processes intended to promote fair and open competition for their business while minimizing exposure to fraud and collusion.

Weele et al, (2010). Procurement simply means acquisition by purchase, rental, lease, hire purchase, license, tenure, franchise, or any other, contractual means, of any type of works, service, or supplies or any combination PPDA ACT 2003.

Procurement is a function for obtaining by purchase, lease or other Legal means equipment’s, materials, supplies and services required by an undertaking for use in production. (Lysons, 2000).

Procurement Irregularities.

This is where procurement process is marred by mistakes i.e. Violation of procurement procedures, the use of high –ranking officials to influence procurement decision making and bribery-induced violations of procurement procedures by the government officials in collaboration with providers.(Basheka 2009)

This involves the behaviour of the officials in the public or private sectors to improperly or unlawfully enrich themselves and or those close to them to induce others to do so by misusing the position for which they are placed. (Asian Development Bank, 2003).

Procurement fraud

According to National fraud authority (2011), procurement fraud is a deliberate deception intended to influence any stage of the procure-to-pay lifecycle in order to make a financial gain or cause a loss. It can be perpetrated by contractors or sub-contractors external to the organization, as well as staff within the organization.

Procurement Fraud is a practice which includes the offering, giving, receiving, or soliciting of anything of value to influence the action of a public official in the procurement or disposal process or in contract execution. (The Public Procurement and Disposal of Public Assets Act 2003).