Data Analytics of Procurement Fraud Risks in Indonesia

Abstract

The era of digital transformation requires management and auditors to apply data analytics. This era also increases the risk of procurement fraud. This study aims to determine the application of data analytics in handling the risk of procurement fraud in the 4.0 era. Quantitative methods are applied with data analytics techniques to 2018 provincial tender data. The results show that descriptive statistical techniques can reveal the profile of collusion risk attributes. The average provincial construction tender in 2018 indicates a risk of collusion above 50% for the high price attribute. The visualization technique produces a tender collusion risk dashboard. There are 3 provincial LPSEs detected to meet the combined risk indications of collusion. The level of likelihood of collusion risk in the 3 provinces also shows “almost certain to occur” or with a value of 5. The results of this study have implications for data analytics which are very important to be immediately applied in government procurement to manage the risk of procurement fraud.

Analysis of E-Procurement Implementation to Prevent Fraud in The Procurement of Goods And Services at The Procurement Bereau of The Regional Secretariat of East Nusa Tenggara Province

“…The execution of government procurement through e-procurement still carries certain risks. Eprocurement entails risks that can lead to fraudulent practices in the procurement of goods and services processes, these risks include conspiracies between e-tendering and e-selection providers, conflicts of interest involving Procurement Selection Teams/Procurement Implementation Units (PPK)/Procurement Contracting Officials (KPA)/Procurement Committees (PA) who have personal interests in one or several candidate providers participating in e-tendering, theft or leakage of detailed Owner Estimate (EO) data for the benefit of potential providers/participants in the selection process, misuse of user IDs in e-procurement, manipulation of e-tendering winner data, unauthorized access to e-procurement information, cybercrime, hijacking, and hacking of e-procurement systems [12].…”

“…Moreover, e-procurement carries inherent risks that may open opportunities for fraudulent activities, potentially leading to corruption. These risks include collusion among etendering suppliers, conflicts of interest between procurement implementers and e-tendering suppliers, misuse, and manipulation of data within the system, as well as cybercrimes that pose a threat to the e-procurement system [12].…”