Hey — listen up: It could be happening now — under your nose. It’s procurement fraud, a low-profile crime that often exacts a high price.

Fortunately, taking a few steps to protect yourself can keep it in check or eliminate it entirely. One effective defense that experts are recommending highly right now? Making sure your company is up to speed on every aspect of Sarbanes-Oxley. What was once nothing more than a headache (at least for many companies), provides the auditing requirements that could be your best ally in preventing procurement fraud.

Usually, you don’t hear much about procurement fraud. This is because many companies are reluctant to publicize fraud problems and embarrassed to prosecute employee frauds, choosing instead to settle matters behind closed doors. Who wants to admit they left the cash register open?

But as today’s economy sharpens the focus on every penny and every transaction your company makes.

Need further proof this is a growing problem? Some startling facts:

* the average business loses 6% of its business each year to fraud

* all businesses in the U.S. are losing a collective $660 billion a year due to fraud

* two-thirds of frauds are committed by execs and managers, averaging $140,000

* frauds committed by non-managers averages about $62,000, and

* business owners who dip into their own till average about $900,000

You’ll also help yourself by being on watch for the relationships between employees and outside vendors. It usually takes two to tango when pulling off a procurement scheme. They work together to create a variety of pocket-picking schemes, such as phony or padded invoices, goods and services that were billed and paid for — but never delivered or performed; work that isn’t done, or even simply changing the contract to benefit the two parties involved.

Along with enforcing the stringent rules of Sarbanes-Oxley requirements, auditing software also can help frustrate many staffers who might be considering committing fraud. Programs that routinely audit transations pull the rug out from under employees who plan their scams around your company’s regularly scheduled audits.

Tags: procurement, Procurement costs, Procurement fraud