Romania is a bit notorious for financial fraud. Its Prime Minister Victor Ponta is facing money laundering and tax fraud charges, while a recent survey by Ernst & Young found that 39 percent of respondents said they believe bribery and corrupt practices are widespread within local government.
New data from Romanian officials has pointed to the epicenter of many of these corruption cases: government procurement.
According to yesterday’s (Aug. 26) reports in Romania-Insider, the majority of high-level corruption cases in the nation are related to public procurement. The country’s government procurement practices are a $17 million market, according to Marius Bulucea, the advisor to the Chief Prosecutor of the National Anticorruption Directorate, who announced the statistics.
Bulucea said that one of the largest problems in public procurement is the large margin of discretion for government buyers, who can award contracts without clear criteria or reason, according to reports.
Romania is introducing new legislation aimed to curb procurement corruption and introduce more stringent guidelines on public procurement practices; the draft bill was published late last month. Bulucea told the media that the new legislation would end the practice of prioritizing the lowest price, allowing buyers to procure based on other factors, like quality and reputation of the supplier.
Reports added, however, that in addition to corruptive practices leading up to procurement, there remains fraudulent practices after a contract is awarded. Bulucea said that corruption is not as much connected to the attribution process, but can arise during contract signing.
Multiple independent research reports have recently placed Romania at the top of their lists for most fraudulent markets in both the private and public sector. But corruption and unfair practices in government procurement is not a phenomenon isolated to Romania. The adoption of e-invoicing by government procurement programs, for example, is touted as one of the top ways public officials can boost transparency and reduce fraud.
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