Case Study
FTI Technology Helps Uncover Fraud Within a Global Supplier Network
A global manufacturing firm in the DACH region suspected corruption within its large supplier system, but did not know where to begin an internal investigation. The company’s chief compliance officer engaged FTI Technology to explore whistleblower allegations and investigate the concerns accordingly.
Situation
The company took the suspicions of fraud seriously and prioritised the investigation as part of its commitment to both corporate social responsibility (CSR) and environmental, social and governance (ESG) standards. The initial internal investigation spanned a massive amount of potentially relevant data across the company’s 150,000 suppliers for 61 different subsidiary companies in 44 countries. FTI Technology assembled a team with procurement and analytics expertise to collect extensive data from the client’s SAP systems and analyse it for signs of irregularities in supplier relationships according to predefined criteria.
In addition to investigating distinct signs of fraud among suppliers, the client was also seeking to trial a systematic method for early detection of procurement irregularities to support its global implementation of stronger CSR and ESG controls.
Our Role
To focus the investigation and reduce undue cost and other burdens on the client, FTI Technology narrowed the scope of suppliers to external suppliers only, which still represented a substantial pool of partners, transactions and invoices to examine. Invoices were scrutinised for suspicious keywords and unusual patterns such as significant backdating, creation outside business hours, and posting on weekends. The team also reviewed the activities of suppliers that were conducting business despite their status under purchasing freezes or deletion flags. Using a combination of innovative methods and advanced technology, the investigative team uncovered a wide range of irregularities connected to specific suppliers in multiple countries, including significant backdating, invoices submitted outside of usual business hours, missing bank details, recurring invoices to one-time suppliers and suspicious keywords in invoices.
Through in-depth analysis, the team successfully pinpointed specific problematic suppliers in several countries for follow-up by the company’s internal audit team and targeted on-site investigations.
Our Impact
- FTI Technology’s systematic approach and use of advanced analytical techniques identified a range of potential irregularities across various aspects of the invoicing and supplier management process, which supported the client in pursuing further investigation and potential remedial actions.
- The team has established a strong working relationship with the client, and is supporting the company in ongoing fraud investigations relating to specific suppliers.