Reduction of White-collar criminality by means of new concept of tender organizing and management – part 1
In order to understand the specific features of white-collar criminality in public and in private sector of economics we decided to survey ethics tenders in Israel. By means of our criminological interview, we have identified two main focuses of corruption in Israel: local authorities; the matter of tenders. In local authorities there is an infiltration of criminals which is indicated in awarding of benefits, promises of positions, promotion of interests and similar acts. We have demonstrated that tender coordination is considered to be the most favorable ground for white-collar criminality in Israel. There are represented the results of our original questionnaire concerning the transparency process of tender’s organizing and management in the public sector. In general, by means of our research 25 public organizations have been inspected, such as: hospitals, defense industry (6,000 employees), banks, marketing companies, municipality, industrial factories, Israeli Broadcasting Authority and more. At the same time, 4 organizations refused to complete the questionnaire. We appreciate this circumstance as exceptionally relevant for our research. More than it, in the private sector, 4 organizations completed the questionnaire as a pilot study. Their findings are considered to be of the tremendous significance. Our findings are self-evident for tender organizers in a public organization; there have been found that a diminished importance is allocated by the organization to the following parameters: 1) supervision and monitoring, as well as of direction and guidance; 2) insurance of the property control and of the risk management in the process of tender organization.
More than it, we have detected that the majority of organizations in public and private sector suffer of the same problems, such as: non-identification and not hedging risks that characterize the operation of the company; lack of ability of management to identify the development of new risks; lack of discussions of risks; lack of quality of the control; failure to check embezzlement and fraud risks in the organization. In our opinion, those are the reasons of white-collar criminality perpetrating in the realm of organizations. We believe that in order to avoid such problems in future, organizations should develop formal Audit Policies as a way to create the conditions necessary for effective management of internal auditor. These policies should provide standard guidelines. Internal auditors, those individuals who call attention to possible wrongdoings within their organizations, are the subjects of much controversy. Internal auditor does call attention to genuine abuses of power by decision-makers in business and government. They do often suffer retaliation for their ethical resistance.
Indeed, many organizations are showing concerned to their internal auditors in order to give guidance and ad-vice at different levels of management. This is because, the internal audit plays an important role in the organizational process, and therefore it is not only required to perform ordinary assurance activities, but also to serve as a strategic partner of the organization and add value to its activities towards improving organizational processes and ensuring their effectiveness and efficiency. The procedure of internal audit is a vital procedure of the audited entity and must be performed as it is while attention and self-rigorousness, exposure without compromise and objective coping. Therefore, organizations with effective and efficient internal audit function are more than those that have not such a function to detect fraud within their organizations. The effectiveness of internal audit is very important issues especially when it comes to decision-making, for example: If management believes that internal audit functions are ineffective, then their recommendations will carry little value from the side of decision makers.
In the process of tender managing in corporations which have been submitted to a survey, there have been found the following standpoints: the following parameters are conducted at a level of 52-57%: internal monitoring system in an organization – 52%; formulation of values, policy and clear procedures – 55%; formulation of compliance code – 57%; the following issues are performed at a level of 37-38%: supervision and monitoring – 37%; direction and guidance – 38%. the following issues are conducted at a level of 16-27%: overall recognition of risks – 16%; propriety control – 18%; human resources – 23%; internal and external communication – 27%. As a result, we decided to perform several significant steps in the sphere of white-collar criminality reduction. In such a manner, we consider that one of the most efficient ways to reduce white-collar criminality in organizations both in public and in private sector is improvement of the modern tender obligation legislation. In our opinion, it is a leading factor in preventing and counteracting of the phenomenon of white-collar criminality in the State of Israel and in general.
יעקב רוב
חוקר
Scientist
