Scarcity of resources and weak internal control mechanisms are making the domestic public sector organisations more vulnerable to risks posed by fraudulent activities, according to a Grant Thornton survey. Nearly 64 per cent of the respondents of the survey carried out by Grant Thornton believe PSUs are more vulnerable to fraudulent practices and corruption than their private sector peers. According to the report, PSUs have witnessed a rise in fraudulent incidences in the past few years. “Weakness in related to internal controls, scarcity of resources at disposal and senior management override are among the major reasons for the increased vulnerability of PSUs to fraud risks,” it said. The survey revealed that quantum of cases of corruption and fraud is believed to be higher in real estate and infrastructure sectors with 52 per cent respondents opining that these sectors are more prone to corruption. “Over the past few years, a number of fraudulent incidents have been unearthed in the domestic real estate and infrastructure sector. Its heterogeneous nature and lack of robust internal controls make the real estate sector more vulnerable to frauds,” the report said. Besides, the sector also experiences a risk of revenue leakage at various levels, owing to rising cost pressures on contractors and developers.
