Financial Risk from the Global COVID-19 Pandemic

financial risk

Here, we discover what we need to know about addressing the increased financial risk from the global COVID-19 pandemic, starting with the background and challenges faced

As a result of the COVID-19 pandemic, organisations have had to rapidly implement changes to their normal invoice processing/payments to suppliers.

Common challenges have included working from home and in some instances working from home whilst home-schooling, poor internet connection, issues with invoice scanning and resource issues due to sickness and furlough.

COVID-19 created a unique situation that required the UK Public Sector to rapidly source goods and services, sometimes in high volumes and from previously unused suppliers. Additional pressures were also brought about by unfamiliar home working restrictions and in many cases, there was a requirement across the Public Sector to support financially struggling supply chains.

In particular, at the beginning of the pandemic, there was huge urgency to procure goods and services i.e. PPE to protect staff. This expenditure was obviously never subject to normal budgetary controls and as a result, represented an increased risk of overpayments and fraud occurring.

Along with the race to procure urgent supplies often came the need for payment upfront, predominantly via credit cards or in the form of pro forma invoices, both creating additional financial control challenges.

Impact and pressure on resources

Every organisation will be different in how the pandemic has impacted them financially.  The challenge is to identify any issues suffered and to quantify the impact of those issues.

All organisations without doubt are going to be under significant resource pressure both now and for some time to come. The use of resources, both internal and external, to identify and address these issues must, therefore, be appropriate and effective.

Crown Commercial Service solution

Due to the increased risk of fraud and error during the COVID-19 pandemic period, Crown Commercial Service established a variation to the existing Spend Analysis and Recovery Services Framework (RM3820). This variation provides a mechanism for organisations to procure an audit of their invoices and transactions (COVID-19 related spend) to identify instances of suspected fraudulent activity or erroneous payments to suppliers.

Benefits to organisations from the variation to the Framework are expected to be:

  • A shorter procurement process and legally compliant route to market through the framework agreement.
  • A cap to potential supplier costs, due to the limited duration of the COVID-19 review.
  • A professional review of COVID-19 invoices and transactions from audit professionals to identify potentially fraudulent activity.

As an approved Supplier on the Framework, Twice2much have established a ‘10 day COVID-19 Health Check’ to help organisations address the increased financial risks arising during the pandemic.

 

Please note: This is a commercial profile

© 2019. This work is licensed under a CC BY 4.0 license

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