Effect of procurement fraud detection and prevention on organizational integrity in public sector organizations in Nigeria

Abstract

This study examines the effect of procurement fraud detection and prevention on organizational integrity within public sector organizations in Nigeria. Specifically, it investigates the impact of document examination, segregation of duties, and whistleblower mechanisms on organizational integrity. Using a survey research design, the study targets 844 chartered accountants with forensic certifications and executive management staff across 10 prominent public sector organizations in Nigeria, all with significant procurement activities. A stratified sampling technique was employed, yielding a sample size of 271 respondents determined by the Taro Yamane formula. Data were collected through a Likert scale questionnaire and analyzed using multi-linear regression to assess the relationship between document examination, segregation of duties, and whistleblower mechanisms (independent variables) and organizational integrity (dependent variable). Findings reveal that all three mechanisms significantly and positively influence organizational integrity, with an overall model fit of R² = 0.83. Document examination exhibited a positive impact (β = 0.30, p < 0.05), highlighting its role in reducing fraud risks through transparency in procurement processes. Segregation of duties showed a strong effect (β = 0.35, p < 0.05), suggesting that delineating responsibilities limits fraud opportunities. Similarly, whistleblower mechanisms (β = 0.31, p < 0.05) were found to foster a safe environment for reporting unethical behavior, thereby enhancing integrity. The study concludes that robust document examination, stringent segregation of duties, and effective whistleblower systems are essential to safeguarding organizational integrity in Nigeria’s public sector. It contributes to knowledge by emphasizing these mechanisms as critical elements in fraud prevention. It recommends that public sector organizations enhance staff training on document examination, strictly enforce role boundaries, and establish anonymous whistleblower channels to encourage ethical practices. These measures could strengthen integrity frameworks, reducing fraud risks and enhancing public trust in Nigerian public institutions.