The Toner Trap: A Cautionary Tale of Procurement Peril

The infamous ink cartridge scams that plagued Australian businesses and government occurred more than a decade ago, but could something similar happen again?

What happened?

In 2008, the Western Australian Corruption and Crime Commission (CCC) commenced an investigation into the alleged improper purchase of toner cartridges and improper receipt of gifts by public officers in that state.  Over the next several years, allegations spread to Victoria and South Australia.

Put simply, some Australian registered companies had targeted public sector agencies selling poor quality printer toner cartridges at exorbitant prices.  How did they succeed?  Investigations in three jurisdictions found aggressive sales tactics, misleading information about supplier arrangements, the targeting of junior public officers, and the offer of free gifts, were all used by the companies to sell their products.

The scheme costs taxpayers hundreds of thousands of dollars in waste and exposed significant weaknesses in procurement processes, training and oversight.

Examples

In Victoria, one procurement officer procured enough black toner for 40 years, despite the toner having a two-year shelf life and the printer manufacturer offering black toner for free as part of the service contract. In exchange, the procurement officer received more than $8,000 in gift cards.

In South Australia, a public officer received four iPads for purchasing 216 toner cartridges over a 6 month period.  That public officer was subsequently charged and convicted.  Shared Services SA found around 500 invoices totalling nearly $1Million from companies suspected to be involved in the scheme.

In Western Australia, the CCC estimated the scheme cost taxpayers an additional $415,000 over a three year period.

How did it happen?

Procurement is an inevitable and essential part of governmental process.  But it is also recognised to be a high corruption risk activity.

Strong procurement policies and procedures are essential, but that is only half of the story.  Without proper training and buy-in by those tasked with procurement activities, gold standard policies and procedures are ineffective.

Be proactive!

How does your organisation stack up?  Are your policies and procedures up to date?  Is training and oversight a key pillar of your organisation’s procurement integrity framework.  

At LIFT Strategic, we can help.  With a background as leaders in anti-corruption agencies, we are well equipped to work with you to develop your organisation’s corruption resilience.

Give us a call to discuss your organisation’s needs.