Public procurement is widely considered to be one of the areas that is most vulnerable to corruption. The factors that affect the vulnerability are not limited to the volume of transactions and the serious financial incentives at stake. They stem from a combination of system weaknesses (complexity of the processes, regulatory incoherence, multitude of stakeholders, close interaction between public officials and businesses), as well as, implementation deficiencies (lack of transparency and ineffective information systems, poor professional capacities, weak oversight and controls).
Inherent integrity risks seem exacerbated in a local government context. The closeness of local government to the community makes it more likely to create CoI, whereas the complexity of relationship often prevents reporting. Additionally, in local markets there is weak competition and fewer suppliers, so particular favoured choices may be more easily justified. Shortages of staff and limited legal expertise, as well as weak capacities to manage complex procurement procedures, may increase integrity risk levels. Direct interaction with potential suppliers is more difficult to avoid at the local level, because of the close community.
Procurements, even the low-value ones, are more easily seen. In the absence of adequate transparency, the likelihood that citizens and businesses shall comment negatively about perceived corruption is higher. Given the above, strong operational controls in local procurement processes are indispensable to effective management.