ALRAQABA . ISSUE 15
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Overview of the cases: How are they similar?
1. Issue arises: In SAB and GAO, issues were identified through audits. The GAO
identified the issue in the course of a special report (congressional request)
whereas SAB identified the issue in work for its annual report.
2. Agency response: Agencies in both SAB and GAO took little or no action
regarding the issue.
3. SAB and GAO action: The GAO took a further step of including this issue in its
“High Risk List.” GAO identifies a limited number of issues for the list that are
at higher risk for fraud, waste, and abuse. This list brings more attention from
the congress and the agency to address these issues. Compared to the GAO,
SAB received a special request from the national assembly to perform a special
report for further investigation on the issue; however, it was not classified as an
area with a greater risk of fraud, waste, and abuse.
Case study from Kuwait
Diesel seen as fuel for easy fraud: A case study about smugglers of petroleum product
“Diesel” in the State of Kuwait
This case study focuses on the “diesel” product distributed by Kuwait National Petroleum
Company (KNPC), a subsidiary of KPC. KNPC’s operations focus on the downstream sector and
is Kuwait’s only refining company. KNPC provides the local market with all fuel needs, including
Gasoline, Diesel, Kerosene and Gas. These and other products are also catered towards the
international markets.
Key factors: Why is Diesel a fuel for easy fraud in Kuwait?
Diesel in Kuwait has been seen lately as fuel for easy fraud. Customs controllers have been
clamping down on smugglers of petroleum products using jerry cans through the sea and other
illegal routes since 2012. Annual reports since 2012 included many observations related to diesel
fraud due to the lack of internal controls. This case study will explain more about Diesel fraud and
the approach the State Audit Bureau used in its audits, which became available to the public on the
State Audits Bureau’s website in 2017.
Out of all of the products that KNPC provides the market, why is Diesel a fuel for easy fraud in
Kuwait and attractive to smugglers of petroleum products? The answer to this question is not easy
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