Supplier Risk
Cession & Third-Party Payment Risk
Reviews contracts paid to a ceded third party rather than the contracted supplier.
Why payments to ceded third parties need close review
A cession redirects a supplier's right to payment to a financier or third party, and while legitimate, it is a recurring vehicle for diverting public funds and obscuring the true beneficiary in fraud investigations by the SIU and AGSA. Payment to anyone other than the contracted supplier must rest on a valid, properly authorised cession. AuditPro Core reviews contracts paid to a ceded party so finance and assurance can confirm the diversion is legitimate and documented.
The Numbers
AuditPro Core renders this view from your tenant's live, tamper-evident records. The figures below are illustrative sample data.
Ceded Contracts
46
Value Ceded
R 71.8m
No Cession Doc
12
R 18.3m
Payee ≠ Supplier
58
Ceded Value by Cessionary Type (R'm)
Cessions Lacking Documentation
| Contract | Supplier | Payee | Value (R'm) |
|---|---|---|---|
| CON-4410 | Vendor 2610 | Third Party A | 6.2 |
| CON-4452 | Vendor 2733 | Third Party B | 4.1 |
| CON-4488 | Vendor 2844 | Related Co | 3 |
| CON-4501 | Vendor 2955 | Unknown | 1.5 |
Figures shown are illustrative sample data for demonstration. AuditPro Core renders these views from your own tenant's live, tamper-evident records.
What a cession does
Through a cession the contracted supplier assigns its right to receive payment to a third party, commonly a bank or invoice financier. The institution then pays the cessionary instead of the supplier.
Authorisation and documentation
A valid cession must be in writing, signed by the supplier, and accepted by the institution before payment is redirected. Paying a third party without that instrument is a control failure and a fraud risk.
Beneficial-owner transparency
Because cession changes who receives the money, it can be misused to route funds to a related or undisclosed party. The cessionary's identity and relationship to the supplier deserve scrutiny.
How AuditPro Core Bridges the Gap
- Cession verification: tests that each third-party payment is backed by a signed, accepted cession instrument.
- Beneficiary linkage: checks the cessionary against directors and banking to detect related-party diversion.
- Exception workflow: holds third-party payments lacking a valid cession for confirmation.
- Audit-ready export: bundles the cession, authorisation and payment for the investigation file.
Key Takeaways
- Pay a third party only on a written, supplier-signed, institution-accepted cession.
- Cession changes the beneficiary, so the cessionary's identity matters.
- Undocumented third-party payments are both a control failure and a fraud flag.
- Screen cessionaries for related-party links to the supplier.
See This on Your Own Data
AuditPro Core renders this dashboard from your tenant's live, tamper-evident records — every figure traceable to source.