How should a procurement manager deal with an employee 'known to be corrupt but not proven yet'?

By offering him to share the business together after reporting that to higher management.

Your own system should be fool proof procurement system with proper procedures, audits and inspections. If evidence of corruption is there, you may initiate action as per company's policy. If mere allegations is there and no evidence, you may have to approach the employee indirectly, invite him outside for dinner, ask him questions about external world and general views about corruption, observe his general behavior, body language, replies to arrive at a conclusion. Further, find about the college background, family background, references through social network to establish moral character about the person

An employee, who is known to be corrupt but not proven yet, can be proved through following manners-

1. Conduct internal audit from time to time and focus on all procurement issues (Specially those which he handles directly)

2. Development good relationship with people those who works with accused person directly and indirectly. 

3. Conduct year end employee assessment very carefully

4. (This is off the track) If you are very confirm that he is involved with corruption than you can invite him to join a business outside of organizational rules and regulations. If he agrees and want to do those sort of activities than you can report it to top management, obviously with logical explanation of yours being with him in those sort of activities.

Hope this will meet your expectations.

Thanks

Thanks for invitation. There are several approaches to detect major corruption,

• Please audit the procurement files- sourcing of suppliers, bidders list, bid evaluation, quality of product delivered and qty. delivered.
• Check the lifestyle of the proc. personnel with his Income tax return( though not very effective)
• Some offices have regulations that all procurement staff shall submit their year end asset statement in the offices with necessary supporting docs.

The above three approaches are somewhat effective to detect major corruption. However, it is noted that most business houses  allocate around 2%  bid value as marketing cost  and a significant amount of this marketing cost ends up in the pocket of relevant procurement staff - which are hard to detect.

So, it is the manager who shall remain  very vigilant and  check the procurement documentation process  very carefully to check corruption or irregularities

the procurement manager should follow if that employee comply with roles and standards that organizing  procurement operations 

As a collective group advise all members that corruption will not be tolerated (this way you are not victimising the member), you could then change the role of the member to remove the connection. Place controlling measures in place to monitor the dealings.

Não se pode agir com base em suposições. Confiar é a forma mais contundente de responsabilizar. O acordo deve incidir no cumprimento das partes, em cada função.