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This situation occurs at all levels of government.
In defense of the system, I must submit that it presupposes that government employees are reputable persons with integrity. Unfortunately, that is not always the case as is clearly depicted in this article.
No system is foolproof and although there are many safeguards, every possible contingency cannot be guarded. If a person is of low character without integrity, loopholes in the system will be found and abused. Include mismanagement by supervisory staff, the safeguards will become ineffective.