"Construction projects and contractors must have systems in place to prevent theft and fraud"
In this day and age of theft and fraud it’s important to have sufficient checks and controls in the operating systems to pick up and, more importantly, to deter fraud in construction.
These checks should include ensuring that:
1. the item has been received and complies with the quality requirements and the specifications (When construction equipment arrives on your project check these things.)
2. the work has been carried out in accordance with the order including supplying all quality documentation, spares, and warranties and completing all commissioning
3. the value invoiced does not exceed the value on the order
4. deductions have been taken into account
5. the agreed discounts have been taken
6. retention is withheld where applicable
7. the correct amount of tax is added
8. the invoice hasn’t been previously paid
9. there aren’t any arithmetic errors
To facilitate some of the above it may be necessary for the appropriate people, who have the required knowledge, to check and confirm the item has been received and complies with the requirements of the order.
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"Good documentation is essential"
It’s also essential that the payment process is clear, so that it’s possible to follow what the payment is for, and what deductions have been made and why they were made. If it’s not clear it’s possible that when future payments are made the supplier receives more money than is due, or deductions are accidently reversed.
To enable this checking process it’s important to tie-up the order, invoice, delivery, batch and payment numbers. Equally important is to ensure documents are filed and stored in the correct place and sequence and are readily available for several years should disputes arise with suppliers later.
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Fraud and theft in construction
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The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.
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