Frauds in the Construction Industry

| Author: Roy Herridge [Member (F/1744)] | Filed under: Case Studies
Frauds in the Construction Industry

Recently my company operatives have been engaged with a number of frauds that have been committed within the construction industry.

The frauds have been complicated and well planned to obtain large amounts of money by many deceptions relating to work practices within the construction and building companies. Uniquely we have used the services of a quantity surveyor, a site manager and accountant working in our company with vast knowledge of various procedures whereby the frauds had been committed. These members aided and assisted our investigators to unravel a number of serious offences.

In some cases the frauds could have been discovered earlier by better supervision of employees. However with our investigation and response to the matters, loopholes have been closed and matters resolved to the satisfaction of our clients.

Prevention is necessary and we have found that our expertise can aid and assist companies to prevent serious frauds being committed. We work with experts to resolve and prevent these serious matters, including security surveyors who give lectures regarding crime prevention and security surveys to prevent burglary to building sites.

My company was commissioned by a large building contractor to scrutinise the commercial and contractual management of various building projects that were being undertaken. We were further instructed to undertake a comprehensive examination of the commercial and contractual functions of these particular projects to determine the cause of substantial losses. The examination was not limited to the actual source of how the losses originated, but also to see if the reporting procedures in place were suitable for the type of construction projects.

The investigation involved seeking out any abnormalities in the normal process of tendering, procurement of subcontractors, management of subcontractor’s accounts and also checking of subcontractor’s performance on site. We examined the quality of supervision at site management level, the bidding process, the cost management and sign off procedures.

Suspicious activity was uncovered by our operatives; this being highly sensitive to the company in question. We were able to make suitable recommendations ensuring that the correct procedures for production and commercial procedures would take place and be monitored on a regular basis. We also advised on future systems to prevent the reoccurrence of losses.

Article submitted by Full Member (F1744) Roy Herridge QPM of Surelock Global Investigators & Security Consultants. Website: surelock.org Email: roy@surelock.org 

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