Contract and procurement fraud
RED FLAGS OF NON-CONFORMING GOODS OR SERVICES SCHEMES
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- DETECTING NON-CONFORMING GOODS OR SERVICES SCHEMES
| RED FLAGS OF NON-CONFORMING GOODS OR SERVICES SCHEMES
The following is a list of potential red flags for non-conforming schemes: High percentage of returns for noncompliance with specifications Product compliance certificate missing or appears altered or modified Compliance certificates signed by low-level employee with no quality assurance Responsibilities Materials testing done by supplier, using his own personnel and facilities Evidence that test or inspection results were falsified (e.g., documents appear altered or modified, test documents are illegible, signatures on documents are illegible, documents were signed by unqualified or inappropriate personnel, test reports are similar or identical to sample descriptions and test results, and so on) Highest profit product lines have the highest number of material return authorisations or reshipments Discrepancy between product’s description or normal appearance and actual appearance (e.g., a new product appears to be used) Used, surplus, or reworked parts are delivered Delivery of products that appear counterfeit (e.g., product packaging, appearance, and description do not appear genuine, items that are consistently defaced in the same area, items that appear different from each other, and so on) Offers by contractors to select the sample and prepare it for testing Delivery of look-alike goods Unusually high number of early replacements Contractor restricts or avoids inspections of goods or services upon delivery DETECTING NON-CONFORMING GOODS OR SERVICES SCHEMES To detect non-conforming schemes, the fraud examiner should, at a minimum, examine the following documents for red flags: Contract or purchase order specifications Contractor’s statements, claims, invoices, and supporting documents Received product Test and inspection results for the relevant period, searching for discrepancies between tests and inspection results and contract specifications Download 0.62 Mb. Share with your friends:
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