Contract and procurement fraud
Labour mischarges can be detected by engaging in the following activities
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| Labour mischarges can be detected by engaging in the following activities:
Examine labour cost records for the presence of red flags. Review audit reports, reimbursement requests, construction reports, engineering reports, and so on. Conduct site visits to verify that selected employees’ labour costs are being properly charged to the work actually being performed. Examine time cards and total the hours expended on the contract, comparing them to the hours billed. Note, in particular, repeated instances or a pattern of labour charges that increase the cost of cost-plus contracts. Review journal entries used to transfer labour costs. Compare labour costs over a specific period to identify any unusual changes and determine the reason for the changes. Review the standard and actual labour rates to determine if there are any significant differences between the two. Calculate the percentage of total direct labour charged to each contract to determine which had the highest percentage of direct labour charges. Review and compare the labour distribution summaries with payroll records to determine whether the total labour distributions agree with the total labour charges. Compare the direct and indirect labour account totals from the prior year to the current year and note the percentage change. Determine the percentage of total direct labour charged to each contract/work order to reveal which charge numbers had the highest percentage of direct labour charges. Analyse the labour charges to determine if there were any shifts in charging patterns. Prepare a schedule of salary or wage changes and compare it to contract award dates and labour rates. Look for terminated employees who are charged to contracts. Compare employee personnel records to contract position qualification requirements. Interview individuals who changed their charging patterns during the year. Search and review external records (e.g., court records, prior complaints, audit reports, investigative reports, media sources, etc.) to find any history of misconduct. Download 0.62 Mb. Share with your friends:
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