FSS was engaged to perform a vulnerability assessment of a large construction company’s accounts payable and payroll.
FSS investigators developed an understanding of the systems and procedures of the construction projects at issue to provide a basis for the identification of fraud exposures and the evaluation of fraud symptoms. FSS investigators used advanced data analytics to analyze transactional data to identify patterns indicative of fraud, waste, and abuse.
Numerous patterns and specific weaknesses were identified that could foster the opportunity, if not corrected to allow a fraud to occur and, perhaps, go undetected.
Patterns and weaknesses identified:
- Consecutive invoice numbers from the same vendor on the same date
- Duplicate invoice numbers from the same vendor
- Large round dollar invoices on weekends and holidays
- Vendor invoices were paid multiple times resulting in account credits for the company issued on future invoices
- Incomplete vendor information; the absence of key vendor information may indicate a fraudulent billing scheme involving fictitious companies
- Employees were reimbursed for expenses while receiving per diem
- Multiple identification numbers for employees and vendors
Based on our evaluation of the fraud symptoms and the totality of the circumstances, recommendations to correct the weaknesses were provided and no further investigation was conducted.