February 2015
Intermediate to advanced
408 pages
13h 14m
English
Content preview from Total Facility Management, 4th Edition
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Appendix B
Prevention of fraud and irregularity
Definitions
Fraud might be defined as the use of deception with the intention of obtaining an advantage. Corruption is the giving or receiving of money, goods or services for favours provided. The risks of fraud and corruption can be reduced by awareness of their nature and good procurement practice. Fraud should be deterred. Prevention is always preferable to detection and strong preventive controls should therefore be applied.
Risks
Facility services have long been considered to carry a high risk of fraud, corruption and other irregularity. The frauds can take a number of forms, some involving collusion with the organization’s personnel or agents.
One fraud risk is the ringing of contracts, whereby a group of service providers conspires to form a ring for submitting tenders – ostensibly in competition but, in fact, having arranged amongst themselves which firm will bid the lowest. Even the lowest tender will be overpriced. The aim of the ring will be to win the majority of the contracts available and share them.
Frauds can be perpetrated in the execution or pricing of work for new contracts. This can take a variety of forms, from failure to perform to specification, to deliberate falsification of suppliers’ invoices or timesheets leading to overpayment for services. Maintenance contracts also provide opportunities for a service provider to claim for more work than has been done, with or without collusion.
The pricing ...
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