Compliance  Services

It'd be fantastic if people were completely honest and things like fraud, deception, and impropriety didn't exist. Unfortunately, this is the real world and not everyone plays nice or lives life above board. And because of this it is sometimes necessary to seek outside investigative services.

A competent private investigative agency, FACT Financial Investigations LLC can uncover information, build evidence, and provide necessary documentation to help you with a range of scenarios. And as a full-service detective firm we are well versed in handling domestic investigations, criminal cases, and straight forward surveillance.

All companies have contracts with third party vendors.  A contract compliance management program is a key success factor for any company to minimize financial as well as reputational losses.  Our contract compliance professionals identify overbillings and recoveries and can assist you with the collection of the overbillings from your vendors as well as assure that key contract provisions are being met. 

Vendor & Construction Audits

Our  Vendor and Construction internal audit professionals analyze third-party contracts you use to manage your business activities (construction, labor providers, service providers, leases, volume purchasing agreements, etc.). We assist you in prioritizing key contract risk areas by performing a detailed review of documentation to determine if activities are conducted in accordance with contract requirements and to recover over-billed costs.

Typical risk areas that our clients encounter in their major construction contracts, labor, and service agreements include:

  • Labor and equipment rates billed at higher rates than contracted (by position levels, straight time calculations, and overtime calculations)
  • Excess labor charges related to unauthorized overtime, charges for other activities, and charges for transferred or terminated employees
  • Labor mark-ups in excess of contracted rates, inaccurate calculation of mark-ups or rate build ups and/or application of field personnel mark-ups to home office personnel 
  • Excess or inaccurate per diems (per diems paid in excess of contractual requirements, unauthorized increases to per diems
    Off contract bonuses billed by the vendor, including holiday bonuses, incentive bonuses, etc. 
  • Excessive expenses for entertainment, travel, social gatherings, flight upgrades, office televisions and appliances, and office meals/food 
  • Lack of supporting documentation required per contract, including timesheets, receipts, third party invoices, trip tickets, etc.
  • Duplicate third party billings, such as materials, third party labor, expenses, etc.
  • Discounts not passed through from subcontractors and vendors, including volume discounts

We help our clients mitigate their contractual risks and benefit from a variety of cost saving measures, including: 
         Reimbursement from overcharges
         Improvement in return on investment
         Identification and mitigation of risks in contracts
         Improvement in internal controls and processes
        Standardization and enhancement of contracts
        Enhancement in relationships with key business partners
        Identification and establishment of preferred vendors

Our experienced Vendor and Construction Audit Professionals are ready to assist you today in saving valuable dollars that you need to run your company.  

We have a proven contract compliance audit methodology which allows us to review and analyze any contractual agreement that you have concerns with.  We also have the ability to quickly review your vendor/supplier  list and determine which vendors are the most risk for errors in billings and contract adherence in order to assure that your contract compliance program is focused on being as effective and efficient as possible.

Some of the key contracts and contract provisions we audit include:

  1. Construction/Service Supplier Contracts
            Prime and Sub Contractor Fee Verification
            Labor Charges Verification
            Materials Charges Verification including surcharge verification
            Sales Tax Verification
            Mark-Ups Verification
            Freight Charges Validation
            Billed Material Delivery Verification
            Performance Bonds and Lien Releases Validation
            Insurance Requirement Validation (Prime and Subs)
           Service Provider Contracts
            Professional Services Rates Verification
            Charged Hours Validation (i.e. timesheets)
            Per Diems Validation
            Bonus Validation (incentive, holiday, performance)
           Completed Jobs Validation
            Mark-Ups Verification
            Overhead Verification
            Third Party Charges Validation
            Stand-By Charges Validation
            Lien Release Confirmation
  2.           Key Material Contracts (Raw Materials, Volume Purchasing Agreements)       
                        Discount Verification
                       Volume Milestone Verification
                       Quality Requirement Verification
                       Third Party materials Verification
  3.           Freight & Transportation Agreements
                       Freight Rates Validation
                       Fuel Cost Adjustments & Surcharge Validation
                       Insurance & Hazard Materials Validation
                       Demurrage Verification
  4.          Concessionaire Agreements
                       Gross Receipts Validation
                       Commission Calculation Validation
                       Cash Collection and Deposit Validation
                        Inventory Controls Review
  5.           Other Contract Compliance Procedures
                        Insurance Validation
                       Gifts & Entertainment/Conflicts of Interest Verification


Our Contract Compliance services ensure the accuracy of expense generating agreements and their resultant billing transactions via:

  • Preliminary analysis of historical expense data to identify primary suppliers and expense categories with the greatest potential for cost recovery and reduction
  • Collection and initial review of contract terms and conditions for selected suppliers
  • Review of client’s relationship with selected suppliers to identify sensitivities and ensure support and desire to pursue refunds
  • Mutual confirmation of primary suppliers for review
  • Collection and review of invoices and sub-invoice data and records for selected suppliers
  • Detailed line item analysis and review of invoices, payment records, purchase orders and other billing support documentation
  • Confirmation that contract provisions and industry standards have been accurately applied to your billing
  • Identification, substantiation and submission of overcharge claims to applicable suppliers
  • Identification of cost reduction and contract improvement opportunities
  • Direct negotiation and settlement of overcharge claims with suppliers
  • Cash refunds of overpayments are expeditiously recovered and all credits are received and utilized Supplier refunds and credits are received in totality and truly reflect your full entitlement

Our Contract Compliance Review Process

Examples of Contract Compliance Audit results

Did you know...on average a company recovers 5-10% when completing contract compliance audits.  Let us help you recover lost funds!

A.    A Contractor with a cost plus contract for services overcharged

B.    Equipment Manufacturer failed to utilize correct pricing/calculation methodology relating to steel indexing resulting  in a $786K  recovery. 

C.    Fee, escalation and mark‐up calculation errors for a service contractor resulted in overcharges of approximately $1.7 million.

D.    A utility contractor charged incorrect billing rates, incorrect mark up on parts and also charged for lift rentals that were non-existing                                                     representing a $1.6 million dollar claim.

E.     Construction contractor used subpar building materials and charged the client at a rate for the negotiated quality of material . 

F.     IT company used off shore resources as well as a lower tier staff to fulfill work orders that were specified to require a higher level of staff   as well as                  US employees.  Due to these issues, overcharges were quantified at 1.7 million dollars.  

(Representative of audit findings during author’s career)