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:
- 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 - Key Material Contracts (Raw Materials, Volume Purchasing Agreements)
Discount Verification
Volume Milestone Verification
Quality Requirement Verification
Third Party materials Verification - Freight & Transportation Agreements
Freight Rates Validation
Fuel Cost Adjustments & Surcharge Validation
Insurance & Hazard Materials Validation
Demurrage Verification - Concessionaire Agreements
Gross Receipts Validation
Commission Calculation Validation
Cash Collection and Deposit Validation
Inventory Controls Review - Other Contract Compliance Procedures
Insurance Validation
Gifts & Entertainment/Conflicts of Interest Verification
WE DON'T GET PAID UNTIL YOU GET PAID!
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)