The Construction Audit and Cost Control Institute (CAACCI) Introduces 12 Steps for Reducing Exposure to Construction Fraud

Share Article

Is construction-related fraud inevitable? Kickbacks and corruption, price fixing, bid rigging, overcharge and non-performance combine to drive up construction costs for owners.

Construction Audit and Fraud Training

Construction Audit and Fraud Training

"...overcharges, fraud and non-performance combine to drive up construction costs for owners."

The Construction Audit and Cost Control Institute (CAACCI) suggests the following practical steps that Owners can take to help defend against construction-related fraud:

1.    Know your projects - the capital expenditures, the types of projects and contracts, the status and how capital expenditures are recorded in books and records.

2.    Know your vendors – who are the contractors and subcontractors and major suppliers. Know their ownership, performance history, prior problems including litigation, fines and settlements. Know your organization’s prior experience.

3.    Know the frauds associated with your types of projects – gain insight from your own experiences and the experiences of others. Research construction-related fraud.

4.    Understand the culture for your projects - the location and industry practices. Understand gifts and entertainment rules and practices. Understand the relationships and political connections.

5.    Understand your contract management environment – Know who manages and controls the projects and how your management interacts with contractors, subcontractors and suppliers.

6.    Learn recent construction experiences – Identify overruns and failed projects, delays and litigation. Determine what the grapevine has to say about project management.

7.    Learn how work is monitored – Identify construction errors and how often monitoring has resulted in rework, or corrections, credits from contractors or contractors being debarred.

8.    Determine administrative procedures and how they are applied - for bidding and awarding work, pay requests, change orders. Identify exceptions, protests, change orders and contract claims.    

9.    Reduce opportunity for fraud to occur and go undetected - Harden the target through effective contracting, and monitoring of work and billing, defining, communicating and enforcing travel and entertainment guidelines.

10.    Audit books and records of contractor and subcontractors – Some fraud is reflected only in the books and records of others. Have right to audit provisions in all contracts. Use them.

11.    Drill down into detail – Inspections, counts and measurements, lab tests, and review of detail supporting billing provide insight.    

12.    Effectively respond to indicators of wrongdoing – Professional response starts with addressing the indicators and may include a complete investigation. Outcomes may be debarring vendors, referral to law enforcement or regulators, civil suits, and termination of employment. Effective response sends a clear message.

These and other construction related fraud activities will be discussed in detail at construction audit and construction fraud seminars sponsored by CAACCI. These seminars provide an opportunity for attendees to discuss solutions for today’s challenges in auditing and controlling construction costs. Participants of these courses have reported success when applying lessons learned in these seminars in their construction project(s).

Fraud Risk Workshop
June 18-19, 2013 Dallas
Instructors Scott Langlinais and Courtenay Thompson have developed the “Fraud Risk Workshop” to train finance and audit professionals to address difficult fraud issues. Attendees will learn how to recognize and respond to risks before they cause severe damage. Key learning points are reinforced by case studies and exercises. Develop an instructor-guided risk and response plan for your own unique environment. 8 CPE Credits.

Construction Fraud: Detection, Prevention & Response
October 7-8, 2013 Dallas
Recognized authority on fraud-related training Courtney Thompson will present “Construction Fraud: Detection, Prevention & Response.” This seminar explores types of fraud common to construction, techniques for reducing construction fraud and how to respond when fraud surfaces. The content is practical and hands-on, loaded with strategies and tactics, tips and techniques. 16 CPE Credits.

Effective Auditing of Construction Activity
October 7-8, 2013 Dallas
Rich Townsend, CEO of the consulting firm R. L. Townsend & Associates, will lead The “Effective Auditing of Construction Activity” seminar. This seminar provides auditors insight on how to partner with their management team to conduct effective audits of their organization’s construction activity. Specific “how-to” construction audit techniques and other industry specific information will enhance the attendees’ ability to identify and develop potential cost avoidance and cost recovery. The course will also help auditors identify opportunities for key process improvements and contract administration. 16 CPE Credits.

About The Construction Audit and Cost Control Institute
The Construction Audit and Cost Control Institute (CAACCI) of Dallas, Texas has been providing public offering and in-house professional development training seminars in affiliation with Courtenay Thompson & Associates since 2008. The principal instructors (Courtenay Thompson and Rich Townsend) have been providing construction audit and fraud professional development training to management and auditors for over 20 years. CAACCI members include project management and construction audit representatives from a wide range of private and public organizations. For more information on our construction audit and construction fraud seminars, go to

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Mr. Rich Townsend

Mr. Courtenay Thompson
Visit website