Forensic Accounting Experts Quantify Economic Damages for the Construction Industry
Accounting experts understand the dynamic conditions within the Construction Industry
Some professionals can miss the mark when providing forensic accounting and litigation support services to the construction industry due to a lack of true understanding of the current industry conditions. With North American Forensic Accounting’s experts, you can be assured that all factors are taken into consideration, such as the rippling impact of the COVID-19 pandemic on the supply chain or the stresses placed upon already tight margins by increasing inflation or the increasing wages required to keep employees after the great resignation. Indirect factors like the impact of interest rates on investing in new construction also contribute to the wide breadth of information that we consider while supporting your business.
Litigation support to help your construction business recover
Construction companies can sustain significant losses through no fault of their own. Companies can be harmed by a breach of contract or a natural disaster. When a breach causes losses, your remedy is through the contract, but calculating your losses might not be so simple. If your business is harmed by a fire, flood, arson, vandalism, or another disruptive act, you might be able to file a claim through your business interruption insurance. Again, submitting a precise, detailed claim that your insurance company will honor usually requires greater skill than the average accounting firm possesses. Yet, in either of these cases, you can rely on North American Forensic Accounting.
The forensic accounting experts at North American Forensic Accounting have decades of experience in litigation support for breach of contract and insurance claim disputes. We pore over business records to extract the precise data necessary to assess your losses. We apply a range of proven methods to arrive at solid numbers that stand up under intense scrutiny. We will appear as expert witnesses at trial to explain our work and bolster your case.
Investigating allegations of fraud, corruption, and deviant behavior
When it comes to fraud, perhaps no industry has as dubious a reputation as construction. From padded bills to materials walking off the job site, fraud plagues clients and contractors alike. Losses from fraud can eat away at a company’s profit margin, and eventually force it into bankruptcy. If you’re the head of a construction company, you know what this issue can do to your reputation as well as your bottom line. Fortunately, the investigative experts at North American Forensic Accounting can help. We draw on decades of industry-specific experience to help companies tackle vexing problems. We examine records to spot red flags of fraud and gather the evidence you need to fully understand the problem.
Common categories of fraud in the construction industry
Fraud is common in construction, because there are so many moving parts—bidding, billing, procuring, etc.—and, usually, gaps in accounting controls for each of the processes. That combination creates opportunity for anyone with access and motivation. We frequently see fraud in these construction business processes:
- Bidding — Corruption in the bidding process, which includes bribery, conflicts of interest, extortion, and kickbacks. Bid rigging in public works projects not only eliminates honest contractors from competition, but victimizes taxpayers who pay inflated prices, often for substandard work.
- Billing — Fraudulent billing includes billing for materials that never arrive, often from vendors who never existed. Fraudsters also substitute specified materials for cheaper ones of lower quality and pocket the difference. Then there’s workforce fraud, billing for ghost employees or billing too high a rate for unskilled labor. Supervisors can also manipulate change orders to inflate costs.
- Expense reimbursements —Workers may claim fictitious or inflated business expenses. Transactions often occur on company credit cards that are not properly reconciled.
- Vanishing non-cash assets —It is not unusual for materials, supplies, and other items of value to disappear. Thieves either re-sell them or convert them to their own use.
- Check tampering — Unauthorized personnel manipulate or forge checks. Authorized personnel write checks to non-existent vendors. Other workers may submit phony invoices for payment to companies whose address just happens to correspond to their own.
These schemes proliferate where companies do not exercise tight controls over processes. Our NAFA experts can assess your internal controls and show you where you are vulnerable to fraud. We also recommend the types of controls you must implement to prevent fraud from happening.
Knowledge, experience and proprietary tools to root out fraud in construction
NAFA is comprised of experts in fraud detection and investigation. Our proprietary tool, FraudSeekerTM, provides insights into the areas of your operation where fraud is most likely to occur. Armed with knowledge, experience, and the best diagnostic tools, NAFA can lead fraud investigations or support the efforts of your legal counsel. We provide litigation support when fraud cases lead to prosecution or civil lawsuits to recover losses. We have ample experience as expert witnesses, offering clear testimony that’s readily understandable for a judge or jury.
Contact North American Forensic Accounting for help assessing losses
North American Forensic Accounting calculates economic damages, quantifies insured losses, calculates damages as part of contract litigation, and investigates construction industry fraud. To learn more, call us at 347-286-4860 or contact one of our offices online to schedule an appointment. Headquartered in Harrisburg, PA, NAFA serves clients throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area.