Contractors looking to take advantage of a lack of oversight may submit fraudulent invoices containing previously billed timesheet information. The fraud is accomplished by submitting for payment a new invoice with a new invoice number citing past pay periods. The invoice will be different in that the information when examined is often an overlap of two pay periods from months past. A week from one pay period and a week from the next or prior pay period.
The fraudster not looking to create suspicion will request an amount similar to what had previously been paid. This is done so the new invoice does not draw attention and is paid by an unsuspecting bookkeeper. The result being the fraudulent contractor receives payment a second time for services he had previously billed and was paid for.
Without the use of data analytics, it’s highly unlikely the fraud would ever have been detected. Remember, the contractor used a new invoice number, different dates and a similar amount. If the original invoice from the contractor was for $30,000, it’s safe to assume the new invoice will be for the same amount as differing amounts for the same period would surely draw attention. Once this happens and is successful, you can bet the fraud will be perpetrated again and again.
Engaging a Certified Fraud Examiner such as Jerry Ipsen who’s familiar with data analytic methods in the detection of fraud does two things. First, it sends a message to your contractors that fraudulent acts will not be tolerated and second, employees will know you’re taking steps to check their work. Remember, the amounts paid on these fraudulent invoices (intentional or otherwise) are subject to recovery.
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