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  • Writer's pictureJerry Ipsen, CFE, MBA

Taking on False Representations

The term "False Representation" has been described best as the catch-all category of contractor or construction fraud. While it can be many things, false representations occur the moment you receive something different from what you paid for.

A common example is when contractors or subs charge for either more laborers than the job actually took or claim they were using skilled workers, when in fact day laborers or undocumented workers were brought in to perform the same tasks for much less.

A simple way to combat a false representation is through an audit. Having a "right to audit" clause not only helps control the bottom line but keeps your subcontractors aware of your presence on the project. Understand, the audit clause written into every contract should include the right to conduct surprise onsite audits and to access your subcontractor’s books when suspicions are warrant. Investigating false representations is good risk management.

Ipsen Due Diligence knows you're busy and is ready to perform such an audit for you.

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