Preventing and identifying fraud, promoting ethical behavior and compliance, and addressing payment issues within your organization can be a challenge; yet, as a leader, addressing these risks is crucial to maintaining a healthy workplace culture and mitigating losses that could occur from a fraud scheme. No organization or industry is immune to fraud, and the construction industry is no different. When fraud occurs at a construction organization, the losses can be massive. The “typical” or median loss for the construction industry was $250,000, while the average loss was a staggering $1,499,000 for cases included in the Association of Certified Fraud Examiners (ACFE) report, “Occupational Fraud 2024: A Report to the Nations.”1
What steps can your organization take to prevent fraud, promote ethical behavior and compliance, and address payment risks?
1. Implement a Fraud, Ethics, & Compliance Hotline Program
Simply put, a third-party anonymous hotline is the most cost-effective way to mitigate your organization’s fraud, ethics, and compliance risks. It is an invaluable tool to assist in detecting or identifying instances of misconduct in a timely manner. It also serves as an early warning system alerting you to red flags that indicate potential misconduct risks, giving you time and the information to help prevent further issues.
A hotline program is an easy-to-implement component of a robust risk management and internal controls framework. When you consider that the average business loses 5% of revenue per year to fraud, that number can really add up.1 Establishing a fraud, ethics, and compliance hotline helps mitigate the risk of potential financial losses and costly reputational impairment and increases the efficacy of existing internal controls.
IntegraReport, the fraud, ethics, and compliance hotline program from Forvis Mazars, can help your organization. IntegraReport offers your organization quick setup and access to a customized phone hotline, web-based portal, online case management system, and hotline monitoring by fraud, ethics, and compliance professionals at Forvis Mazars.
2. Utilize Proactive Data Surveillance & Monitoring
If your organization falls victim to fraud, detecting that fraud as early as possible can help minimize its impact. Early detection may be accomplished through proactive surveillance or data monitoring. In fact, of all the detection methods analyzed in the Association of Certified Fraud Examiners (ACFE) report, "Occupational Fraud 2024: A Report to the Nations," proactive surveillance and data monitoring detected frauds fastest, with a median duration of six months.
Payment Risk Analytics is the proactive surveillance and data monitoring suite of solutions from Forvis Mazars designed to help identify fraud, highlight internal control improvement opportunities, and provide operational insights. It is the culmination of more than 20 years of experience performing data analytics on active fraud investigations and proactive analytics projects.
The power of our refined forensic data analytics procedures is combined with an intuitive, easy-to-use interface and delivered via online, interactive dashboards. One of our Certified Fraud Examiners will examine the analytics results and identify items that may be potentially higher risk, as well as internal control improvement opportunities. We will then share these findings with you and teach you how to navigate the dashboards, enabling you to leverage your institutional knowledge for further examination.
Conclusion
At Forvis Mazars, we have the tools to help meet your organization’s most crucial needs. If you have questions or are ready to begin your ethics, compliance, and fraud prevention journey, reach out to one of our professionals.
Download this checklist to learn how your organization can help prevent fraud, promote ethical behavior and compliance, and address payment risks.
- 1 “Occupation Fraud 2024: A Report to the Nations,” legacy.acfe.com.