Monitoring fraud risks in the supply chain
Supply chain professionals face significant challenges with fraud, waste, and abuse; however, not all companies have measures in place to detect or prevent these issues.
Key strategies to mitigate risks include meticulous tracking of labor unit data to prevent fraudulent charges, such as overtime for regular hours or charges for non-existent employees. For indirect expenses like professional fees or marketing costs, companies should demand detailed accounting and cross-check vendor invoices with source documents to identify potential overcharges. Understanding how vendors allocate shared costs and defining “cost” clearly in contracts are crucial to avoiding inflated bills. Furthermore, scrutinizing subcontractor relationships and thoroughly vetting one-time suppliers can help mitigate risks in the supply chain.
These steps, though challenging, are essential for maintaining integrity and efficiency in procurement and vendor management. Your ShindelRock professional can assist you with the process.