Government organizations rely on outside third-parties to provide the goods and services they need to operate effectively. Contracting with an outside third-party exposes these organizations to significant risks.
Picture these scenarios:
- A contractor prepared and submitted inflated invoices and false change orders for labor and materials on a project to build a water treatment plant for a State agency resulting in overbilling of $4.8 million.
- A municipal government contracted with a fire safety company to annually inspect and re-size firefighter safety equipment. However, the company failed to perform this critical function, putting the safety of firefighters in jeopardy.
- A freight merchant submitted false fuel and weight claims to the U.S. Government totaling $13 million for oversized air shipments when the standard load was actually delivered via ground transport.
Scenarios like these are just a few of the many risks affecting organizations that work with third-party vendors. As Government organizations continue to rely on outside suppliers or service providers, their exposure to risk and fraud increases.
You might be asking, “What measures could these organizations have taken to prevent and detect these scenarios?”
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