During an audit of a major contract, an internal auditor finds that actual hours and dollars billed are consistently at or near budgeted amounts. This condition is a red flag for which of the following procurement fraud schemes?
During an audit of a major contract, an internal auditor finds that actual hours and dollars billed are consistently at or near budgeted amounts. This condition is a red flag for which of the following procurement fraud schemes?
When actual hours and dollars billed are consistently at or near budgeted amounts, it can be indicative of cost mischarging. Cost mischarging occurs when costs are intentionally misrepresented, often by inflating or altering time and expenses to match budgeted figures, thereby making it seem as though the contract work is proceeding as expected. This pattern is a red flag for procurement fraud, as the billing should naturally vary over time rather than consistently matching budget projections.
please if you can explain why A & D is not correct?
A : Pricing sets the price of the product (upstream) not the quantity purchased by customers. D : In the case of Bid rotation, bidders cannot influence the budget.