Purchasing

 Require that estimators receive more than one quote for services or
materials.
 Ensure management reviews and authorizes all job site material
purchases.
 Implement strict limits on the amount that managers can spend without
receiving additional approval from managers.
 Make it a standard practice for managers to carefully review and validate
that all ordered materials and supplies have been received. This will
protect the company from being shorted on orders.

Cash + Billing
 Require proper invoice approval for all purchases made for a job.
 It’s important to require dual signature on checks over a certain amount
to reduce the opportunity for improper payments to be made.
 Limit the number of individuals with signatory authority on check
signing. The higher the limit the higher the position the individual
should have in the company.
 Create a rule that prevents billing personnel from performing receivables
duties.
 Discourage yet document when management overrides the internal
controls process

Subcontractors
 Ensure a regular review of invoices, payments and contracted amounts.
If there are any variations, it’s important to quickly follow up to identify
the reason and ensure its validity.
 Regularly review original contract costs to invoiced contract costs to
determine if there are variations.
 Conduct an annual review of the subcontractor/supplier bidding process
to identify areas of improvement and drive competition.
 Payroll
 Require a non-payroll professional to reconcile the payroll account on a
regular basis.
 Use direct deposit or automated payment systems when possible to
reduce the opportunity for dishonest employees to manipulate the
system.
 Require any changes to an employee’s status (contact information,
withholding rates, retirement plan contributions, etc.) to be completed in
writing and approved by a manager before they are implemented.
 Conduct regular on-site audits to prevent against fictitious employees
from receiving paychecks.