Deloitte Construction Compliance Management and Fraud Investigation Services

Construction Compliance Management

With the rapid growth of the economy, construction has been playing a critical role to the development of the society and the enterprises. The construction projects could often cost millions or even billions of dollars, involve numerous and complicated procedures, strong professionalism, various stakeholders, plenty suppliers and internal personnel; fraud, corruption grows accordingly. Reference is made to recent research by the American Association of Certified Fraud Examiners, fraudulent activities in construction projects may lead to financial losses as much as 45% of the project budget. Fraud in construction projects may not only cause economic losses to enterprises, but also trigger risks such as construction progress delays, quality defects etc. Consequently, further attention has been brought to the supervision of construction projects.

Deloitte has extensive experiences in construction compliance management and fraud investigations. Our clients are all over China, including large multi-national companies, private enterprises, listed companies, investment portfolio management institutions, etc. in various industries.

We assist our clients with compliance management and project management, as well as offering one-stop services throughout the life cycle of construction projects. From our experiences, simultaneous control at both enterprise and project level is an effective strategy of construction compliance management, at the same time it also helps to reduce the construction cost.

Project level

Through the review of internal control regulations, design cost estimation, tender and procurement, construction management and final settlement disputes/audit support, we assist clients in the whole process and all-aspect risk control of the project, to ensure the compliance and cost rationality for implementation of the project overall. We also assist clients to strengthen control at all stages of the project, to ensure the quality of the project, reduce the risk of construction fraud, and to maintain reasonable control of the project expenditure.

Construction fraud investigation

We have extensive experience in construction fraud investigations. Our construction fraud investigation team comprises of professionals with forensic investigation, internal control compliance management, construction and cost management background. We provide our clients with professional services of construction fraud investigation and compliance management.

We are well-versed in high-risk area of fraud in construction projects, and able to assist clients to get to the root of the origin, identify the key reasons behind project cost overruns which could provide room for negotiation, identify and quantify the contractor's liability for breach of contract and the misconduct of relevant person-in-charge internally, and advise to optimize the workflow process.

Construction fraud investigation analysis includes:

Construction cost review
Review the project documentation, monitor contract variation / change records, project completion acceptance and price verification records, payment records and supporting documents, etc.; Compare market prices to verify price reasonableness; Utilize Deloitte's big data analytics platform to analyze project cost rationality; Comprehensively verify the authenticity and reasonableness of project costs.

Background check
Our experienced and multi-industry team utilize open data search, field investigation and relevant industry information to identify the project participants' history, organization structure, industry experiences, reputation and potential conflict of interests with key stakeholders.

Electronic data analysis
We have professional electronic forensic software and series of working platforms which provides industry benchmarks, and to process electronic data information. We can retrieve electronic data from the target company computers and mobile devices, and by using intelligent analysis tools, we can review large amounts of information within a short period of time and at the lowest cost promptly and accurately. We are able to identify fraud in the project and provide a reliable basis for subsequent potential negotiations or litigation accordingly.

Construction damage/loss assessment
With referencing to the results of our comprehensive investigation, we assess the potential losses of the project and analyze the weaknesses of the internal control system to assist clients in loss recovery action plan.