He also outlined several "warning signs" for fraud. As a general rule, these are "a set of circumstances that are unusual in nature or vary from normal activity," he said. Problems arise when these warning signs are ignored or not adequately investigated. ....

     ... Such warning signs may include: a single vendor receiving a majority of contracts, refusal to produce records and files, significant lifestyle change of people involved in bond program, refusal to take vacations (for fear someone else will look at the books), turning down promotions or transfers, no exceptions or errors (reports are "too clean"), lack of separation of duties (minimal checks and balances), successful bidders subcontracting to losing bidders, winning bidder always bids last, losing bidder cannot be located in business directories, numerous or large dollar change orders, and invoices without addresses and phone numbers for vendors, and costs billed are not consistent with progress of construction.

      "Change orders are a big deal," he said. "Contractors will bid low, then add change orders sometimes the day after they get the contracts." ...

      But the buck stops, he said, with district leaders.

"It all comes back to the ethics and integrity of people in charge," he said. "Trust is not a control." ...         To read the complete article please visit: