Red Flag: Questionable Invoices

“Questionable invoices” include those that:

  • Are submitted without adequate supporting documentation or with copied rather than original supporting documents;
  • Cannot be matched to the associated work product;
  • Include terms and amounts that differ from the related purchase orders or contracts;
  • Are unprofessional in appearance, e.g., lack complete addresses, are handwritten or without pre-printed numbers;
  • Are unmarked and unfolded, indicating that they might not have been mailed and were submitted directly by an employee;
  • Are in sequential order from one contractor over an extended period of time, indicating that the contractor may have only one client or is fictitious.

A questionable invoice from a previously unknown contractor or supplier may indicate a fictitious contractor scheme.   A pattern of questionable invoices that are paid without objection or inquiry could indicate corruption.  Such invoices often are used to fund bribe payments.

Conduct a thorough due diligence background check on companies that submit such documents.

This red flag can indicate the following schemes:

Click on the schemes listed above to see more information on each scheme, a more complete listing of their red flags and steps to determine if the schemes are actually present.