Different types of shrinkage in the construction industry. yourCompany has practical experience with almost every item on the list

Construction companies have a number of different risks to deal with. It's normal in the industry. However, there are a number of risks that the construction industry has less control over. These are the ”sore” points that can be conflicting to work with. One thing is certain, however. It is the owners, shareholders and customers of construction companies who pay for these sources of fraud. It is therefore very financially attractive for construction companies to focus on these areas and ask themselves - are we on top of these issues? yourCompany has compiled this list for construction companies to give you inspiration on where to start the journey towards a less wasteful business.

Internal shrinkage
- Cheating with mileage money
- Theft of tools
- Theft of fuel
- Theft of office supplies, IT, TV and photo equipment
- Unauthorized use of machines or rentals
- Abuse of yellow plate cars/crew vans
- Unauthorized sale of used equipment
- Wage theft/fake employees
- Misuse of credit cards
- Abuse of parking scheme (e.g. easypark)
- Fuel card misuse
- Unauthorized payment of fines and parking fees (via UE or bypassing own rules)
- Private purchases in DIY stores
- Bribery and corruption (both giving or receiving benefits to get work)
- Price agreements
- Private use of tickets for customer events
- ”Black” remuneration of staff through services and bills
- Theft of scrap metal and metals
- Split payments (splits invoice under 2. approve limit)
- Private invoices are sent as business invoices
- Employees' own companies used for cheating and invoicing/commission
- Costly friend services
- Too much work on hourly rate rather than contract/fixed price

External shrinkage
- Burglary of cars, containers, sheds
- Burglary in finished or almost finished buildings
- Break-ins in warehouses and equipment yards
- Break-ins in office buildings
- Vandalism and Arson on construction sites
- Theft of cables
- Theft of machinery
- Theft of tools and materials
- Theft of fuel
- Crane climbing & parkour (damage or accident causing downtime)
- Accidents involving children, curious people, runners, etc. on construction sites

Suppliers
- Aiding and abetting staff fraud (incorrect invoice text, delivery, etc.)
- Replace deliveries with cheaper product (no-name)
- Cheating with timer
- Cheating with staffing
- Using illegal/black labor/social dumping
- Insurance fraud under the cover of a construction case (e.g. for wage protection)
- Obtaining proven false low prices
- Overcharging for extra work (perhaps in agreement with your own staff - for a fee)
- Over-invoicing of rent/lease - against kickback not to the company but the employee who approves the invoice
- Sending the same invoice multiple times on a new invoice number (error or deliberate)
- Performs private work for the project manager/manager and invoices the construction project
- Removing materials from the construction case = new purchases (backorders)
- Stealing own products from the construction site to buy new ones (external theft)

Administrative
- Outdated asset archive, incorrect accounting depreciation
- Cheating with payroll (open closed accounts)
- Lack of blacklisting of suppliers
- Using suppliers despite blacklisting
- Bonus payment instead of overtime (due to quarantine for unemployment benefits)
- Lack of reception and handover procedures (on the case)
- Missing tool registration
- Poor overview of machinery (GPS) exchange/loan exchange including trailers
- Lack of preventive measures, labeling (DNA)
- Flawed politicians
- Poor password change process in DIY stores
- Lack of financial background check
- Missing criminal records
- Black salary with mileage allowance (approved by manager team)
- Controller must not become too close to project manager/manager
- Decentralized product selection and guidelines on security products
- Lack of insurance overview or poor implementation in practice on cases
- Lack of central registration of loss events and capitalization (direct and indirect)
- Inadequate process for reporting to the police

Other risks
(Fuse manager's work area)
- Incomplete and not updated emergency response plans
- Inadequate BCPs (serious incident plans)
- Inadequate fire protection of the building
- Industrial espionage
- Poor access control and TV surveillance in office buildings
- Risk of politically sensitive work / connections (activism and terrorism)
- Travel safety for staff and management
- Emergency response to accidents/kidnappings abroad
- Inadequate value recovery plans
- Bankruptcy (goods deliveries frozen = business interruption)

Sincerely yours
yourCompany
Christian Pejtersen