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Who steals:
- Regional and division presidents
- Construction supers
- Purchasing agents
- Accountants, bookkeepers
- Sales agents
- Land and development executives
How they steal:
- Strong-arm trades for kickbacks
- Build houses on the side
- Create dummy vendors
- Myriad accounting fraud techniques
- Use of company materials for own purposes
- Misappropriate and resell delivered products and materials
- Strong-arm Realtors and land brokers for kickbacks
How to stop it:
- Do not allow supers to negotiate trade contracts
- Separate purchasing, authorization and paying functions
- Bid competitively
- Tighten purchase order and variance controls
- Maintain cross-departmental accountability (no fiefdoms)
- Cross-train managers, and provide:
- Written scopes of work
- Open-book management
- Checks and balances - have multiple executives sign off on trade contracts, funds allocations, disbursements
- Distributed P&L responsibility (such as a project manager form of organization)
- Annual internal audits
PB Topical Ref
