By definition, fraud is the crime of deceiving someone in order to secure unfair or unlawful gain or something else of value.
On capital construction projects, there are many actions taken and decisions made that could be considered fraudulent if they were intended to deceive the project owner. Approvals of wrong estimates, selection of contractors and subcontractors, specifying unsuitable material and equipment, replacing approved material, improper approvals of change orders, improper approvals of interim progress invoices, improper acceptance of work in place and improper acceptance of material deliveries are examples of some of the many decisions that might be subject to fraud actions. A project team member can end up being deceitful when his/her review or approval actions are intended for the purpose of obtaining unlawful gains. Further, those individuals can also end up being deceitful when they take actions or make decisions that they were not authorized to do.
To reduce the risk of fraudulent and/or unauthorized review and approval tasks on capital construction projects, the project management plan must first detail the forms for all business processes that need to be performed during the project life cycle stages. Then it should assign a well-defined workflow for each business process detailing the individuals who should be involved in the review and approval tasks. In addition, the project management plan should include a detailed delegation of authority (DoA) matrix that sets the approval authority levels associated with the review and approval tasks of those business processes. Further, there should be a formal process for documenting the delegation of authority to the review and approval tasks when the individuals originally assigned to perform those tasks are not available. Finally, the planned and actual details of the review and approval tasks should be automatically captured on each business process transaction and be available to be reported on.
Implementing those requirements requires digitalizing the hundred plus business processes needed to manage the delivery of a capital construction project. The digitalization fulfills the first requirement of having predefined forms or templates to capture the need information for each business process by those authorized to do so. In addition, digitalization addresses the requirement for assigning a pre-defined workflow for the review and approval tasks for each defined business process form. This workflow embeds the authority approval levels as defined in the delegation of authority (DoA) matrix. Further, digitalization enforces a formal delegation of the review and approval tasks during the non-availability periods of individuals who were assigned those tasks. Finally, digitalization enables capturing and reporting the history of all review and approval tasks associated with each transaction of each business process.
Using a Project Management Information System (PMIS) solution like PMWeb, you can easily achieve the digitalization of project management business processes. To start with, PMWeb comes ready with most of the templates required to manage capital construction projects. Most of those ready-to-use templates are the ones associated with the business processes that have the highest risk of fraudulent and/or unauthorized review and approval tasks. For example, those include the business processes for Request for Information (RFI), Site Inspections, Technical and Material Submittals, Contractor Prequalification, Bid Comparison, Contract Awards, Claim Notices, Change Orders, Interim Payment Certificates, Miscellaneous Invoices, Budget, Budget Adjustments, etc.
In addition, the PMWeb custom form builder allows creating the templates for all business processes that are either not readily available in PMWeb or need to be customized for each project’s specific needs including the language of the template. For example, those could include the business processes for Material Substitution, Value Engineering Proposal, Work Inspection Requests (WIR), Material Inspection Review (MIR) among many others.
For all those templates, PMWeb allows setting the permission rights to restrict access to the individuals who can use the business process templates. Those permission rights are not limited to the template as an overall but also to data fields included in each template. This ensures that each project individual is providing the information that he/she is authorized to provide as per the project management plan.
For each business processes managed in PMWeb, the project team should attach all supportive documents. It is highly recommended to add details to each attached document to better explain to the reader what is being attached and viewed. In addition, links to other relevant transactions or records of other business processes managed in PMWeb as well as emails imported to PMWeb can also be added.
To fulfill the second requirement, assign a workflow to each business process template to enforce transparency and accountability in managing the business. The workflow maps the submit, review and approve tasks, role or roles assigned to each task, task duration, task type and actions available for task. The workflow can also be configured to include the approval authority levels as set in the Delegation of Authority (DoA) document.
The PMWeb workflow delegation module helps to address the requirement to formally delegate the review and approval tasks from the individuals who were initially assigned to perform those tasks to other individuals. For each delegation action, PMWeb allows selecting the individual whose review and approval tasks need to be delegated. Then, select if this is applicable for all projects or selected projects, as well as if it applies to all roles played by the individual or specific roles.
This is followed by selecting whether this is a temporary delegation or permanent replacement and who the individual is that review and approval tasks will be assigned to. A decision also needs to be made if this delegation or replacement will be limited to only future review and approval tasks, past tasks, or both. If the delegation is temporary for a specific period, then provide the end date of this delegation. A note needs to be added to explain the reason for this delegation or replacement with the option to activate or deactivate this delegation or replacement decision.
To fulfil the last requirement, when a transaction for any of the business processes managed in the project is submitted for review and approval, the workflow tab available on the relevant template captures the planned review and approve workflow tasks for each transaction as well as the actual history of those review and approval tasks. The captured workflow data includes the actual action date and time, done by who, action taken, comments made and whether team input was requested.
For business processes that need to be formally communicated by either printing the predefined output template so it can be wet-signed and stamped or saved in a PDF file format so it can be digitally signed, PMWeb allows including the planned and actual workflow tasks in the output form. This provides the recipient of the communication with the details of all the individuals who were supposed to perform the review and approve tasks as well as the details of all the individuals who have actually reviewed and approved the business process transaction.