1131

INDUSTRY NEWS 75 PERCENT OF CONSTRUCTION COMPANIES WERE AFFECTED BY FRAUD IN THE PAST YEAR Three quarters (75 percent) of construction, engi- neering, and infrastructure companies have experienced a fraud incident in the past year, according to the 2015 Kroll Global Fraud Re- port . The findings reveal the most common type of fraud experienced in the sector was theft of physical assets or stock, experienced by 36 percent of construction companies, followed by vendor, supplier or procurement fraud (24 percent). These are some of the highest inci- dence rates of any sector surveyed and are second only to levels experienced by the retail industry. Respondents in this sector also re- ported the highest level of regulatory or com- pliance breach fraud (18 percent) of any sector surveyed. Nine in 10 (92 percent) respondents in the construction industry say their exposure to fraud has increased in the past year, the high- est increase in fraud exposure of any sec- tor. The biggest drivers of this are high staff turnover (49 percent) and entry to new, riskier markets (21 percent). In terms of responsibil- ity, a senior executive or middle manager was involved in a fraud against the company at just under one-third (32 percent) of all construction firms surveyed. Despite problems caused by high staff turn- over, only 30 percent of construction com- panies are looking to invest in background screening in the coming year and just 25 per-

Type of Fraud

Firms Affected in Past Year

Theft of physical assets

36 percent 24 percent 18 percent 11 percent 11 percent 9 percent 9 percent 7 percent 4 percent 4 percent 1 percent

Vendor, supplier, or procurement fraud Regulatroy ofr compliance breach

Internal financial fraud Corruption and bribery

Information theft

Management conlict of interest

IP theft

Money laundering

Market collusion (price fixing)

Misappropriation of company funds

cent plan to spend on management controls – less than the survey average. Daniel Karson, chairman of Kroll, observed, “One of the most telling results from this year’s report is how vulnerable to fraud companies are feeling. In one form or another, the specter of fraud arises in virtually every business rela- tionship. What our report drives home is that fraud is often an “inside job” and that compa- nies must address both internal and external relationships if they are to most effectively pro- tect their money, property and private data.” “While technology has enabled new ways to perpetrate fraud, our daily work with clients

confirms what the report also reveals — that old fashioned theft, bribery and kickbacks are still amazingly effective and pervasive,” he said. “Human nature being what it is, fraud will always be with us, whether it occurs in a company’s corner office or a world away in its supply chain. However, there are numer- ous strategies, resources and best practices available to companies that can go a long way toward helping them protect themselves and their investments.” The Kroll Global Fraud Report 2015 includes a full detailed industry analysis across a range of fraud categories and regions. To obtain a copy, visit kroll.com/global-fraud-report.

BLU HOMES, from page 9

problems that can arise in traditionally constructed homes. “Our homes are built in a controlled factory environment as opposed to a traditional home, where build materials are left out in the elements and can cause mold and allow ter- mites to be sealed up in your home.” The homes are built with steel frames that fold down, so that they can be shipped and unfolded once they’re placed at their final sites. They fit onto standard trucks for ship- ping across North America, and once placed onsite they un- fold to reveal living spaces up to 41 feet wide and 18 feet high. And because Blu Homes are built with steel instead of traditional wood, they’re also more durable than traditional homes. “Our steel framed homes last about 80-plus years, compared to the 60-plus years of a traditional home. We also have an extensive warranty program to provide peace of mind with- in the first 5 years of your purchase,” Nixon says. While Blu Homes can be found from New York to Colorado and along the Pacific Coast, the vast majority are in Califor- nia. According to Nixon, the firm is looking to change that. “Blu Homes is focused today on building in the Bay Area, but in the next five years, we hope to serve other areas of the country.”

efficient and that use environmentally responsible building materials. “A Blu Home has about half the energy costs of a tradition- al home with twice the insulation, low flow fixtures, energy efficient appliances, an easy solar installation option, and more,” Nixon says. In fact, Blu Homes that have solar panels installed have achieved net-zero status, meaning that the total amount of energy used annually is equal to the amount of energy cre- ated on the site. Some home buyers might still be put off by a home that’s partially built in a factory, but Nixon cites that as one of the main reasons that prefab construction results in homes that are – in many ways – superior to traditionally con- structed homes. “Like any industry, building homes in a controlled factory environment allows for better quality, greener, and faster built homes,” Nixon says. “We believe this is the best way to provide people with a better home-building experience and a premium product.” Partially building the homes in a factory also prevents some

THE ZWEIG LETTER DECEMBER 14, 2015, ISSUE 1131

Made with FlippingBook Annual report