Internal Controls — Contract Management

• Performance under a contract meets the terms, conditions and specifications of the contract.
• Contracts are properly awarded.
• Reduce (and prevent, if possible) collusion between vendors and employees and/or among vendors during the bidding, awarding, drafting, payment or execution of the contract, by, among other things, segregating duties among personnel.
• Vendors are qualified to perform the work required by the contract.
• The original contract price is not increased through the use of frequent or unnecessary change orders.
• Only allowable costs are billed and paid.
• All goods and services under the contract are delivered or performed.

• A vendor, contractor or supplier will be paid more than is provided for by contract.
• Governments are susceptible to: unauthorized charges; prices in excess of those agreed upon; claims for unallowable costs; quantities or qualities that differ from those agreed upon; and charges that should be attributed to another contract.
• Vendor (accountant, attorney, architect, engineer, contractor, etc.) is not licensed or not authorized to do business in the jurisdiction.
• False and fraudulent billing schemes result in pricing irregularities, double billing, mischarging, etc. 
• Products are subject to substitution, non-delivery or misdelivery.
• Kickback schemes and conflicts of interest occur.
• Systematic mischarging results from programmatic extension.