What is an important characteristic to investigate in construction fraud schemes related to change orders?

In construction fraud schemes, the frequency of change orders is crucial to investigate because it can reveal patterns of potential misconduct or manipulation. Change orders are formally documented alterations to a project’s original scope, budget, or timeline, and while they are a legitimate part of many construction projects, an excessive frequency can indicate fraudulent activity.

For example, if a contractor consistently submits a high volume of change orders, it may suggest they are looking to inflate costs or manipulate billing practices. This behavior could signal that the contractor is taking advantage of the contract terms to extract more funds than necessary or to cover up substandard work or delays.

Investigating this characteristic allows for a deeper understanding of the financial dynamics at play and can help identify red flags or anomalies that warrant further scrutiny. Thus, the frequency of change orders becomes a key indicator in assessing the integrity of the construction process and identifying potential fraud.