Technology for Transparency: the New Standard for Eliminating Overbilling Fraud in Professional Service Contracts

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The Partnering Against Corruption Initiative (PACI) Community is among one of the most prestigious cross-industry collaborative efforts identifying key issues of corruption, compliance, transparency, and emerging market-risks and engaging in new pertinent solutions alongside governments, international organizations, and business leaders.

Recently, I had the opportunity to present our TransparentBusiness platform and what we are doing from the legislative standpoint to help governments and business alike to save millions of dollars just by adding the requirement of transparency into their procurement requirements.

We understand that corruption is a significant concern, and unfortunately in most cases, very costly. Much of the corruption is done under the guise of the payments for professional services, identified as “billable hours” which in the past has been close to impossible to verify. For example, if an attorney submits an invoice claiming they have spent 20 hours preparing a motion, you have no way to verify if they, in fact, spent the full 20 hours or just 15 minutes to modify an already existing template as traditionally, due to lack of technology, the payments in the payment industry were done based on the honor system.

One of the most notable cases of overbilling happened right in New York City, six years ago. SAIC, a government contractor overbilled the city over five hundred million dollars on just one municipal project. The project started as a $73M flat-budget deal and had mushroomed, via numerous change orders, to almost $700M before a whistle-blower reported the scheme to the law-enforcement authorities. The perpetrators were arrested, plead guilty, and went to jail. The city has since recovered the money. If not for that whistleblower, the city would have lost that money as Citi auditors had no tools to verify accuracy or inaccuracy of the billing. In most cases, such fraud and overbilling remain undetected.

This is just one example of fraud that has been documented and reported on; how do we begin to rectify all of the cases of overbilling that go undetected annually? Half a billion here and half a billion there – overbilling such as fraud, waste, and abuse by contractors then adds up to tens of billions of dollars per year, stolen from government agencies and major corporations.

Technology is being recognized as a game-changer and key solution for bringing transparency and addressing corruption across the globe.

Our TransparentBusiness platform is designed to help our clients and partners increase contractor productivity, protect them from overbilling, allow coordination and monitoring of their workforce, and provide real-time information on the cost and status of all tasks and projects.

If corporations are to mandate transparency, they can shield themselves from overbilling by contractors while increasing the productivity of remote work by 15-40% by removing time-wasting activities from billed hours.

It is reported that non-work-related activities often take a third of a business day or more! If we can eliminate activities such as: watching YouTube videos, time spent on Social Media, online shopping, dating sites, online gaming etc, to be considered billable, productivity evidently will increase and companies will know dollar for dollar where their money is being spent on projects. We understand that activities as the ones described are part of a normal routine of everyone and an expected distraction, we can just want to avoid the governments or businesses to be billed for them.

The PACI community’s main objective is to move from “intent to action” with the leadership of close to 90 signatories from a collective group from multiple industry sectors and global locations. PACI is building an organizational culture of confidence, integrity, and trust engaging in new solutions in areas including: “building good practices on information-sharing between actors; protecting economies while tackling corruption; discussing lessons learned by several countries and industry actors; promoting education to build trust and integrity; proactively approaching self-reporting; and supporting increased reliance on e-governance by governments.”

We believe in this digital era, transparency is a requirement to address corruption between government contracts, international organizations, and corporations looking to engage with a remote workforce. Understanding the value of transparency and how to leverage it within organizations will not only save billions of dollars worldwide but strengthen the global economy.

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