It’s no secret that government contractors sometimes find themselves in a bit of financial trouble. After all, bidding for government contracts can be a costly endeavor. Sometimes, contractors will resort to improper allocation of costs – also known as “cross-charging” – to get more money from the project.
This occurs when workers are told to record which project they worked on inaccurately so that the contractor can bill more hours than they actually worked. Unfortunately, this is a huge problem and can lead to significant losses for the taxpayers.
In this blog post, we’ll discuss the improper allocation of costs and how it can hurt both taxpayers and honest contractors. We’ll also discuss what you can do if you’ve been wrongfully accused of participating in such a scheme and when those accusations are likely to arise. Let’s begin.
Cross-Charging: Honest Mistakes, Legitimate Charges, and Fraud
When cross-charging is done legitimately, it can be a way for contractors to ensure that they are being paid fairly for the work that they are doing. In some cases, contracts may exceed their budget and need to be charged for additional work that was performed.
However, improper allocation of costs occurs when a contractor uses funds for one project on an unapproved project to fraudulently extract money from the government. This type of fraud can lead to significant losses for the taxpayers since, ultimately, they are the ones funding the government.
When Does a Cross-Charge Become a Red Flag?
When contractors are using the improper allocation of costs as a way to fraudulently get more money from the government, it’s obviously a huge problem. Unfortunately, this type of fraud is common and can be very difficult to detect.
There are, however, some methods governments use for detection. For example, if a contractor seems to be repeatedly billing for work that was not authorized by the contract, this could be a sign of fraud. Additionally, if an audit reveals that funds paid were carried over to another company project, warning bells will ring.
If you think you may have been wrongfully accused of participating in improper allocation of costs, it’s important to speak with an experienced attorney who can help you defend yourself against these accusations.
What If You Are Wrongfully Accused?
If you’ve been wrongfully accused of cross-charging, it’s important to take action immediately. First, you should contact an attorney who specializes in government contracts law. They will be able to help you build a case and represent you in court. John Teakell has worked on these types of cases for several years and knows how to assist his clients in navigating the accusations procedurally and effectively.
One of the first things he will advise is to gather all of your billing records. Together, you will review the charges of the contracting agency. This will help isolate their points of contention so you can build an appropriate defense and prove that you did not engage in any improper billing practices. If there are concerns, you will work together to develop a plan of action that may involve negotiating with the agency or taking your case to court.
Above all, stay calm and don’t lash out at the agency. The urge is understandable. Working on government projects can be rife with technicalities and various hurdles to clear before receiving payment. If you’re dealing fairly and honestly, then being wrongfully accused culminates in peak frustration. Just let your attorney do the communication and avoid escalating charges one-to-one or through the media. Doing so will only harm your defense.
Improper Allocation of Costs Is a Serious Charge
Improper allocation of costs can be a way for contractors to get more money from the government, but it’s also often used as a way to commit fraud. Unfortunately, this type of fraud is common and it can give firms like yours a bad name.
There are some methods governments use for detection, but if you think you may have been wrongfully accused of participating in improper allocation of costs, it’s important to speak with an experienced attorney immediately. John Teakell is ready to learn more about your case. He knows the common approaches that agencies use to press these accusations, and he knows how to counter them. Contact him today to discuss your case.