Which of the following is NOT an appropriate technique for detecting nonconforming goods or services fraud?

• A. Conduct unannounced inspections of questioned goods or materials.
• B. Determine if contract costs have exceeded or are expected to exceed the contract value.
• C. Review the inspection and testing reports of questioned goods or materials.
• D. Interview procurement personnel about red flags.

Answer: (B)

When assessing fraud involving nonconforming goods or services, the focus is on verifying actual quality and uncovering concealment. Techniques that directly probe conformance are most effective: unannounced inspections of questioned goods help prevent tampering and provide a real-time view of what’s being delivered; reviewing inspection and testing reports confirms that appropriate checks were performed and reveals any discrepancies between specifications and outcomes; and interviewing procurement personnel about red flags can uncover pressures, knowledge of issues, or attempts to bypass proper controls.

Determining whether contract costs have exceeded or are expected to exceed the contract value is a financial/budgetary concern rather than a direct method for detecting nonconforming goods. It may signal broader contract management issues, but it doesn’t verify whether the goods or services meet specifications or reveal fraud related to quality.