Builders and Contractors Exchange
Weekly Bulletin: 06 April 2007
Weakest Link - Ethics For Supervisors
By: William M. Dozier
In previous articles, we discussed at length the old adage that a “chain is only as strong as its weakest link,” and noted that a business is only as strong as its "weakest" ("worst") employee. In a case that we discussed last year, a local ship repair business had a problem with a first line supervisor substituting materials on the job which brought about a temporary suspension from receiving new government contracts.
A similar problem has recently arisen at a local company where first line supervisors were not properly following the company's timecard system. When a company uses timecards to document worker time and to charge that time to particular jobs, it is of paramount importance that the timecards be filled out correctly and in full accord with the company's policy.
In the recent case, certain supervisors were, in effect, giving their workers a "bonus" by letting them leave early but still having the timecards indicate that the workers had worked a full day. The immediate excuse for this practice was that since the employees had finished all of the work that there was no reason to have them "sit around and do nothing". The supervisors viewed this as an incentive to get higher production rates out of the workers.
While it may be true that workers will work harder and more quickly if they have the reward of extra time off with pay, fabricating timecards is not the way to accomplish this end result.
We have written in other articles about the necessity for a government contractor to have an effective ethics compliance program. There tends to be a general belief within companies that the ethics compliance program is "the lawyers" program or “the upper management program”. While it is certainly necessary that the senior management of the company be onboard and actively encourage compliance with the ethics program, it is absolutely essential that lower level management and supervisors sign on fully. The ultimate responsibility for the success or failure of a program lies with the company’s managers and supervisors from the top down and the bottom up!
By his actions and his words, the supervisor establishes the ethical tone for the work place as employees will frequently set their own standards to reflect those of their immediate bosses. In the current case, a number of workers questioned whether it was proper for supervisors to fill out timecards indicating the workers had worked more hours then they had actually worked but "because that was what the boss said ", the workers chose to not report the time card fabrication and do nothing.
Because of this failure to properly follow timecard procedures, this government contractor is facing adverse action on two fronts. First, there is a failure of a part of its compliance program to bring about proper ethical conduct. Secondly, while a number of the "excess" hours were charged to fixed price contracts, some were charged to cost type contracts. Accordingly, the customer has been charged for hours that he did not receive. This is fraud.
A company can institute a "bonus program" wherein supervisors can reward their workers for extraordinary effort by giving them paid time off. However, this needs to be a formalized program with authority granted at upper management levels and time properly charged to the "bonus" time code. Flagrantly filling out timecards that indicate more hours worked than the workers actually worked is a fraud on the company and can constitute a fraud against the United States with attendant severe penalties.
Vandeventer Black welcomes questions on how to set up and monitor an effective Ethics Compliance Program and in particular the proper use of time cards
Questions?
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This article is meant to bring awareness to this topic and is not intended to be used as legal advice.