The need for technical auditing in the Zambian construction industry

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www.elsevier.com/locate/ijproman

International Journal of Project Management 27 (2009) 821–832

The need for technical auditing in the Zambian construction industry

B. Sichombo a,*, M. Muya a, W. Shakantu b, C. Kaliba a

a Department of Civil and Environmental Engineering, University of Zambia, School of Engineering, P.O. Box 32379, Lusaka, Zambiab Department of Construction Management, Faculty of Engineering, The Built Environment and Information Technology,

Nelson Mandela Metropolitan University, P.O. Box 77000, Port Elizabeth 6031, South Africa

Received 1 September 2008; received in revised form 19 January 2009; accepted 5 February 2009

Abstract

As economic crimes such as fraud, bid-rigging, bribery, collusion, coercion and extortion in the construction industry have increasedworldwide, so has the fight against them taken centre stage. To uphold the high ethical standards required in the industry, stakeholdersneed to introduce and promote proactive strategies such as technical auditing to minimise or prevent unethical practices in the construc-tion industry. This paper outlines the need and benefits of technical auditing in the Zambian construction industry. It presents results of aself-administered questionnaire survey in the construction industry in Zambia. The study established that the pre-contract stage wasmore susceptible to unethical crimes than the post-contract stage, making the appointment of technical auditors at planning stage moreappropriate. The highest ranked benefit of technical auditing was found to be client confidence, followed by enhanced accountability,reduced project costs and disputes in that order of significance. It is hoped that the results of the study may be useful in raising awarenessabout unethical practices and required prevention strategies, and assist in the development of necessary policies and guidelines for theintroduction of mandatory technical auditing on publicly funded construction projects in Zambia and elsewhere.� 2009 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Technical auditing; Unethical practices; Construction industry; Zambia

1. Introduction

The fight against unethical practices such as fraud, bid-rigging, bribery, collusion, coercion, misrepresentation offacts and extortion in the construction industry has takencentre stage worldwide. Many organisations have formedtask groups to fight the malpractices that can prove to bean impediment to development. For example:

� through its Department of Institutional Integrity, theWorld Bank has investigated cases of alleged unethicalpractices such as two Lithuanian companies debarred

0263-7863/$36.00 � 2009 Elsevier Ltd and IPMA. All rights reserved.

doi:10.1016/j.ijproman.2009.02.001

* Corresponding author. Tel.: +260 955837400; fax: +260 211230948.E-mail addresses: [email protected] (B. Sichombo), mundia-

[email protected] (M. Muya), [email protected](W. Shakantu), [email protected] (C. Kaliba).

from participation in bank funded projects followingaccusations of collusion in bidding for a US$3.28 mil-lion contract [1];� through its publication in April 2007 of the Anti-Cor-

ruption Training Manual for the Infrastructure, Con-struction and Engineering Sectors, TransparencyInternational encourages the construction industry toadopt the Transparency International’s Project Anti-Corruption System (PACS) in their contracts [2];� the Secretariat of the FIDIC Group of Africa Member

Associations (GAMA), which held its 14th GAMAConference in Gaborone, Botswana in May 2007 andwhose theme was ‘‘Engineering Services, Value for

Money” focused on ways the engineering and construc-tion industry could minimise or eliminate unethicalpractices for the client to obtain value for money [3];� through its indictment, the Office of Fair Trading (OFT)

in the UK in April 2008, accused 112 construction com-panies of bid-rigging [4]; and

mailto:[email protected]





Clientele

Manufacturing Supply

Contractor Consultancy

Fig. 1. A schematic definition of the composition of the constructionindustry.

822 B. Sichombo et al. / International Journal of Project Management 27 (2009) 821–832

� the Construction Sector Transparency Initiative (CoST)initiated in Zambia, with the support of the Departmentfor International Development (DFID), covering pub-licly financed construction projects and whose premisewas ‘‘Get What You Pay For” aimed to increase trans-parency and accountability, and as a consequenceimprove outcomes and tackle corruption in the con-struction sector [5].

As unethical practices have become sophisticated, thereis increased realisation that financial auditing alone doesnot tackle unethical practices that may be prevalent inthe construction industry. Therefore, there is need to intro-duce and implement appropriate strategies that can engen-der high standards of conduct and ethics. Financialauditing, on its own, may not be adequate to detect andcombat unethical practices in construction, hence the needfor technical auditing. Regular technical and financialauditing on construction projects could be one way ofensuring that the investment into the sector is worth thecost incurred as suggested by the formula [6]:

Technical auditingþ Financial information

¼ Total confidence:

1.1. The economy and the construction industry in Zambia

The construction industry is diverse and has many dif-ferent players. Dunkeld [7] stated that if one asked firstyear undergraduate students what they understood by con-struction, almost invariably, they would indicate that it isthe sum total of activities that take place on building sites,completely ignoring other organisations that are involvedin construction, but are not located on site. Hendrickson[8] described the construction industry as a conglomerationof diverse fields and participants that have been looselylumped together as a sector of the economy. A standarddefinition of the Zambian construction industry comprisesfive sectors namely: design; assembly; manufacturing; sup-ply and clientele [9]. The design sector, also referred to asconsultancy, is concerned with employer advice and projectmonitoring through design, contract documentation andproject supervision. The assembly sector is predominantlyconcerned with site activities and involves the physical erec-tion of facilities by contractors that implement designs bythe consultancy sector. Stemming from this function, theassembly sub-sector is commonly referred to as the con-tractor sector. The manufacturing sector produces buildingmaterials, plant and machinery for the contractor sector.The supply sector is responsible for the importation andsupply of building materials, plant and machinery. Andfinally, the clientele sector represents employers, those thatrequire the services and products of the consultancy andcontractor sectors as illustrated in Fig. 1. Solid arrows inFig. 1 denote direct contractual and broken ones represent

non-contractual supply relationships with the client in theconstruction project arrangement.

The construction industry’s share of Zambia’s GDP was10.4% in 2007 at constant 1994 prices [10]. With a popula-tion of 11.8 million, and a GDP growth rate of 6.2% in2006, the country is still classified as a Highly IndebtedPoor Country (HIPC), an indication of deep social andeconomic crisis [11].

In 2006, Zambia’s Corruption Perception Index (CPI)was 2.6 and remained the same in 2007 [12]. On a scaleof ‘0’–‘10’, where ‘10’ is highly clean and ‘0’ is highly cor-rupt, Zambia is below ‘3’, implying that corruption in thecountry is very high. For a country that is categorised asleast developed, high levels of corruption would slow downthe rate of economic development and impede governmentefforts to reduce incidences of poverty. It would, therefore,be necessary to combat practices that abuse public funds inthe construction sector through appropriate strategies suchas technical auditing.

2. Technical auditing

Technical auditing can be defined as an independent,objective assurance and consulting activity designed toassess both the effectiveness and efficiency of an organisa-tion’s operations [6]. The call for technical auditing comesat a time when there is concern about the overall quality ofconstruction products and that value for money is rarelyachieved in the industry.

Being a new practice, a general lack of capacity in vitalauditing institutions in Zambia exacerbates the unwilling-ness to accept technical auditing. Therefore, establishingtechnical auditing capacity and procedures in the countrycould be a challenge. The National Road Fund Agencyin Zambia has previously conducted technical audits onsome of its projects, most of which were carried out by for-eign firms on donor funded projects.

There are various reasons why a technical audit may becalled on a construction project. Proactive auditing iswhere the auditee initiates the process due to statutory

B. Sichombo et al. / International Journal of Project Management 27 (2009) 821–832 823

requirements such as tax compliance. Such an audit is usu-ally pre-arranged and the auditee has documentation andinformation readily available [13]. Therefore, regulatorytechnical auditing is proactive. On the other hand, reactiveauditing is usually triggered by suspicion of wrong doing. Itis unannounced and usually results into a forensic audit.Forensic auditing could be defined as the application ofauditing skills to situations that could lead to prosecutionin courts of law [13].

The commencement of an audit could be at any stage of aproject lifecycle. Construction projects can be divided intotwo development stages, with contract award or site posses-sion as the dividing point. The first stage of development,from inception to contract award, is known as the pre-con-tract stage. This stage involves design, planning and tender-ing processes. The second stage of development, fromcommencement of construction to expiry of defects liabilityperiod or final account, is known as the post-contract stage.This stage involves physical erection of a facility.

Economic crimes or unethical practices are usually con-cealed. Due to the complex nature of construction, diver-sity of skills and the sheer size of some projects, coupledwith long execution periods, it is very difficult for anyonewho does not understand construction processes and pro-cedures to uncover illegal activities. Even an informed tech-nical auditor would have to be aware of what to look forwhen carrying out a technical audit. In an effort to fightcorruption in construction, Transparency International[14] summarised unethical practices that can take placeduring the different phases of a construction project. Atpre-contract stage, prevalent unethical practices identifiedinclude [14–16]:

� fraudulent contractor qualification, where a bidder fur-nishes false documentation regarding plant and equip-ment, labour and the company’s qualifications in orderto win a contract;� initiation of complex projects by government officials or

persons in authority in order to make money by request-ing favoured contractors to add percentages to theircontract sums for the benefiting individuals;� manipulation of pre-qualification criteria by the consul-

tant so that the preferred bidder wins the contract;� leaking the estimated or lowest price to the preferred

contractor so that they could quote lower and win thebid;� consultants or owners not disclosing their interest in

companies that are tendering for contracts;� clients not disclosing adequate financial status but com-

mencing projects knowing that the works would encoun-ter financial difficulties. This practice becomes aneconomic crime when contractors offer their assets ascollateral in financially deficient projects; and� collusion, also known as bid-rigging, when competing

contractors tender at higher prices to ensure that a par-ticular contractor wins the tender.

Post-contract audits analyse differences in bids and actualconditions in terms of contract award, financial and inter-nal controls and such issues as modifications to designs.Common unethical practices at the post-contract stageinclude [14,15]:

� contractors supplying inferior, but being paid for higherquality materials;� the client bribing the consultant to delay the issuance

of a payment certificate because they do not havesufficient funds at the time the claim for payment isreceived;� fraudulently increased variation claims and the extra

money shared between the certifying consultant andthe contractor;� extortion by client’s personnel for a fee from the con-

tractor to ensure certificates are paid quickly; and� cost engineers, commonly referred to as quantity

surveyors, falsely increasing the quantities of certifiedworks in order to obtain extra money from thecontractor.

Technical audits could offer benefits to parties involvedin projects, including clients, thereby assuring value formoney. Consultants and contractors that have been sub-jected to audits and come out clean usually gain confi-dence. Benefits resulting from technical audits ofconstruction projects include [17]: lowering the cost offinance by reducing or eliminating corruption; identifyingfraud situations which could alert financiers of projects totake appropriate action; recovery of any fraudulent finan-cial loss; minimising weaknesses in project procedures, pro-cesses and administration; strengthening professionalism inthe construction industry; building construction industrycredibility and enhancing accountability to taxpayers; basisfor requesting additional funding for on-going projects;providing an independent and objective perspective so thatdecisions to expend public funds involve balanced andextensive information; availability of information for taxcompliance; availability of information in case of a dispute;and using the audit report as a communication tool amongparties to the contract.

3. Methodology

The study reported in this paper, aimed at investigatingunethical practices in construction, was undertaken over aperiod of five months from January to May 2008. Theobjectives of the study were: to investigate the natureand form of unethical practices in the Zambian construc-tion industry; their prevalence; and establish whetherexisting institutions had the capacity to expose and pre-vent such criminal activities. The study further examinedthe benefits of technical auditing, and their efficacy inreducing unethical practices in construction projects.


Whistle blowing systems, contractor blacklisting and strik-ing off consultants from their professional bodies werealso investigated on their adequacy as deterrents to uneth-ical practices.

Unethical practices are generally concealed, and as suchrespondents could give inadequate information for fear ofbeing quoted. Falsification of information supplied byrespondents was also possible if face to face interviews wereconducted. To minimise inadequacies in elicited informa-tion, a self-administered questionnaire was adopted fordata collection. Respondents were assured of anonymityand were urged to be as open as possible in order toenhance the confidence that could be derived from theresults of the study.

To ensure that the sample was representative, respon-dents were drawn from five out of the nine provinces inthe country, with a slightly higher proportion of respon-dents from urban provinces on the line of rail such as Cop-perbelt and Lusaka that have relatively higher populationdensities. A judgemental sampling approach was used forthe survey, where respondents were purposively selectedto provide a representative sample in terms of the definitionof the Zambian construction industry, i.e., consultancy,contractor, manufacturing, supply and clientele sectors.Auditing firms were also included in the sample to ascer-tain their capability in conducting technical audits. Thesampling was disproportionate, and as such the need forstratification. Sixty questionnaires were distributed with aresponse rate of 82%, which was determined to be accept-able. There is no ‘standard’ for an acceptable response rate,but published opinion indicates that for a response ratebelow 80%, bias is likely to occur, and a rate below 60%is ‘barely acceptable’ [18]. Of the responses obtained, 39%represented the consultancy, 25% the clientele, 18% thecontractor and 4% the manufacturing sectors of the con-struction industry. The auditing profession made up theremaining 14%.

The questionnaire was divided into three sections. Sec-tion A comprised general questions about respondentsand their organisations. Section B elicited perceptionsabout the prevalence of unethical practices in the Zambianconstruction industry and available preventive measures.Section C comprised questions pertinent to technical audit-ing. The questionnaire adopted closed-ended questionswith a few provisions for open-ended questions to elicitany other additional relevant information from the respon-dents [18].

4. Results of the study

Non parametric tests were used in the analysis of theresults because the survey utilized nominal and ordinalmeasurement scales. Nominal data was on types of respon-dents and surveyed organisations. In the case of ordinaldata that could be ranked, the frequency of occurrencewas computed using the following formula [19]:

FI ¼

P51

RiN i

5P5

1

N i

0BBB@

1CCCA� 100%;

where FI is the frequency index, Ri is the response type onthe Likert scale on which i ranges from 1 to 5, and Ni is thetotal number of respondents choosing response type i. Asan example, FI was computed as follows:

FI ¼ R1ðN 1Þ þR2ðN 2Þ þR3ðN 3Þ þR4ðN 4Þ þR5ðN 5Þ5ðN 1 þN 2þN 3þN 4 þN 5Þ

� �� 100;

where N5 = the number of respondents that answered ‘verycommon’ or ‘strongly agree’; N4 = the number of respon-dents that answered ‘common’ or ‘agree’; N3 = the numberof respondents that answered ‘do not know’ or ‘not sure’;N2 = the number of respondents that answered ‘rare’ or‘disagree’; and N1 = the number of respondents that an-swered ‘very rare’ or ‘strongly disagree’.

The responses from the various respondents were strat-ified so as to eliminate any bias from any given sectorwith regards to their perceptions. In order to achievethe required stratification, results from the consultancy,clientele, contractor, manufacturing and auditing profes-sion where multiplied by 0.51, 0.8, 1.11, 5 and 1.43,respectively as weighting factors. The weighting factorswere obtained by dividing the requisite proportion of20% that is one out of the five categories, for each cate-gory of respondents by its response rate. For instance,the consultancy sector’s weighting factor, (WF), was cal-culated as follows:

WF ¼ 20%

39%¼ 0:51:

4.1. Profiles of respondents

Information from the survey indicated that 29% of therespondents belonged to top management; 53% to middlemanagement; and 18% were junior managers in theirorganisations. All the respondents had experience in con-struction, with 68% having worked for more than 10 yearsin the industry. Academic profiles indicated that 54% of therespondents had a minimum of a bachelor’s degree. Thesurvey also revealed that only 52% of the respondentshad knowledge of technical auditing. Of those, 48%acquired their technical auditing knowledge through on-the-job training, 22% underwent formal training, whilethe remaining 30% fell under the ‘not applicable’ category,implying that they used other methods other than formalor on-the-job training, which they did not specify, toacquire the knowledge. The respondents had at least10 years experience within the construction industry inZambia. The profiles and experience of the respondents


suggested sufficient exposure to construction processes,making the survey data a reliable basis for discussion andanalysis of insights into construction industry practices inZambia.

4.2. Prevalent unethical practices

According to the survey, the contractor sector was per-ceived to be the most corrupt by 35% of the respondents,followed by the consultancy sector at 33% and the suppliersector in third place at 21%. The clientele sector came infourth at 10% while the manufacturing sector was the leastcorrupt at 1%. These results suggest the need for stringentmeasures in the management of contractors andconsultants.

The initiators of unethical practices were found tobe both individuals and corporate entities, according to43% of the respondents. Individuals-driven unethicalpractices came second, based on 37% of the respondentswhile purely corporate entity driven unethical prac-tices were in third place, according to 13% of therespondents.

From reviewed literature, seven pre-contract unethicalpractices were identified. These were incorporated in thesurvey to determine their prevalence in the Zambian con-struction industry. Based on their frequency indices, themost prevalent unethical practices at pre-contract stagewere ranked as shown in Fig. 2. Contractor fraudulentqualification was identified as the most prevalent and col-lusion was the least. Whereas the construction industry inthe UK ranked collusion among the top corrupt malprac-tices [20], it was the least prevalent in the Zambian con-struction industry. All the malpractices scored frequencyindices above 50%, implying that they were all quiteprevalent.

Similarly, five post-contract unethical practices identi-fied from literature were assessed to determine their prev-alence in the Zambian construction industry. Among

0%

20%

40%

60%

80%

100%

Fre

quen

cy in

dice

s (F

I)

Pre-contract une

Fig. 2. Ranking of prevalent unethical practices at pre-con

those identified, the usage of inferior quality materialswas the most prevalent with a frequency index of86.1%. Delayed issuance of payment certificates had thelowest frequency index of 51.7%. All the identified post-contract unethical practices scored frequency indicesabove 50% also, an indication that they were quite preva-lent in the Zambian construction industry. Fig. 3 showsthe ranking of the unethical practices at post-contractstage.

There was no clear distinction in the perception ofunethical behaviour among junior, middle and senior man-agement. Responses from the three groups are shown inFigs. 2 and 3. Fig. 2 indicates a slight variation in percep-tions regarding pre-contract unethical practices. Juniormanagers expressed worse perceptions of unethical prac-tices in the Zambian construction industry compared tosenior managers. This pattern was more evident in thepost-contract stage as shown in Fig. 3.

International financiers such as the World Bank haveused contractor blacklisting and consultant de-registra-tion to penalize corrupt contractors and consultants.For example: Canadian hydroelectric engineering firm,Acres International was barred for three years followingits conviction for bribery in connection with the LesothoHighlands water project by Lesotho courts; and ABHidrostatyba and AB Panevezio Statybos Trestas, twoLithuanian companies were debarred following accusa-tions of collusion in bidding for a US$3.28 million con-tract for the expansion of water supply and waste waternetworks as part of the Klaipeda EnvironmentalProject [1]. Also, the 112 construction companiesidentified for involvement in bid-rigging by OFT in theUK feared that they could be blacklisted by localauthorities from their tender lists after their case is deter-mined [4].

The study reported in this paper accessed the accept-ability of the above punitive measures as deterrents ofunethical practices in construction. It was confirmed that

thical practices

FI

Junior Mgt

Middle Mgt

Senior Mgt

tract stage as perceived by various management levels.

0%

20%

40%

60%

80%

100%

Fre

quen

cy in

dice

s (F

I)

Post-contract unethical practices

FI

Junior Mgt

Middle Mgt

Senior Mgt

Fig. 3. Ranking of prevalent unethical practices at post-contract stage as perceived by various management levels.

36%

50%

14%

0%

10%

20%

30%

40%

50%

60%

Strongly Agree

0% 0%

Agree Not Sure Disagree StronglyDisagree

Per

cent

age

agre

emen

t

Response mode

Fig. 4. Level of agreement with mandatory technical auditing.

89.8% 84.6% 82.5% 78.3%

60%

80%

100%

ncy

indi

ces


blacklisting or de-registration of contractors andconsultants would be acceptable deterrents of unethicalpractices in the industry. Contractor blacklisting receivedan 86% endorsement, while consultant de-registrationwas supported by 89% of the respondents. The highscore endorsements of the deterrents can be inter-preted as reliable indication of the acceptability ofthe strategies to reduce unethical practices inconstruction.

The study also sought to establish whether tradi-tional institutions with the mandate to audit publicconstruction projects had the capacity to carry out thisfunction. One such organisation in Zambia is the AuditorGeneral’s Office (AGO). Forty six (46) percent of therespondents indicated that AGO had no capacity to carryout technical audits, while 11% thought AGO hadcapacity and 43% were not sure. Because of the high per-centage of respondents unfamiliar with AGO capacity, fur-ther investigations would be required to establish thecapability of AGO to undertake technical audits onconstruction projects. This was also the case withtraditional auditing firms (TAFs) in Zambia, where 36%of the respondents were not sure about their capacity toconduct technical audits on construction projects. How-ever, the majority, 46% of the respondents indicated thatTAFs had no capacity compared to 18% who thought theydid.

0%

20%

40%

Client confidence

Enhanced accountability

Reduced project costs

Reduced dispute

resolution periods

Fre

que

Technical audit benefits

Fig. 5. Major benefits of technical auditing.

4.3. Technical audit procedures

Technical audit procedures such as audit entry, appoint-ment of technical auditor and mandatory auditing regula-tions that could be incorporated in contracts in theZambian construction industry were also investigated.Results indicated that 43% of the respondents preferred

the appointment of a technical auditor at the planningstage of the project life-cycle, while 20% had their prefer-ence at tender stage and the same percentage at the practi-


cal completion stage. The contract award stage was pre-ferred by 11% of the respondents while 6% were not sureat which stage of the project life-cycle technical auditorsshould be appointed.

As to when the audit should commence, 65% ofthe respondents stated that audit commencement shouldbe at the pre-contract stage compared to 24% whothought post-contract stage was more appropriate. Only3% felt audit entry should be triggered by suspicion offraud while 9% were not sure. From these results, com-mencement of a technical audit at the planning stagewould be more effective in taking care of pre-contractunethical practices as well as those in the post-contractphase.

Fig. 4 shows that all the respondents, apart from 14%who were not sure, felt that the conditions of contractshould include a clause on the requirement of a technicalaudit being executed at least once during the projectlifecycle.

Among the numerous identified benefits of technicalauditing, the four most important ones in rank order areshown in Fig. 5. Client confidence, enhanced accountabil-ity, reduced project costs and reduced dispute resolutionperiods were identified to be the major benefits in thatorder of importance.

5. Discussion of results

A common theme from the survey reported in thispaper was that corrupt practices were prevalent in theZambian construction industry and that introduction oftechnical auditing would be one way they could be cur-tailed. The study revealed that the contractor sector wasthe most corrupt in the construction industry in Zambia.The most prevalent unethical practice at pre-contract stagewas established to be the presentation of fraudulent claimsregarding contractors’ equipment, labour and companies’qualifications. If unchecked this practice could becomeentrenched in the procurement system and becomeaccepted as a way of doing business. According to Trans-parency International [21], grand corruption in Zambiawas by senior politicians. This was verified in this studyin which initiation of complex projects by government offi-cials’ was ranked as the second most prevalent economiccrime at pre-contract stage. One way this practice couldbe curtailed would be to ensure that only budgeted publicprojects were initiated. Manipulation of pre-qualificationcriteria, ranked third, could be prevented or minimisedby ensuring that procurement guidelines that are in placeare strictly adhered to. Non disclosure of client’s financialstatus becomes an economic crime when contractors utilizetheir assets as collateral on potentially problematic pro-jects due to poor or erratic funding. The study revealedthat collusion was not as prevalent in the Zambian con-struction industry compared to the UK where OFT sus-

pected 112 construction companies of bid-rigging thatcould have pushed up construction prices by about 10%[4].

The study reported in this paper established that duringthe construction phase, the most prevalent unethical prac-tice was the supply and use of inferior and cheap con-struction materials, with the contractor and consultantconniving to share the resulting financial benefits. Theleast ranked post-contract economic crime was thedelayed issuance of payment certificates. Delayed certifica-tion is detrimental to the owner because the overall cost ofthe project would increase in the end. From the frequencyindices for pre- and post-contract unethical practices, itappeared that the pre-contract stage was more susceptibleto unethical practices than post-contract activities. There-fore, stringent strategies to prevent unethical practicesthat include technical auditing need to be implementedin the pre-contract phase, particularly during the planningstage.

Views of respondents on technical audit procedureswere consistent with those from literature. The appoint-ment of a technical auditor and audit commencement atthe planning stage were seen as necessary to take intoaccount unethical practices at the pre-contract stage.Respondents in the survey advocated for pro-activitythrough mandatory requirements as opposed to reactiveauditing. There was a perception from the survey that indi-viduals were less likely to get involved in unethical prac-tices if there was a chance that such misdemeanourscould be discovered.

Several benefits of technical auditing were identified inthe study. With client confidence and accountability forpublic resources at very low levels in the Zambian con-struction industry, technical auditing was viewed as oneof the solutions to bringing back integrity into the indus-try. Reduction of project costs was ranked low amongpriority benefits. Probably, respondents felt that costsof projects were a function of market forces and thattechnical auditing would have little or no effect on thereduction of true project costs. Respondents exhibited lit-tle faith in the capability of traditional audit institutionscarrying out technical audits, and exposing and prevent-ing unethical practices in the Zambian constructionindustry.

The findings reported in this paper suggest the need fortechnical auditing as one approach of combating unethi-cal practices in the construction industry in Zambia.The study, though, had some limitations that need to betaken into consideration when interpreting the reportedfindings. Though the questionnaire was distributed to allsectors of the construction industry, one weakness wasthe non response from the suppliers, making it difficultto ascertain issues of quality of materials delivered toprojects. Often, individuals could be unknowing partici-pants in corrupt activities. Therefore, different under-standing and interpretations by respondents could


probably have had some distortions on the resultsreported in the paper. Though, as a research instrument,the questionnaire assured anonymity, it was difficultto confirm that the respondents were candid aboutunethical practices in construction which is a sensitivesubject.

6. Conclusions

The prevalence of unethical practices in the construc-tion sector in Zambia, if unchecked, could stifle thegrowth of the industry, and consequently the nationaleconomy. It could also perpetuate the existence and sur-vival of inefficient and corrupt construction companies[22]. Introduction of technical auditing, if implemented,through the appointment of technical auditors andcommencement of audits at planning stages of projects,could be effective measures in uncovering and preventingor minimizing unethical practices in the industry.Accountability in the industry would be enhanced if per-petrators of unethical practices are punished throughblacklisting, de-registration and prosecution. Increasedclient confidence could ensure improved investment inthe industry and ultimately lead to more constructionactivities.

The findings presented in this paper could prove insight-ful, useful and helpful in Zambia and other countries withsimilar economic conditions and elsewhere in the world asunethical practices have been reported in literature even inconstruction industries of developed countries. If adopted,mandatory technical auditing appears to hold the potentialto reduce incidences of unethical practices in the construc-tion industry.

7. Recommendations

Arising from the findings reported in this paper, the fol-lowing are the recommendations directed at preventing orminimising unethical practices in the Zambian constructionindustry and elsewhere in the world:

� promotion of best practice through the introduction ofregulatory technical auditing and appointment ofindependent technical auditors at pre-contract stagesof projects should be a requirement. Professional bodieswould be well advised to revise their standard forms ofcontract to include technical auditing on constructionprojects;� construction industry regulatory bodies, such as the

National Council for Construction (NCC) in Zambia,should, like the World Bank, maintain a record ofblacklisted companies where there is sufficient evidenceof their involvement in unethical practices. Blacklistedcompanies should be stopped from tendering for publicworks for a specified period. In the same vein, consulting

firms determined to be involved in unethical practicesshould be de-registered and debarred from participatingin publicly funded projects;� the construction industry in Zambia, and elsewhere in

the world, should consider the introduction of awhistle blowing system which is secure and easilyaccessible for anonymous reporting through dedicatedhotlines for construction related unethical practices,where this does not exist. The system should becentred on protecting and rewarding whistle blowersas everyone has a legal and ethical duty to blowthe whistle on an erring colleague, employer or client[23];� to enhance capacity, construction auditing units could

be established in national auditing authorities, such asthe Auditor General’s office in Zambia, that aremandated to audit all public accounts to ensure thattax-payers’ funds are properly receipted, expended andaccounted for;� national authorities responsible for regulating and

controlling public works procurements, such as theZambia National Tender Board (ZNTB) in Zambia,should ensure that only budgeted or approved publicprojects are procured. Approval documentation fromrelevant authorities such as responsible ministries orboard of directors should accompany such tenderdocumentation;� professional bodies should adopt anti-corruption poli-

cies such as the one proposed by the UK Anti-Corrup-tion Forum for the Infrastructure, Construction andEngineering (IC&E) sector [24] whose objective is toestablish effective rules and procedures to reduce inci-dences of corruption involving members and to dealeffectively with cases that do arise; and� the construction industry should adopt the Project Anti-

Corruption System (PACS) developed by TransparencyInternational. Integrity PACS are contracts betweengovernment offices and contractors for particular pro-jects. They prohibit bribery, ensure transparency in thebidding process and foresee sanctions in case ofviolations.

Appendix Questionnaire

An. investigation into the need for technical auditing in the

Zambian construction industry

For the construction industry, a technical audit is anindependent formal assessment of the extent to which aproject has followed the procedures laid down in thecontract documentation from feasibility study to physicalcompletion of the constructed facility. Generally, atechnical audit would provide an objective perspectiveon bid conditions vs. contract conditions vs. actualconditions.


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The need for technical auditing in the Zambian construction industry

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