DataWarehousingandAuditSelectionRichClum– OhioRogerKoss– IllinoisGideonLowe- Michigan

BiographiesandBriefIntroduction

• RichardClum- Administrator,OhioDepartmentofTaxation• 11½yearemployeewiththeOhioDepartmentofTaxation.MajorroleinoverhauloftheAuditDivision’sCaseManagementSystem, Data

AnalyticsInitiative,AuditSelectionProcessandcreationofnewauditprograms,whichincludedthedevelopmentof80+customauditmodels.CurrentlyleadsateamthatfocusesonBusinessIntelligenceandBusinessAnalysts.

• RogerKoss• 36-yearemployeewiththeIllinoisDepartmentofRevenuewherehehasservedasRevenueAuditorandAuditSupervisor.Currently aField

ComplianceDivisionManagerwhichoverseestheoperationsofapproximately300auditorslocatedwithinIllinoisandareasthroughouttheU.S.TheDivisionconductsapproximately4,000auditsperyearintheareasofSalesandUseTax,BusinessIncomeTaxandotherMiscellaneousTaxes.GraduatedfromIllinoisStateUniversitywithaBSinAccountingin1983andpassedtheCPAexamin1986.

• GideonLowe• 3yearemployeewiththeMichiganDepartmentofTreasury.PreviouslyservedinleadershiproleswithTargetandThermoFisher Scientific

intheirSupplyChaind andDistributionarea.HisteamsupportsthesupplyofdatatoallTreasuryDataWarehouseusers,andfocusesonprocessimprovementstosupportDataAnalyticsandGovernance.GraduatedfromMichiganStateUniversitywithadegreeinPackaging,andiscurrentlypursingaMastersofScienceinBusinessAnalyticsfromMichiganStateUniversity.

Ohio

DataWarehousing

• Recordandanalyzeasmanydatapointsaspossible• CaseManagement• ExternalData• OhioReturnInformation

• MeasurabledataisminedinAuditLeadManagementSystem• SeparatedbyFull-ScopeandLimitedScope• MachineLearning/PredictiveModels,TrendingModels,Post

AuditComplianceModels,ComparisonModels,Etc.

AuditSelection

• Consistsof5SpecializedAuditors

• Reviewsleadsfrom63differentanalyticalmodels• Auditpoolreducedfromentiretaxpopulationdowntoapproximately100kofmodelidentified“non-compliant”taxpayers.

• Manyofthemodelsquantifytheleadsgivingthemascore,levelofnon-compliance,orestimatedunder-reportedamount

• Leadsaredispositionedasgoodorbadandprocessedbackthroughthemodelselectionalgorithms,whichallowthemtomakemoreaccuratepredictions

• Goodleadsareplacedinaqueueandassignedtoauditorsastheyrequestwork.

• Completedauditresultsaretrackedinourcasemanagementsystemandfedbackintoourauditselectionmodels.

• Newmethodologyincreasedefficiencyby56%and29%forourtwomaintaxtypes

• Generated$90millioninrevenuefromnewprogramtypes

Illinois

DataWarehousing

• Informationobtainedfrom3rd Parties• FederalExtracts• CorporateAffiliations• W-2Data• SisterAgencyData– Intergovernmentaldatasharingagreementsarerequired

• DataAnalytics• BusinessIntelligencedata• Historicaldatabasedonpriorauditsandtypesofbusinesses

AuditSelection

• CentralizedstaffofAuditPlannerslocatedinSpringfield,Illinoisheadquarters

• Auditsareassignedalevelbaseduponvariousfactors.Auditsarethenplacedinasupervisor’sinventoryforassignmenttotheappropriatelevelofauditor

• Severalcategoriesofselectioncriteria–auditreferral,auditrequest,targetedissues,randomselection,mandatoryfollow-upaudits

• Discoveryauditorsworkonleadsestablishedbasedoncriteria

Michigan

DataWarehousing

• EnterprisewideTeradataplatform• Multipleagenciesutilizetheplatform• SupportedbycentralizedITthroughDataCenterOperations

• Approximately3000users/accounts• 150Treasurywith30TBofdata

• Varioussourcesareintegrated• IRSdata• Businesstax• IndividualIncomeTax• OtherAgencies

AuditSelection

• DatareplicatedtoSQLServerenvironmentandviewedthroughESKORT

• PopulationprovidedtoSelectionauditorsbasedonrules

• SelectionAuditorsutilizeddatafromdatawarehousetomakeselection

• IntegratingKNIMEforfurtheruseinselectionprocess

• LeveragingDataAnalyticsandGovernanceteamforimprovedauditselection