Data Analytics for P-Card Programs- ACL Services Ltd

Your Trusted Partner for Audit Analytics

Copyright © 2012 ACL Services Ltd.

Using Analytics

for P-Card Programs

Peter Millar

Christopher Stewart-Smith

ACL Services

Copyright © 2012 ACL Services Ltd. 2 ACL Services Ltd.

Peter Millar Director, Technology Application

PBMillar


» Fraud, waste & abuse

» Compliance and/or controls testing

» Time-savings & efficiency

What is your primary concern within your

organization’s P-Card program?


P-Card Program Overview

P-Cards are handy!

– They reduce the overhead cost of procurement (versus PO)

– They streamline acquisition of goods and/or services

– P-Card programs introduce efficiency in procurement activities

BUT…

P-Cards are risky!

– Represent significant procurement activities subject to manual controls

– Orders placed by those outside of Supply Chain Management Department (SCM)

– Highest potential for fraud, waste, and abuse

AND…

All P-Card transactions should be subject to review

– Audit transactions for compliance with government regulations

– Protect against improper business practices

– Validate the effectiveness of the P-Card Program


Audit Analytics for P-card Program audits

Independent testing of P-card controls adherence

– Mostly manual controls and a matter of policy

Review 100% of P-card data

– Which can be very difficult with large numbers of cards and transactions

Apply automated, pre-defined analytics to critical control points

– Enabling increased efficiency, repeatability and consistency

Provide prompt notification of exceptions

– When scheduled to run on a repetitive or even continuous basis

Quantified exposure

– Providing data-driven information on the magnitude of control issues detected


Technology is critical to pinpointing potential card misuse. The use of

audit analytics and continuous controls monitoring technology from

providers such as ACL enables P-Card professionals to mitigate risk.

-Laura Flandrick, CPCP, Managing Director of NAPCP


Analytics in P-Card

BUSINESS PROCESSES ANALYTICS CONTROL OBJECTIVES

Manage Cards Invalid Employees Ensure that all cards issued are to existing employees

Duplicate Purchase Cards:

Name and Address Match

Ensure that cards are issued only once to valid, existing employees

Validate Card Limit Changes Ensure all changes to limits accurately reflect changes in requirements or

approval levels

Manage Merchants Blocked Merchant Category Codes Ensure all transactions are with authorized merchants

Debarred Merchants: Name and

Address Match

Ensure no transactions are with restricted merchants (e.g. named on

OFAC terrorist lists)

Manage Transactions Exceed Transaction Limit Ensure all transactions are within defined purchasing limits

Split Transactions – Single Card Ensure the intent of the authorization limit policy is being followed

Review & Analysis Split Transactions – Multiple Cards Ensure the intent of the authorization limit policy is being followed

Duplicate Transactions to Same

Merchant

Ensure all transactions have been accounted for only once


Chris Stewart-Smith Technology Solution Expert


Customer Experiences

Local Government: better insight for financial and procurement

policies and strengthening of internal controls

Manufacturing: identified that 50% of questionable expenses were

personal

– Card abuse cut in half in first four months, resulting in $1 million savings

Technology: six months of data—$1 million in duplicates,

employee/vendor fraud, $500K in card abuse via gift card

purchases

University: audit department saved themselves 100 hours, and

the university millions by doing a 100% review.


Analytics aside, one reliable way to reduce leakage though P-Cards

is to ‘leak’ the fact that a monitoring program for P-Cards is about to

begin: this notion on its own has reduced fraud and ‘discrepancies’ in

many companies

-Chris Stewart-Smith


Q & A
