by: Scott Baranowski, CIA

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "by: Scott Baranowski, CIA"

Transcription

1 Community Bank Auditors Group A/P, Procurement and Credit Card Internal Controls June 4, 2014 by: Scott Baranowski, CIA MEMBER OF PKF NORTH AMERICA, AN ASSOCIATION OF LEGALLY INDEPENDENT FIRMS 2013 Wolf & Company, P.C.

2 Agenda Accounts Payable and Corresponding Internal Controls Procurement and Credit Cards and Corresponding Internal Controls Case Study 2

3 Fraud Detection Key Findings and Highlights of the 2012 Report to the Nations include: CFE 3

4 Accounts Payable 1. Reconcile your accounts payable entries and your bank s related DDAs monthly. 2. Look for invoice oddities. 3. Check out check amounts. 4. Vet your vendors. 5. Smile and dial. 6. Trace transactions. 7. Be aware of the human factor. 4

5 Data Mining Use accounting, database, and spreadsheet software to go through your accounts payable quickly and accurately, looking for signs of trouble. Detection tip: Merge the files for your employees and your vendors to scan for matching addresses, phone numbers, bank account numbers, and other identifiers. 5

6 Accounts Payable Risks Risk Red Flags Tools/Best Practices Misdirected Payments Payments are misdirected to someone posing as a legitimate vendor. No proper documentation or approval of additions, changes, or deletions to vendor master file. Verify that all changes to vendor records (name, address change, bank account) are submitted by an authorized vendor signatory, and approved by an agency signatory. This is to prevent theft or misappropriation of funds. Vendor addresses do not agree with vendor approval application. Segregate duties between processing of accounts payable invoices and updates to vendor master files. 6

7 Accounts Payable Risks Risk Red Flags Tools/Best Practices Duplicate Payments A Red Flag for duplicate payments is spending in excess of budgeted or normal amounts. Interestingly, a vendor's failure to claim a discount due might also indicate that he has been paid twice and doesn't want to engender additional review of his account. Convert payments to ACH or other electronic methods - ACH or electronic payment methods take more time to initially establish compared to simply printing a check to a vendor thus are less likely to include fraudulent transactions. Credit balances in the accounts payable subsidiary ledger might indicate a duplicate payment. 7

8 Accounts Payable Risks Risk Red Flags Tools/Best Practices Overpayment Excessive purchases of unneeded items. Frequent shipments to P.O. boxes. Weekend or holiday delivery dates on invoices. Same person signs both the purchase order and the receipt. Data analytics for: Vendor Summary Totals Period Comparison Descriptive Statistics / Benford s Law Analysis Above Average Payments To A Vendor Duplicate Payment Testing Employee to Vendor Address Match Payments Made After Period End for Valid Liabilities at Period End Identify Exceeded Purchase Orders 8

9 Benford s Law 9

10 A/P Overpayment Prevention Tools Reconcile checking accounts promptly. Keep blank check stock and signature stamps under lock and key. Centralize your check writing function to minimize the need for review. Immediately update related policies, procedures and controls when there is a change approval authorizations. 10

11 Accounts Payable Risks Risk Red Flags Tools/Best Practices Kickback Scheme Consistent preferential (early) payments to one vendor. Separate check writing and checking account reconciliation. Look for invoices that do not have the folds that come from having been mailed. No folds, may point to potential fraud. Sequential invoice numbers from the same vendor or invoice numbers with an alpha suffix. Payments made based on copies of invoices, not originals. Vendor invoices are received by department other than accounts payable (purchasing). Never have the person who writes the checks also be the person who reconciles the checking account, this is asking for trouble. Tax ID numbers on the vendor invoice reinforce the invoice's legitimacy. Segregate duties between processing of accounts payable invoices and updates to vendor master files. 11

12 A/P Takeaways Prevention is the best remedy: Monthly reconcile accounts payable and your DDA Regularly review accounts payable for red flags Rotate different employees through the job of paying bills with the help of required cross-training Consider mandatory vacations for workers in that department. 12

13 Cards 13

14 Best Practices in Corporate Card Protection Misuse of corporate payment cards by employees is not typically considered fraud by card issuers; therefore, the company is responsible for any loss. It is imperative, then, that organizations have prevention processes in place. 14

15 Fraudulent Payment Methods 15

16 Loss by Payment Method 16

17 Card Types Procurement/Purchasing T&E Ghost or Virtual One Card Fleet 17

18 Card Frauds by Type 18

19 P- Card Risk P-Cards Risk Red Flags Inappropriate segregation of duties. Purchase/payment limits higher than required. Refusal of cardholders to accept transfers or promotions. Increasing costs of supplies from year to year. Controls over vendor type non-existent. 19

20 Card Red Flags Fraud investigations identified a series of red flags: Monthly reconciliations were always late or not performed. The person may be attempting to avoid any review of the purchases made. Certain receipts were not included in the monthly reconciliation. The individual had been placed on probation for performance issues. The person may believe he or she is about to be terminated and has nothing to lose by misusing the p-card. 20

21 Card Red Flags The employee presented several reconciliations at a time or stated that the reconciliations needed to be signed quickly due to a deadline. This technique reduces the amount of time for review, thus allowing unauthorized transactions to be hidden. The employee submitted receipts with a long list of purchase items. Personal items can be hidden within lengthy lists. Purchases were made after business hours from restaurants, gas stations or other merchants. The person can use the excuse that it was a mistake and used the wrong card. Supervisors were not taking the time to examine the monthly reconciliation. The supervisor trusts the person or has too many more-important tasks to perform. 21

22 Preventative Controls The following preventive controls should be in place for any p-card program: Background checks: Giving an employee a p-card is tantamount to providing the cardholder access to one of the organization's most liquid assets: cash. Dollar limits: Tailor the limits to each cardholder, reduces the total dollars at risk. 22

23 Preventative Controls Merchant Classification Codes: MCC should be used to prohibit transactions at various establishments, such as cash advances, liquor stores, big box stores and movie theaters. Probation: Place the p-card on hold status until the person is off probation. Education: Educate all p-card holders, administrators and supervisors on their card-related roles and responsibilities on an annual basis. At the conclusion of the education, all p-card holders must sign an updated cardholder acceptance form that reiterates the appropriate uses of a p-card. See Exhibit A 23

24 Detective Controls Reconciliation review: Perform reviews of transactions, explanations and receipts in a timely manner. The receipts should be reviewed with a specific focus on each receipt's date and time, items purchased and the reasonableness of the expenses. Placing p-card on hold status: Place the card on hold status (not allowed to make purchases) until the reconciliation has been completed, reviewed and approved by the appropriate supervisor. The approver should send an requesting the card be reactivated only after all processes are completed. Track the number of times a person is late or has an incomplete reconciliation (missing receipts). 24

25 Detective Controls Three-strike rule: If a person repeatedly abuses the p-card (for example, routine tardiness in reconciliation or charging personal items), cancel the p-card and do not allow the person to get it reinstated. Monthly reports: The overall card administrator should generate a monthly report and forward it to the appropriate manager. The report should include spending trends, potential split transactions and dollars by merchant. This will provide additional oversight regarding appropriate use. Strong policy: The policy should state clearly what the card can and cannot be used to purchase. The policy also should identify the disciplinary action for accidental misuse versus intentional misuse. 25

26 Detective Controls Anonymous tip line: As outlined in the Association of Certified Fraud Examiners (ACFE's) 2010 Report to the Nations, most frauds are discovered as the result of a tip. A tip line allows employees to report suspected p-card misuse. 26

27 No Control Framework Is 27

28 Purchasing Cards: Still a Prime Target Among the many techniques used in perpetrating employee corporate card fraud are: Misuse: A true cardholder uses the card for purchases not authorized by the company. Embezzlement: A person within the company with authorized access to credit card information uses that information to defraud the company. False fraud: The true cardholder claims charges are invalid in order to get out of paying or to avoid reparations at work. 28

29 Fraud Attacks 29

30 Company Types 30

31 J.P. Morgan Survey Identified key internal measures as most important in detecting and preventing corporate credit card fraud: Secure senior management to champion your card compliance program and work to foster full company buy-in. Create checks and balances via logical segregation of responsibilities (e.g., purchase request, authorization and execution). 31

32 J.P. Morgan Survey Support consistency across the organization Mandate training for all card users and managers Establish preventative controls upfront, such as transaction and monthly limits and the blocking of unauthorized vendors. Partner with an issuer that provides Web-based payment management tools, including enhanced reporting and real-time visibility into spending. 32

33 J.P. Morgan Survey Audit for red flags spending limits, off-hour purchases or purchases of a personal nature. Foster cooperation that encourages cardholder feedback. Conduct peer reviews before official audits to mitigate improper card usage and help support Sarbanes- Oxley requirements. Network to learn valuable lessons from other program administrators. 33

34 J.P. Morgan Survey One way that companies are reducing card fraud is through the use of Single-use Accounts. A Single-use Account is an electronic credit cardbased payment solution that acts like a check. Combining these factors contribute to a much reduced level of fraud. 34

35 Case Study Stealing Funds for a Nest Egg An executive assistant uses a corporate credit card, gift checks, and an online payment account to embezzle US $1.5 million. Paul C. Sutphen, CPA, CFE Partner, RGL Forensic Accountants & Consultants Exhibit B 35

36 Stealing Funds for a Nest Egg- Lessons Learned 1. Allowing employees to charge personal items on a company account is never a good idea. 2. A lower threshold likely would have required more frequent approvals by Collins supervisor. 3. Accepting only the marketing expense form and payment coupon as support for the charges. 4. Poor control over access to the president s computer. 5. Having a supervisor inspect or have the opportunity to inspect billings, bank statements, and other relevant documentation before the responsible employee receives the information. 36

37 Stealing Funds for a Nest Egg- Lessons Learned 6. Couple authorization for expenditures with another form of control. 7. Collins boss received a periodic report directly from accounts payable showing expenditure approvals, it may have deterred her from exceeding the approval threshold, possibly reducing the amount she stole. 8. Had the Audit Department maintained a stronger presence at the Build Right division, it would have established a perception of detection that may have deterred Collins from her fraudulent activities. 37

38 3 Essential Controls 1. A formal credit card policy. 2. Substantiation. 3. Regular statement reviews. 38

39 Final Thoughts Additional controls to remember: Set monthly and overall credit limits for all employees who are issued credit cards. Perform initial and annual credit checks on all employees who are issued a credit card. Disallow cash advances. Set up monitoring rights with the credit card issuer to allow online review and notification of any unusual activity. Compare expense amounts to prior periods and to budgeted amounts. 39

40 Thank You Scott Baranowski, CIA Director, Internal Audit Services

P-Card Fraud Controls. Introduction

P-Card Fraud Controls. Introduction Introduction According to 2013 Association of Financial Professionals (AFP) Payments Fraud and Survey, the second most targeted payment type for fraud was corporate/commercial purchasing cards. 29% of

More information

Using Technology to Automate Fraud Detection Within Key Business Process Areas

Using Technology to Automate Fraud Detection Within Key Business Process Areas Using Technology to Automate Fraud Detection Within Key Business Process Areas 2013 ACFE Canadian Fraud Conference September 10, 2013 John Verver, CA, CISA, CMA Vice President, Strategy ACL Services Ltd

More information

Accounts Payable Best Practices

Accounts Payable Best Practices Accounts Payable Best Practices Presented by: Eddy Castaneda, CPA, MBA Accounts Payable Best Practices Top Practices AP Top Practices Document your current AP procedures Can identify overlapping work Can

More information

Raising Trust Fraud Prevention. Presented By: Kirk Vanderslice, CPA

Raising Trust Fraud Prevention. Presented By: Kirk Vanderslice, CPA Raising Trust Fraud Prevention Presented By: Kirk Vanderslice, CPA www.kirk@stanfieldodell.com July 16 th, 2015 1 Costs of Fraud to Your Organization Financial Costs 1 The median loss caused by frauds

More information

Avoiding Theft in Your Nonprofit Ohio Attorney General Mike DeWine

Avoiding Theft in Your Nonprofit Ohio Attorney General Mike DeWine Avoiding Theft in Your Nonprofit Ohio Attorney General Mike DeWine 1 Dear Nonprofit Leader, The single greatest asset of a nonprofit is arguably its reputation. When theft or misappropriation of assets

More information

Legal Lunch with Laura. Laura L. Rubenstein, Esq. Offit Kurman, P.A

Legal Lunch with Laura. Laura L. Rubenstein, Esq. Offit Kurman, P.A Legal Lunch with Laura a Laura L. Rubenstein, Esq. Offit Kurman, P.A. 410.209.6433 lrubenstein@offitkurman.com 2015 Lunch Dates Webinars will be scheduled once a quarter on the third Tuesday of March,

More information

PURCHASING CARD POLICY AND PROCEDURES

PURCHASING CARD POLICY AND PROCEDURES PURCHASING CARD POLICY AND PROCEDURES 1. PURPOSE To establish policies and procedures for procuring goods and/or services using a Purchasing Card. Purchasing Cards are referred to throughout this policy

More information

Fraud Detection and Prevention

Fraud Detection and Prevention Fraud Detection and Prevention Financial Management Advisory Council August 28, 2014 Sarah Mahugh, CPA, MBA Financial Audit Audit Manager Overview Fraud trends Fraud Risks and internal controls Case Studies

More information

Miami University Purchasing Card Policy & Procedure

Miami University Purchasing Card Policy & Procedure Miami University Purchasing Card Policy & Procedure MAY 22, 2015 1 Table of Contents Program Purpose... 3 Overview... 3 Advantages... 4 Getting Started- Card Application & Activation... 4 Capabilities,

More information

Making Your Fraud Vision 20 / 20. Thomas R. Strause, CIA, CFE, CBA, CISA, CFSA, CICA Partner FOS tstrause@fosaudit.

Making Your Fraud Vision 20 / 20. Thomas R. Strause, CIA, CFE, CBA, CISA, CFSA, CICA Partner FOS tstrause@fosaudit. Making Your Fraud Vision 20 / 20 Thomas R. Strause, CIA, CFE, CBA, CISA, CFSA, CICA Partner tstrause@fosaudit.com 610-603-5603 Topics to be Covered + Summary of Fraud Statistics ACFE 2014 Report + Current

More information

Fraud Prevention: The Prevention and Detection of Fraud Begins with You

Fraud Prevention: The Prevention and Detection of Fraud Begins with You Fraud Prevention: The Prevention and Detection of Fraud Begins with You Takeaways What is fraud? Definition Facts Four factors Fraud risk assessment Four evaluation criteria Common fraud schemes Case studies

More information

Travel Card Policy and Procedure Manual

Travel Card Policy and Procedure Manual Policy and Procedure Manual Table of contents 1. Introduction... 3 2. Reason for Policies and Procedures... 3 3. Who Needs To Know the Policies and Procedures... 3 4. Definitions... 3 5. Contact Information...

More information

Recommendations for Improving Purchasing Card Procedures

Recommendations for Improving Purchasing Card Procedures Recommendations for Improving Purchasing Card Procedures I. Cardholder Issues: 1. Receipts are not provided for all card charges. A. Current Policy Statement: The Cardholder must: Obtain all sales slips,

More information

WVU FOUNDATION & UNIVERSITY PURCHASING CARD PROGRAM POLICIES & PROCEDURES. Updated October 2012

WVU FOUNDATION & UNIVERSITY PURCHASING CARD PROGRAM POLICIES & PROCEDURES. Updated October 2012 WVU FOUNDATION & UNIVERSITY PURCHASING CARD PROGRAM POLICIES & PROCEDURES Updated October 2012 Introduction This document contains the guidelines applicable to the WVU Foundation, Inc. Purchasing Card

More information

KAREN E. RUSHING. Audit of Purchasing Card Program

KAREN E. RUSHING. Audit of Purchasing Card Program KAREN E. RUSHING Clerk of the Circuit Court and County Comptroller Audit of Purchasing Card Program Audit Services Jeanette L. Phillips, CPA, CGFO, CIG Director of Internal Audit and Inspector General

More information

Managing the Risk of Employee Theft

Managing the Risk of Employee Theft This tool accompanies Lessons for Financial Success available at mgma.com/lessons. Lessons is a free, easy-to-use guide for office administrators and physicians who manage their own practices but may not

More information

TARLETON STATE UNIVERSITY PROCUREMENT CARD

TARLETON STATE UNIVERSITY PROCUREMENT CARD TARLETON STATE UNIVERSITY PROCUREMENT CARD USERS GUIDE February 2008 INTRODUCTION How the Program benefits Cardholders as well as Tarleton State University: Allows cardholders to obtain goods and services

More information

Accounts Payable Fraud & Risk Reduction

Accounts Payable Fraud & Risk Reduction Accounts Payable Fraud & Risk Reduction Implementing a Proactive Position Accounts Payable Fraud & Risk Reduction Implementing a Proactive Position Accounts Payable Fraud & Risk Reduction Implementing

More information

Controls should be appropriate to the scale of the assets at risk and the potential loss to the University.

Controls should be appropriate to the scale of the assets at risk and the potential loss to the University. POLICY SUPPORT PAPER MANAGING THE RISK OF FRAUD Risk and Controls in Specific Systems Purpose of the Paper The purpose of this paper is to provide guidance to managers and supervisors on controls that

More information

Combating Fraud. Pam Miller Education Director & Editor :: IOFM

Combating Fraud. Pam Miller Education Director & Editor :: IOFM Combating Fraud Pam Miller Education Director & Editor :: IOFM Fraud It s a Multi-Billion Dollar Business ACFE (Association of Certified Fraud Examiners) publishes global fraud studies every other year

More information

THE EVERGREEN STATE COLLEGE

THE EVERGREEN STATE COLLEGE The Evergreen State College Procurement Card Guide JP Morgan Chase VISA THE EVERGREEN STATE COLLEGE PROCUREMENT CARD HANDBOOK For Cardholders & Authorized Users Card Custodians Approving Officials Rev

More information

Purchasing Card Program

Purchasing Card Program Purchasing Card Program User Guidelines University of North Alabama Procurement Department Created: March 2008 / Updated 7/16/2015 University of North Alabama Purchasing Card Program 1 Table of Contents

More information

Purchasing Card Procedure Manual

Purchasing Card Procedure Manual Purchasing Card Procedure Manual Draft 05/26/11 Table of Contents PURCHASING CARD PROGRAM... 3 ACQUIRING A PURCHASING CARD... 3 TRAINING... 4 ACTIVATION AND RENEWAL... 4 CARDHOLDER ROLES & RESPONSIBILITIES...

More information

THE ABC S OF DATA ANALYTICS

THE ABC S OF DATA ANALYTICS THE ABC S OF DATA ANALYTICS ANGEL BUTLER MAY 23, 2013 HOUSTON AREA SCHOOL DISTRICT INTERNAL AUDITORS (HASDIA) AGENDA Data Analytics Overview Data Analytics Examples Compliance Purchasing and Accounts Payable

More information

US BANK VOYAGER FLEET CARDHOLDER AND ADMINISTRATION POLICIES AND PROCEDURES FOR PACE UNIVERSITY-OWNED AND -ASSIGNED VEHICLES

US BANK VOYAGER FLEET CARDHOLDER AND ADMINISTRATION POLICIES AND PROCEDURES FOR PACE UNIVERSITY-OWNED AND -ASSIGNED VEHICLES US BANK VOYAGER FLEET CARDHOLDER AND ADMINISTRATION POLICIES AND PROCEDURES FOR PACE UNIVERSITY-OWNED AND -ASSIGNED VEHICLES Table of contents.1 Introduction... 2.2 Use of the Fleet Card... 3.3 User Record-Keeping

More information

Fraud: Real Stories, Real People, Real Impact

Fraud: Real Stories, Real People, Real Impact Fraud: Real Stories, Real People, Real Impact Chris Harper, CPA, MBA Senior Manager Types of Fraud Asset misappropriation Fraudulent financial reporting Identity theft Detection Skills The Fraud Triangle

More information

Procurement Card Policy and Procedures Manual

Procurement Card Policy and Procedures Manual Department of Administration Procurement Card Policy and Procedures Manual DOA Card Administrators: Office of Fiscal Management 919-807-2458 919-807-2444 Main - 919-733-0021 Fax 1 Revised 04/29/2011 Contents

More information

Liberty County School District Purchasing Card Procedures

Liberty County School District Purchasing Card Procedures PURCHASING CARD POLICY All purchases made using the Purchasing Card must be for official school business and in accordance with the District procurement code. The card must not be used for personal expenditures

More information

FINANCIAL CONTROLS POLICIES AND PROCEDURES FOR SMALL NONPROFIT ORGANIZATIONS

FINANCIAL CONTROLS POLICIES AND PROCEDURES FOR SMALL NONPROFIT ORGANIZATIONS By Cindy Cumfer NOTE: These policies and procedures are designed for small nonprofits that do not have an administrator with financial expertise. They are set up to divide the fiscal control roles between

More information

COLORADO SCHOOL OF MINES CONTROLLER S OFFICE PROCUREMENT CARD HANDBOOK

COLORADO SCHOOL OF MINES CONTROLLER S OFFICE PROCUREMENT CARD HANDBOOK COLORADO SCHOOL OF MINES CONTROLLER S OFFICE PROCUREMENT CARD HANDBOOK Revised November 2014 Table of Contents Introduction... 3 Who Can Participate in the Procurement Card Program?... 3 Responsibilities...

More information

FRAUD PREVENTION STRATEGIES FOR HEALTH CARE A FORENSIC ACCOUNTANT S PERSPECTIVE

FRAUD PREVENTION STRATEGIES FOR HEALTH CARE A FORENSIC ACCOUNTANT S PERSPECTIVE FRAUD PREVENTION STRATEGIES FOR HEALTH CARE A FORENSIC ACCOUNTANT S PERSPECTIVE CPAs & ADVISORS experience reach // S. Todd Burchett, CPA, ABV, ASA, CFF, CFE Partner tburchett@bkd.com 210.268.1932 AGENDA

More information

Policy Subject: Number Page. CREDIT CARD USE A-62 1 of 5

Policy Subject: Number Page. CREDIT CARD USE A-62 1 of 5 CREDIT CARD USE A-62 1 of 5 Purpose: The purpose of this policy is to establish guidelines for the activation, management, and use of credit cards in the conduct of official County business. As used in

More information

Cash, Petty Cash, Change Funds, and Credit Cards

Cash, Petty Cash, Change Funds, and Credit Cards CASH As public servants, it is our responsibility to safeguard taxpayer s dollars while adhering to laws and regulations governing processes over cash handling. Internal controls over cash are necessary

More information

Wheaton College. Updated November 2012. Park Hall, Room 205 Park Hall, Room 202 Phone: 3433/3438 Phone: 3439

Wheaton College. Updated November 2012. Park Hall, Room 205 Park Hall, Room 202 Phone: 3433/3438 Phone: 3439 Wheaton College Corporate Credit Card User Guide Updated November 2012 For General Information Contact: For Accounting/Reconciliation Info Contact: Business Services Office Accounts Payable Office Park

More information

Embedding Fraud Fighting Techniques into Internal Audit

Embedding Fraud Fighting Techniques into Internal Audit Embedding Fraud Fighting Techniques into Internal Audit Mary Breslin MBA, CIA, CFE What is Fraud? The Association of Certified Fraud Examiners defines occupational fraud as: The use of one s occupation

More information

BDO Consulting. Segregation of Duties Checklist

BDO Consulting. Segregation of Duties Checklist BDO Consulting Segregation of Duties Checklist August 2009 BDO Consulting s Fraud Prevention practice is pleased to present the 2009 Segregation of Duties Checklist. We have developed this tool to assist

More information

Charleston County. Procurement Card Program. Policies and Procedures Manual

Charleston County. Procurement Card Program. Policies and Procedures Manual Charleston County Procurement Card Program Policies and Procedures Manual September 2014 PARTIES INVOLVED Card Program Administrator - The central Administrator located in the County of Charleston's Procurement

More information

Fraud Awareness Training

Fraud Awareness Training UT System Administration General Compliance Training Fall 2014 This training will take approximately 20 minutes to complete Objectives What is occupational fraud Common myths about fraud Conditions for

More information

Audit of Management of the Government Purchase Card Program, Number A-13-04

Audit of Management of the Government Purchase Card Program, Number A-13-04 Audit of Management of the Government Purchase Card Program, Number A-13-04 Smithsonian Needs to Improve Preventative Controls for the Purchase Card Program Office of the Inspector General Report Number

More information

Performance Audit City s Payment Process

Performance Audit City s Payment Process Performance Audit City s Payment Process January 2013 City Auditor s Office City of Kansas City, Missouri 18-2011 Office of the City Auditor 21 st Floor, City Hall 414 East 12 th Street (816) 513-3300

More information

Strong Corporate Governance & Internal Controls: Internal Auditing in Higher Education

Strong Corporate Governance & Internal Controls: Internal Auditing in Higher Education Strong Corporate Governance & Internal Controls: Internal Auditing in Higher Education Contents Introduction Internal Audit as Trusted Advisor & Business Partner Big Ticket Items: Fraud, Revenue Leakage

More information

POLICIES AND PROCEDURES MANUAL

POLICIES AND PROCEDURES MANUAL PURCHASING CARD POLICIES AND PROCEDURES MANUAL June 2013 TABLE OF CONTENTS 1. PROGRAM OVERVIEW......3 1.1 Purpose..3 1.2 Program Benefits..3 1.3 Credit Card Company..3 2. PURCHASING CARD CONTROLS.. 3 2.1

More information

Student Fraud Project: Forensic Analysis of Personal and Corporate Bank Statements

Student Fraud Project: Forensic Analysis of Personal and Corporate Bank Statements Student Fraud Project: Forensic Analysis of Personal and Corporate Bank Statements Economic Crime and the Online World 22 nd Annual ECI Conference November 2, 2011 Moderator: Bernard Hyman Jr., Esq. (315)

More information

Fraud Detection & Prevention for Accounts Payable! Presented by Larry Holmes!

Fraud Detection & Prevention for Accounts Payable! Presented by Larry Holmes! Fraud Detection & Prevention for Accounts Payable! Presented by Larry Holmes! Accounts Payable With Fraud! Paying for goods and services that were not received! Paying inflated prices for goods and services!

More information

Fraud in the Non-Profit Organizations: Schemes & Strategies. presented by: Lynn L. Menard, CFE, CPA

Fraud in the Non-Profit Organizations: Schemes & Strategies. presented by: Lynn L. Menard, CFE, CPA Fraud in the Non-Profit Organizations: Schemes & Strategies presented by: Lynn L. Menard, CFE, CPA Common Fraud Myths in Non Profits Everyone in a non profit has an honest and charitable heart. It may

More information

Case Western Reserve University Procurement Card Full Revision TABLE OF CONTENTS. 1. General Principles. 2. Policy. 3.

Case Western Reserve University Procurement Card Full Revision TABLE OF CONTENTS. 1. General Principles. 2. Policy. 3. Case Western Reserve University Procurement Card Full Revision TABLE OF CONTENTS 1. General Principles 2. Policy 3. Documentation 4. Reconciliation and Approval 5. Security 6. Dollar Limits 7. Cardholder

More information

Internal Controls: The Key to Good Business Practices. University Controller s Office

Internal Controls: The Key to Good Business Practices. University Controller s Office Internal Controls: The Key to Good Business Practices University Controller s Office Internal Control Defined Internal controls are the methods and procedures designed by management to safeguard assets

More information

PURCHASING CARD - POLICY AND PROCEDURES SLIPPERY ROCK UNIVERSITY OF PENNSYLVANIA PA STATE SYSTEM OF HIGHER EDUCATION

PURCHASING CARD - POLICY AND PROCEDURES SLIPPERY ROCK UNIVERSITY OF PENNSYLVANIA PA STATE SYSTEM OF HIGHER EDUCATION PURCHASING CARD - POLICY AND PROCEDURES SLIPPERY ROCK UNIVERSITY OF PENNSYLVANIA PA STATE SYSTEM OF HIGHER EDUCATION 1.0 PURPOSE To establish a methodology for use and to define the limits of use of University

More information

5 Important Controls to Mitigate Employee Fraud

5 Important Controls to Mitigate Employee Fraud 5 Important Controls to Mitigate Employee Fraud LMCIT WEBINAR : FEBRUARY 10, 2015 IN PARTNERSHIP WITH EIDE BAILLY Presenter: Jason Olson, MBA, CPA/CFF, CFE, CFI Presentation Disclaimer These seminar materials

More information

PURCHASING CARD PROGRAM

PURCHASING CARD PROGRAM PURCHASING CARD PROGRAM CARDHOLDER PROCEDURES MANUAL TABLE OF CONTENTS Revised July 6, 2012-1 1 OVERVIEW & INTRODUCTION SECTION 1.0 CARD MANAGEMENT 1.01 Card Use 1.02 Restrictions & Control 1.03 Application

More information

PURCHASING CARD PROGRAM

PURCHASING CARD PROGRAM PURCHASING CARD PROGRAM CARDHOLDER POLICIES & PROCEDURES MANUAL 1 Overview and Introduction SECTION 1.0 Card Management TABLE OF CONTENTS 1.01 Card Use 1.02 Restrictions and Control 1.03 Application Process

More information

1. Program Overview. 2. Purchasing Card Controls

1. Program Overview. 2. Purchasing Card Controls POLICY: Purchasing Card Policy and Procedures REVISED DATE: APRIL 21, 2014 RESPONSIBLE OFFICER: Senior Vice President for Finance, Treasurer & CFO 1. Program Overview 1.1 Purpose The Drexel University

More information

Chapter 15: Accounts Payable and Purchases

Chapter 15: Accounts Payable and Purchases Accounting Research Manager - Audit Private Accounting Research Manager Miller Interpretations and Other Resources Knowledge-Based Audit Procedures Chapter 15: Accounts Payable and Purchases Chapter 15:

More information

Knox College PNC BANK PNC PURCHASING CARD. Policy and Procedures Manual

Knox College PNC BANK PNC PURCHASING CARD. Policy and Procedures Manual Knox College PNC BANK PNC PURCHASING CARD Policy and Procedures Manual March 1, 2014 Table of Contents Introduction General Guidelines..Page 4-5 - Card Issuance - Account Maintenance - Card Usage - Preferred

More information

Purchasing Card (P-Card) Policy and Procedure Frequently Asked Questions

Purchasing Card (P-Card) Policy and Procedure Frequently Asked Questions Purchasing Card (P-Card) Policy and Procedure Frequently Asked Questions 1. Q: What is a Purchasing Card and why would I want a card? A: A Purchasing Card is basically a credit card that can be used to

More information

PURCHASE CARD POLICIES AND PROCEDURES MANUAL

PURCHASE CARD POLICIES AND PROCEDURES MANUAL PURCHASE CARD POLICIES AND PROCEDURES MANUAL Effective July 1, 2010 Alma College Purchase Card Policies and Procedures Manual 1.0 INTRODUCTION Alma College has established a Purchase Card (PCARD) Program

More information

Frequently Asked Questions (FAQs)

Frequently Asked Questions (FAQs) Frequently Asked Questions (FAQs) The University of Maryland College Park has established a VISA credit card purchasing program. This program has been developed in coordination with the State of Maryland

More information

Department of Veterans Affairs VA HANDBOOK 4090 GOVERNMENT FLEET CARD PROCEDURES

Department of Veterans Affairs VA HANDBOOK 4090 GOVERNMENT FLEET CARD PROCEDURES Department of Veterans Affairs VA HANDBOOK 4090 Washington, DC 20420 Transmittal Sheet January 12, 2010 GOVERNMENT FLEET CARD PROCEDURES 1. REASON FOR ISSUE: This handbook prescribes procedures for use

More information

Webster County Procurement Procedures and County Clerk

Webster County Procurement Procedures and County Clerk Thomas A. Schweich Missouri State Auditor FOLLOW-UP REPORT ON AUDIT FINDINGS Webster County Procurement Procedures and County Clerk November 2014 http://auditor.mo.gov Report No. 2014-118 Follow-Up Report

More information

Types of Fraud and Recent Cases. Developing an Effective Anti-fraud Program from the Top Down

Types of Fraud and Recent Cases. Developing an Effective Anti-fraud Program from the Top Down Types of and Recent Cases Developing an Effective Anti-fraud Program from the Top Down 1 Types of and Recent Cases Chris Grippa (404-817-5945) FIDS Senior Manager with Ernst & Young LLP Works with clients

More information

ACL WHITEPAPER. Automating Fraud Detection: The Essential Guide. John Verver, CA, CISA, CMC, Vice President, Product Strategy & Alliances

ACL WHITEPAPER. Automating Fraud Detection: The Essential Guide. John Verver, CA, CISA, CMC, Vice President, Product Strategy & Alliances ACL WHITEPAPER Automating Fraud Detection: The Essential Guide John Verver, CA, CISA, CMC, Vice President, Product Strategy & Alliances Contents EXECUTIVE SUMMARY..................................................................3

More information

Fraud Awareness and Prevention Program Report

Fraud Awareness and Prevention Program Report Internal Audit Department Fraud Awareness and Prevention Program Report Project 2009-263 A Review of Fraud Awareness, Prevention, Detection and Risk Mitigation Practices in Landfill Operations, Central

More information

Fraud Control Theory

Fraud Control Theory 13 Fraud Control Theory Using a variation of a saying from the 1960s, fraud happens. Like all costs of doing business, fraud must be managed. Management must recognize that people commit fraudulent acts

More information

Purchasing Card Training. Susan Taylor (Purchasing) 801-826-5391 Cindee Clawson (Accounting) 801-826-5341

Purchasing Card Training. Susan Taylor (Purchasing) 801-826-5391 Cindee Clawson (Accounting) 801-826-5341 Purchasing Card Training Susan Taylor (Purchasing) 801-826-5391 Cindee Clawson (Accounting) 801-826-5341 Overview The Canyons School District implemented the U.S. Bank Visa Purchasing Card Program (State

More information

Purchasing Card Training

Purchasing Card Training Purchasing Card Training WELCOME Your Purchasing Card Team: Kimberley Reardon P-Card Administrator Dian Smith and Amanda Rose 1 Why have a purchasing card? Standard VISA card Liability rests only with

More information

Xavier University. Policy and Procedure Purchasing Card Program. Purchasing Card Program Policy and Procedure

Xavier University. Policy and Procedure Purchasing Card Program. Purchasing Card Program Policy and Procedure Xavier University Policy and Procedure Purchasing Card Program Table of Contents 1.0 Introduction 1.1 Purpose of this Policy and Procedure 1.2 Program Vision 1.3 University Credit Card Partner 1.4 Constituents

More information

Internal Controls Best Practices

Internal Controls Best Practices Internal Controls Best Practices This list includes the most common internal controls applied by small to medium sized businesses to their operations. It includes controls that apply to the processes most

More information

Internal Controls: Accounts Payable and Purchasing A Practical Approach

Internal Controls: Accounts Payable and Purchasing A Practical Approach Internal Controls: Accounts Payable and Purchasing A Practical Approach BRANDON CLINEFELTER CCCS INTERNAL AUDIT MANAGER Importance of Internal Controls - Make sure we stay on track - Safeguards against

More information

Internal Controls and Fraud Detection & Prevention. Harold Monk and Jennifer Christensen

Internal Controls and Fraud Detection & Prevention. Harold Monk and Jennifer Christensen Internal Controls and Fraud Detection & Prevention Harold Monk and Jennifer Christensen 1 Common Fraud Statements Everyone in government has an honest and charitable heart. It may happen other places,

More information

The one card program is controlled internally for travel/entertainment and/or procurement capabilities.

The one card program is controlled internally for travel/entertainment and/or procurement capabilities. 117 Policy 8: ONU CREDIT CARD POLICY 8.01: PROGRAM OVERVIEW Title of Policy: Program Overview Ohio Northern University provides qualified employees with a University Credit Card at University expense for

More information

Purchasing Card Policies and Procedure Manual

Purchasing Card Policies and Procedure Manual Purchasing Card Policies and Procedure Manual Revised February 10, 2015 Table of Contents 1.0 PURCHASING CARD OVERVIEW... 1 2.0 CARD FINANCIAL POLICY... 1 2.1 Terms:... 1 2.2 Limits:... 1 2.3 Allowable

More information

Internal Controls, Fraud Detection and ERP

Internal Controls, Fraud Detection and ERP Internal Controls, Fraud Detection and ERP Recently the SEC adopted Section 404 of the Sarbanes Oxley Act. This law requires each annual report of a company to contain 1. A statement of management's responsibility

More information

Purchasing Card Policy and Procedure Manual

Purchasing Card Policy and Procedure Manual Policy and Procedure Manual Table of contents 1. Introduction 3 2. Reason for Policies and Procedures...3 3. Who Needs to Know the Policies and procedures.3 4. Definitions..3 5. Contact Information...4

More information

Fraud and internal controls, Part 3: Internal fraud schemes

Fraud and internal controls, Part 3: Internal fraud schemes Fraud and internal controls, Part 3: Internal fraud schemes By EVERETT COLBY, CFE, FCGA This is the third and final article in a series by Mr. Colby on Fraud and internal controls to be carried on PD Net.

More information

Financial Services Group

Financial Services Group Fraud Detection and Prevention Presented by: Carrie Kennedy, CPA, Partner Anthony Porter, CPA, Manager 1 The material appearing in this presentation is for informational purposes only and should not be

More information

Cleveland State University Purchasing Card Policy and Procedure Revised June 2014. Program Overview

Cleveland State University Purchasing Card Policy and Procedure Revised June 2014. Program Overview Cleveland State University Purchasing Card Policy and Procedure Revised June 2014 Purpose This policy describes the proper use of a Cleveland State University (the University) purchasing card. It is in

More information

Is There Anyway to Prevent Fraud? Bill Gady, CGA CPA Partner

Is There Anyway to Prevent Fraud? Bill Gady, CGA CPA Partner Is There Anyway to Prevent Fraud? Bill Gady, CGA CPA Partner Learning Objectives: Understand how fraud can occur Learn procedures you can implement to prevent fraud Learn how to detect fraud Common Situations

More information

CREDIT CARDS CALIFORNIA STATE UNIVERSITY, EAST BAY. Audit Report 13-28 June 28, 2013

CREDIT CARDS CALIFORNIA STATE UNIVERSITY, EAST BAY. Audit Report 13-28 June 28, 2013 CREDIT CARDS CALIFORNIA STATE UNIVERSITY, EAST BAY Audit Report 13-28 June 28, 2013 Henry Mendoza, Chair Lupe C. Garcia, Vice Chair Rebecca D. Eisen Steven M. Glazer William Hauck Hugo N. Morales Members,

More information

Internal Control Guidelines

Internal Control Guidelines Internal Control Guidelines The four basic functions of management are usually described as planning, organizing, directing, and controlling. Internal control is what we mean when we discuss the fourth

More information

An Auditor s Guide to Data Analytics

An Auditor s Guide to Data Analytics An Auditor s Guide to Data Analytics Natasha DeKroon, Duke University Health System Brian Karp Services Experis, Risk Advisory May 11, 2013 1 Today s Agenda Data Analytics the Basics Tools of the Trade

More information

OCCUPATIONAL FRAUD HOW BAD IS IT? Gregory S Kollmeyer, CPA, CFE, MAcc Elliott, Robinson and Company, LLP WHAT IS FRAUD?

OCCUPATIONAL FRAUD HOW BAD IS IT? Gregory S Kollmeyer, CPA, CFE, MAcc Elliott, Robinson and Company, LLP WHAT IS FRAUD? OCCUPATIONAL FRAUD Gregory S Kollmeyer, CPA, CFE, MAcc Elliott, Robinson and Company, LLP WHAT IS FRAUD? FRAUD IS CRIMINAL DECEPTION INTENDED TO FINANCIALLY BENEFIT THE DECEIVER. OCCUPATIONAL FRAUD HAS

More information

CHAPTER 4 EFFECTIVE INTERNAL CONTROLS OVER PAYROLL

CHAPTER 4 EFFECTIVE INTERNAL CONTROLS OVER PAYROLL CHAPTER 4 EFFECTIVE INTERNAL CONTROLS OVER PAYROLL INTRODUCTION AND LEARNING OBJECTIVES Every organization, including governments, require employees to assist in meeting their goals and objectives. The

More information

Forensic Audit Building a World Class Program

Forensic Audit Building a World Class Program Forensic Audit Building a World Class Program PAUL E. ZIKMUND DIRECTOR GLOBAL INTEGRITY AND FORENSIC AUDIT 1 2012 ACFE ANNUAL FRAUD CONFERENCE ORLANDO, FL Why the Need for Forensic Audit Program In response

More information

AP 571 PURCHASING CARD COMMERCIAL CREDIT CARD PROGRAM

AP 571 PURCHASING CARD COMMERCIAL CREDIT CARD PROGRAM AP 571 PURCHASING CARD COMMERCIAL CREDIT CARD PROGRAM BACKGROUND This procedure is for the use and control of purchasing cards (a commercial credit card) for the purpose of obtaining goods and services

More information

Accounts Payable Fraud Services

Accounts Payable Fraud Services Accounts Payable Fraud Services According to research conducted by the Association of Certified Fraud Examiners (ACFE), U.S. organizations lose an estimated 7 percent of annual revenues to fraud. 1 In

More information

Anthony ISD Bank of America and American Express Card Program Policy and Procedures Manual

Anthony ISD Bank of America and American Express Card Program Policy and Procedures Manual P a g e 1 Anthony ISD Bank of America and American Express Card Program Policy and Procedures Manual Table of Contents: PURPOSE. 1.1 CARD DESCRIPTION 1.2 BILLING CYCLE 1.3 POLICY 2.1 PROCEDURES 3.1 P a

More information

MUNICIPALITY of COLCHESTER PURCHASING CARD POLICY. January 2006

MUNICIPALITY of COLCHESTER PURCHASING CARD POLICY. January 2006 MUNICIPALITY of COLCHESTER PURCHASING CARD POLICY January 2006 Purpose: Purchasing card programs are designed to provide an efficient and lowcost method of purchasing and paying for small dollar and high

More information

Steven Boyer Vice-President, Gallagher Bassett Services Inc.

Steven Boyer Vice-President, Gallagher Bassett Services Inc. Employee Dishonesty and Fraud Motive, Rationale & Opportunity Steven Boyer Vice-President, Gallagher Bassett Services Inc. Randall Wilson, CPA/CFF, CFE, Cr.FA Partner, National Practice Director Fraud

More information

MANAGEMENT AUDIT REPORT ACCOUNTS PAYABLE

MANAGEMENT AUDIT REPORT ACCOUNTS PAYABLE MANAGEMENT AUDIT REPORT OF ACCOUNTS PAYABLE REPORT NO. 04-108 CITY OF ALBUQUERQUE OFFICE OF INTERNAL AUDIT AND INVESTIGATIONS of Accounts Payable Report No. 04-108 Executive Summary Background The Department

More information

U. S. DEPARTMENT OF COMMERCE CHARGE CARD PROGRAM NARRATIVE FISCAL YEAR 2011

U. S. DEPARTMENT OF COMMERCE CHARGE CARD PROGRAM NARRATIVE FISCAL YEAR 2011 U. S. DEPARTMENT OF COMMERCE CHARGE CARD PROGRAM NARRATIVE FISCAL YEAR 2011 Agency: U.S. Department of Commerce Contact: David Carter, Procurement Analyst Email: DCarter@doc.gov Phone: (202)-482-1966 All

More information

Fighting Fraud with Data Mining & Analysis

Fighting Fraud with Data Mining & Analysis Fighting Fraud with Data Mining & Analysis Leonard W. Vona December 2008 Fraud Auditing, Inc. Phone: 518-784-2250 www.fraudauditing.net E-mail: leonard@leonardvona.com Copyright 2008 Leonard Vona and Fraud

More information

Internal Controls over Cash for Small Nonprofits

Internal Controls over Cash for Small Nonprofits Internal Controls over Cash for Small Nonprofits Internal controls may be a sensitive issue in small nonprofit organizations. These organizations are built on the concepts of honesty, truthfulness, and

More information

PROPOSAL RESPONSE FORM Use Additional Sheets as Required

PROPOSAL RESPONSE FORM Use Additional Sheets as Required Erie 1 BOCES Financial Card Services (RFP # R-081513PC) PROPOSAL RESPONSE FORM Use Additional Sheets as Required 1. Please check the card services that your proposal includes: P-Card only A/P Card only

More information

Fraud Prevention, Detection and Response. Dean Bunch, Ernst & Young Fraud Investigation & Dispute Services

Fraud Prevention, Detection and Response. Dean Bunch, Ernst & Young Fraud Investigation & Dispute Services Fraud Prevention, Detection and Response. Dean Bunch, Ernst & Young Fraud Investigation & Dispute Services Agenda Fraud Overview Fraud Prevention Fraud Detection Fraud Response Questions Page 2 Fraud Overview

More information

City of Berkeley. Prepared by:

City of Berkeley. Prepared by: City of Berkeley Berkeley Public Library Purchasing and Accounts Payable Audit Prepared by: Ann-Marie Hogan, City Auditor, CIA, CGAP Teresa Berkeley-Simmons, Audit Manager, CIA, CGAP Frank Marietti, Senior

More information

Financial Transactions and Fraud Schemes

Financial Transactions and Fraud Schemes Financial Transactions and Fraud Schemes Asset Misappropriation: Fraudulent Disbursements Fraudulent Disbursement Schemes Register disbursement schemes Check tampering schemes Payroll schemes Billing schemes

More information

Accounts Payable and Payments Policy

Accounts Payable and Payments Policy REV. 07/07/15 Accounts Payable and Payments Policy Accounts Payable and Payments Policy Purpose 1. The purpose of this policy is to establish the responsibilities, controls, authorizations and procedures

More information

FRAUD RISK ASSESSMENT

FRAUD RISK ASSESSMENT FRAUD RISK ASSESSMENT All agencies are subject to fraud risks and need to complete a fraud risk assessment for their agency at least every biennium. A detailed fraud assessment needs to be performed by

More information

Advanced Data Analytics, the Fraudsters Worst Enemy

Advanced Data Analytics, the Fraudsters Worst Enemy Advanced Data Analytics, the Fraudsters Worst Enemy Introducing Powerful Tools and Techniques to Uncover Fraud Agenda Overview of data analytics in the anti-fraud and fraud investigation context Capability

More information

INTERNAL ACCOUNTING CONTROLS CHECKLIST FOR NTMA CHAPTERS

INTERNAL ACCOUNTING CONTROLS CHECKLIST FOR NTMA CHAPTERS P R E C I S I O N INTERNAL ACCOUNTING CONTROLS CHECKLIST FOR NTMA CHAPTERS Presented at NTMA 2004 Annual Convention Palm Springs, CA February 2004 National Tooling & Machining Association 9300 Livingston

More information