Employee purchase cards (P-Cards) are work credit cards that are provided by most universities and state governments to many of their employees for smaller, routine purchases. These P-Cards can streamline the process of making purchases, saving the organization both time and money. P-Cards are much more cost effective than using the full procurement processes (soliciting three bids, etc.) for smaller purchases, such as an item costing $15. The challenge for most organizations is that while P-Cards can provide a cost-effective and efficient tool for small dollar purchases, they can also easily be abused. Managers and auditors are tasked with reviewing P-card purchases but often, given their other workloads, these purchases are not adequately reviewed. Employee Purchase Cards – Why Use Them? In a typical procure-to-pay process, five percent of transactions account for 90% (or more) of the total spend. These larger transactions rightfully require significant controls, contracts and approvals. P-Cards can dramatically... [Read More]
Expenses Abuse Gets Media and Tax Payers In A Froth Recent news articles out of Ohio ($4 beer dings Butler County Visitors Bureau in state audit) highlights the reputational risks that can impact an organization when it fails to monitor spending for non-compliance or expenses abuse. The audit uncovered a single $4 Beer which was part of a payment for $11,554. While the applicable statues clearly prohibit this purchase from being reimbursed, it is important to put this in perspective. This was a single $4 purchase and it represents 0.035% of the total amount. There are many ways this reimbursement request could have been identified. If the expense request had been stopped because a supervisor had noticed the purchase during the approval process, or an automated system had identified the non-compliant item then the requestor would simply have removed the item, and the remaining amount would have been reimbursed. In this... [Read More]
Are your analytics delivering results? The word “analytics” means different things to different people. Depending on the analytical maturity of your organization, analytics could mean reports on your performance, analytics could mean predictive models, or it could mean fully optimized analytic decisions. No matter where you are on that spectrum, many organizations report that while they have many different analytical systems or models, they don’t know how well they are performing. Many times organizations implement expert or predictive models with the expectation of enhanced operational performance, but they don’t measure the results, and don’t assess if the model is delivering the business value needed and expected. Measuring and tuning models as is important as implementing models. Without ongoing monitoring they can fail to achieve the desired results. If you, as a leader of an organization wants to assess your analytics, there are a number of steps you can take. 1)... [Read More]
There are significant opportunities for government and higher ed institutions to reduce their procurement and travel expenses using predictive analytics. Historically, building analytical models had been a challenge due to the complexities of analyzing data across the entire procure-to-pay cycle. Data are often disjoined across ERP, Procurement, Travel, and P-Card systems. Even when data is available it is often spread across multiple tables within complex databases. Also, once data is extracted, it is stored in different formats, and it can require significant manual manipulation. However, new tools are in place that can now automatically consolidate this data, and analytics can provide valuable insights to reduce costs and risk to organizations. Through this risk modeling, waste, fraud and abuse can be found and corrected, before any financial outlays take place, saving millions of dollars per year. Here are five ways to save money every government department should know about. 1) Use Scores... [Read More]
Social Network Analysis (SNA) tools hold the potential to help tax and revenue agencies identify non-compliance and tax fraud. These tools have been proven to be effective in fraud detection¹, but to date haven’t been utilized to any large degree at tax agencies. This blog describes what an SNA tool is, and how it can be utilized at a tax agency. Social Networking Analysis Explained SNA is an analytic approach of correlating people, entities and relationships to determine how tightly an individual or business is related to others who have known compliance issues. These relationships can be from shared phone numbers, physical addresses, bank accounts, credit cards, or any other connection that is available through data capture. The results of the SNA can show the risk that a specific individual or business presents, based on their relationship with others who have known issues within the network. As can be seen... [Read More]
Most tax and revenue agencies have strong collection operations, anchored by a large, dedicated staff of collectors supported by laws that allow for streamlined enforcement actions. Outside of tax agencies you often find departments with significant receivables, but without the mission, authority, or focus on collecting these receivables. Centralizing collections in government is therefore a significant opportunity when we focus on the area of non-tax receivables. In fact, government agencies can increase revenue by tens or even hundreds of millions of dollars each year through centralized collection activities. These new efficiencies also deliver on the challenges that State and municipal governments face to do more with less and to improve the customer experience without increased taxes or additional fees. So Why Centralize? There are many reasons to centralize collection operations: Economies of Scale. Typically, only the tax agency has sufficient debt to get the economies of scale needed to optimize collection operations.... [Read More]
Government agencies are often challenged in their effort to optimize communications with their citizens. Most government executives want to increase the frequency and quality of their interactions, but tightening budgets have resulted in fewer interactions, not more. They’ve stopped sending annual booklets, they send fewer reminder notices and wait for consumers to call them rather than proactively reaching out. Reduced communication results in lower compliance and an increase in downstream problems. At the same time, more people than ever are using smart phones (SMS, email and web apps) and other electronic communication tools. Recent data from Deloitte tells us that 77 percent of Americans own a smartphone and its usage is so ingrained in our daily routine that 61 percent of Americans check their smartphone within five minutes of waking up. How long after you wake up do you check your smart phone? With this as a backdrop, it’s no... [Read More]
