All posts by Ted London

Risk & Compliance Tax Compliance; Enhancements with Analytics

Tax Compliance
Jun112019

Tax agencies have a limited amount of resources to pursue tax compliance activities (collections and audit). Because of this resource limitation, they are required to build criteria to determine which individuals and businesses to select for audit and which collection cases to focus their efforts on. Typically, this selection is based on experience that informs agency leaders on the types of businesses that generate productive audit leads and collection cases. While the selection process typically utilizes available data, cases are primarily selected based on experience, intuition and business rules, rather than using predictive, mathematically generated analytical models. Tax Compliance – Why Use Analytical Models at Tax Agencies? Predictive, analytical models produce better outputs over experienced based “expert” models by increasing the accuracy of the model. The IRS, among other tax agencies are investing in predictive analytics. This results in more productive workloads and outcomes.  Analytic models can: ·        Increase customer service by... [Read More]

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Risk & Compliance Improving Tax Office Data-Matching

tax office data-matching
May142019

It may seem like a contradiction, but in some regards, tax offices are both data rich and data poor.  Tax offices have a significant amount of data, predominantly from business registration forms and tax return filings available to them.  This means that they have financial data, employment information, corporate data, and some demographic data.  Tax agencies often have extensive data warehouses which consolidate the data they possess, allowing for extensive analyses. However, tax offices often lack additional data that would help them build stronger tax analytics to achieve their tax compliance mission.  This missing data includes demographic data, such as phone numbers, email address, aliases and a comprehensive list of physical addresses.  It also includes data which doesn’t have to be reported to tax agencies, such as bank account, property and asset information. In addition, tax agencies typically lack the ability to consolidate their data with external data because often... [Read More]

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Risk & Compliance Procure-to-Pay, 3 Ways Analytics Reduces Risks and Costs

procure-to-pay
Apr032019

There have been numerous articles throughout the year about government organizations and universities lacking the staff and tools to review 100% of their transactions. Most of the issues with procure-to-pay compliance arise because many staff reviewing transactions are more focused on completing their review than on the quality of the review. This can result in improper transactions slipping through, which has the potential to expose the organization to risk, bad audit findings and reputational damage. It is becoming clear that legacy systems and staffing simply aren’t sufficient. Analytics is critical to help monitor procure-to-pay transactions because it is fast, unbiased and can find hidden issues within the data. This article from the State of West Virginia is a perfect example: “More than 17% of Purchase Card transactions lacked sufficient documentation”.  Not all of these transactions were improper, but the lack of documentation when spread across 126,000 annual P-Card transactions in West... [Read More]

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Collections & Recovery Government Collections Analytics: 3 Ways To Collect More Money

Government Collections Analytics
Feb262019

The business of collecting debt is getting more challenging. The current environment where debtors don’t pick up the phone or answer the mail has made collections even more difficult.  And people who owe you money, likely owe money to many others and you are challenging for your fair share. It used to be if a department had a strong collection system they could collect their fair share. Now, that is just table stakes. The following article from Dataconomy discusses how government collections analytics are needed to truly increase collection performance. In addition, new collection strategies that take advantage of this analytics are needed which enable you to work smarter, not harder in order to collect more money using cost-effective strategies. Government Collections Analytics: Predictive Models – Who will Self-Cure All of us who have worked in the collections industry understand that different strategies work for different customers (“debtors”). Some debtors... [Read More]

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Risk & Compliance Government Predictions 2019: Automate, Enhance and Secure

Government Predictions 2019
Jan062019

U.S. Government Predictions 2019: Now that we have completed the 2018 election season, people are asking what is in store for 2019.  The good news is that revenues look strong, but there are a number of factors if you look deeper into the numbers.  Also, while often the first year of a legislative session occurs before our political leaders are thinking about re-elections, election cycles have apparently gotten longer, because for many American politicians, the 2020 election season has already begun. Tight Budgets Despite Increases In Overall Spending While the National Association of State Budget Officers has reported a healthy 4.3% increase in general fund spending, most of that new money is going to three places: Medicaid, K-12 education, and pension obligations.  This will likely squeeze out revenue increases in virtually all other areas.  Government will carefully scrutinize any new spending, and will be looking for proverbial “singles”, rather than “home... [Read More]

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Risk & Compliance Procure-To-Pay Analytics Make It Easy to Be Correct

Procure-To-Pay Analytics
Oct312018

I recently attended the Society for Collegiate Travel & Expense Management (SCTEM) 2018 Annual Conference.  The conference had over 200 professionals who were sharing new ideas and recent successes.  One of the benefits of working with universities is their emphasis on collaboration.  Sharing ideas and best practices is strongly ingrained in their philosophy. At the conference, I listened to many challenges as well as successful approaches that improved their outcomes.  From these sessions, it was clear to me that the best way to enhance compliance and outcomes is to make the correct procure-to-pay path the one which is easiest to use for both your customers (employees) and suppliers.  If you can make following your processes and using your tools the easiest way to accomplish what they need, then compliance will increase, and risk and costs will decrease. Procure-To-Pay Analytics – Why don’t people follow the rules? While there is always the... [Read More]

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Risk & Compliance Employee Purchase Cards: Reducing the Spend and Risk

Employee Purchase Cards
Sep272018

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]

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Risk & Compliance Expenses Abuse: What Is The Cost Of A $4 Beer?

Expenses Abuse
Aug062018

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]

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Risk & Compliance Are Your Analytics Delivering Results?

analytics delivering results
May232018

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]

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Risk & Compliance Five Ways To Save Money Every Government Department Should Know About

Five Ways To Save Money Every Government Department Should Know About
Mar272018

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]

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