Using Data Analytics to Enhance Your Anti-Corruption Sharon J. Zealey October 26, 2017

Introduction to analytics review for IFBEC Various laws worldwide prohibit corrupt payments to foreign officials for the purpose of “obtaining or retaining business.” Corporations are required to make and keep books and records that accurately and fairly reflect transactions. Non-compliance could lead to civil and criminal penalties, including imprisonment. Risk Sources Common Risk Areas Impact Solutions AP Transactions P-card payments T&L expenses Petty Cash transactions Third party payments Charity Political contributions Gifts Entertainment Sponsorships Education support Facilitating payments Government contracts Segregation of Duties Sales and Marketing Export/Import Non-compliance to Regulations & Company Policies Fraudulent/Improper/duplicate payments Segregation of Duty conflicts Ineffective review and approval mechanism Development of Policies and Procedures Training and Awareness Transaction testing and review Fraud and regulatory analytics approach should cover review of all payment methods, potential passive bribery and both government and private party contracts /transactions .

Data Analytics Methodology Highlights Data Analytics Methodology Review Big Data from disparate sources Data can be ingested from disparate ERP and T&E systems like SAP, Oracle, Concur etc. Wider coverage with linkage to external Databases like OFAC sanctions, SDN sanctions, World Bank sanctions across 50+ countries. Identification and flagging of repeat red flags, ensuring false positives are saved in system and do not reappear in subsequent red flags Machine Learning & Domain Expertise Based on common trends, market insights, etc. the rules are continuously modified Key learning from analytics is used to update the compliance policy and program of the company Digitally Enabled- (smart workflows and advance visualization) Inbuilt workflow for sample review and substantive testing – audit trail and comments can be stored in the WF Smart Workflows and Integrated Dashboards with drill-down capability Use a methodology that is in line with regulatory expectations as outlined by SEC & DOJ to implement a continuous monitoring framework for all payables and expenses with focus on expenses incurred on government and other high risk third parties.

Anti Bribery Analytics (AP and T&E) by Genpact No Test performed Analytic objective T&E AP 1 Key word search test Identify transactions that could indicate Policy/FCPA/ regulatory violations including gifts, political contributions, entertainment and charitable contributions  2 Suspicious MCC Identifies potentially-improper charges submitted by flagging merchants having a suspicious Merchant Classification Code (MCC) 3 Prohibited vendors Identify transactions with sanctioned/ prohibited vendors using external data sources 4 Unusual Expenses Identifies suspicious transactions where the report contains potential conflicting claims like Transactions on weekends and repetitive expenses with same vendor 5 Policy Compliance Identifies non reimbursable expenses / prohibited expenses in accordance with applicable Company policies. 6 Top Transactions Identifies both the largest spenders and largest transactions in each expense category like meals, events, etc 7 Suspicious Mileage Conflicting travel expense claims submitted for same day such as both air travel & car; fuel, taxi & car rental etc. 8 Duplicate Payments Identify employees charging on T&E-Card the same expense twice/ routing same expense through cash & card 9 Threshold Limit Identifies employees who consistently claim amounts just below approval thresholds, or attempt to use a large number of small currency charges to hide spending activity 10 Even Dollar Transactions Identifies all individual charges evenly divisible by a specified parameter value (e.g. 100). Even-dollar charges usually represent the purchase of gift cards, vendor advances, or other similar purchases. 11 AP Expenses Identifies T&E card expenses that should have processed through AP and AP expenses charged to T&E cards 12 Cash Transactions Identifies T&L where the employee did not use the Corporate Business Card. 14 Split Transactions Identifies employees charging amounts to the card more than once to circumvent the spending limits or hide large expenses. Splitting transactions could occur within the same employee card, with more than one card 15 Transactions with High Risk Countries Identify High risk payments to Government entities / corruption prone countries per CPI Index 16 Flip-Flop Bank Accounts / Alternate Payee Name Identify vendors with more than one change to bank account number / alternate payee name within a specified time period (if details available) 17 Payments to individuals Identify payments made directly to individuals of a company instead of the company name