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

2. 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 .

3. 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.

4. Anti Bribery Analytics (AP and T&E) by GenpactNo
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