1. Adopting a Risk-based, Data Driven Approach to Travel and Expense
Gordon Rule, Stanford University

2. The Problem Limited resources for reviewing
No ability to systematically review based on award type (Federal, Grant, Univ. funds)
No ability to review un-structured text (OCR)
Reviewing off rules created last century
No true strategies and analytics

3. The Solution
Partnered with FICO to implement a “Risk Based” approach to reduce manual intensive processes and identify fraud, waste, and abuse.
We looked at everything in a new way and light. Couldn’t create the same system and expect different results.
Started with Travel and Expense and expanded to entire procure to pay for University.

4. Flipping the Script - A “Risk vs. Rules Based” Approach
T&E Reimbursement
P-Cards
Procurement (Req & PO)
Invoices (Ext./Int billing)
Internal Audit
A Modular Approach
Generally limited to T&E Reimbursement
Traditional T&E Reviews & Audits
Risk Based Management of T&E:
Monitoring across Procure to Pay cycle
Focused on Policy Compliance (e.g. Travel & reimbursement guidelines)
Risk-based approach focusing on High Risk Areas first
High volumes of Low-risk transactions
Manageable Volumes of High-risk transactions
Sponsored award monies (Fed) not differentiated during review
Solution highlights sponsored dollars enabling risk-based review

5. Risk Based Components High Risk / Dollar Areas Risk Based Focus Area
Compliance Risks (e.g. HIPAA, Data security/Privacy, PCI, Minors, DEA)
Contractual Language, tracking & visibility
PO Leakage
Consultants, biologicals, software licenses, cloud accounts
Funding sources – Unallowable Costs
Fed vs. Non-Fed Spend, Grant T’s & C’s
Excessive Travel & Non-business related Reimbursement
Flagging abusers vs. one time, modest policy exceptions
Risk Mitigation / Cost Savings
Manual Review Rates / Costs

6. Approved, Rejected, Sent Back for Additional Work
How does it work?
Source
Systems
ERP
Approved, Rejected, Sent Back for Additional Work
Travel/
Expense
Transaction Stored
Case Generated
(if applicable)
Database
Transaction/ Case
Discovery
Strategies, Rules, & Analytic Model(s)
Procurement
Reports
Data Transformation (JSON)
P-Card
Case Review
& Disposition

7. P2P Summary Results – Likely Results
The Results
P2P Summary Results – Likely Results
Example University #1
Duplicate payments - $250k
PO Spend – T&E, P-card ($60M)
After the Fact PO (~$100M)
Low-dollar, high-risk PO (100s)
Example University #2
Duplicate payments - $150k
PO Spend – T&E, P-card ($7M)
After the fact PO ($2.3M)
Circumvent University Procurement function
Lack of price/cost analysis
Lack of support for federal award sourcing decisions
Non-competitive contracts
Collusion with suppliers
University incurs unnecessary expense (e.g. overpayments, dups)
Addressable P2P Risks