Do You Know When Your P-Cards Go on Vacation?
Let’s face it, accidents happen. For instance, I was at a gas station and saw a dad drive up in his SUV. Camping gear was loaded on the roof and there were two small children in his car, both vying loudly for his attention. He fumbled with his wallet trying to find his credit card and then somehow managed to shove the card in the pump.
Now, what are the chances this man accidentally used his corporate card instead of his personal card? Would you be able to tell that this purchase was made on a company card while the cardholder was on vacation? Or would you have to rely on the employee’s honesty and ability to remember what happened when he returned to the office?
Misuse is Going Undetected
If a cardholder does not remember to report his error, would audit detect this? Unfortunately, there is a good chance the error will go undetected as most auditors rely on data samples. Even if this transaction made it into the P-Card data sample, if gas is an approved purchase for employees, how would the auditor ever know this purchase was made while this employee was on vacation?
So this dad’s one time mistake slips through the cracks, not a big deal. But what if he eventually realizes his mistake was never caught and starts taking advantage of the situation or even worse, shares the information with a colleague? How costly could this one little mistake become?
If Misuse Is Going Undetected, So Is Abuse
Earlier this year, Jacqueline Louise McCowan, former Territory Manager for distributor Bacardi Lion Pty Ltd was accused of charging more than $100,000 in personal purchases on her corporate credit card. She began in this role in 2008, and by late 2010 she was allegedly regularly spending between $4,000 – $8,000 on her corporate card per month. Facts presented in court said the company tracked credit card spending through the use of hard copy receipts and only occasional random audits were conducted.
What Gets Monitored Gets Noticed
With continuous monitoring technology, companies are empowered to not only catch the little mistakes, but also immediately detect any P-Card abuse. For example, a company using a continuous monitoring platform would have been immediately notified of Ms. McCowan’s first potentially inappropriate purchase. This timely interaction could make the difference in a company’s ability to re-coup their money and prevent employees from making inappropriate purchases in the future.
But what about the dad who used his P-Card for a gas purchase while he was on vacation? Through cross application monitoring of transaction and HR data, the gas purchase would be immediately detected and flagged as an exception.
Find out how to prevent non-compliant transactions and improper payments with CaseWare.
About Andrew Simpson:
Andrew Simpson is Chief Operating Officer at CaseWare Analytics, with specific responsibility for financial crime management solutions. Andrew has over 20 years’ experience in building technology and consulting businesses in the finance, audit and security space with specific focus on data science and forensics.