Transcript Len Stafford presentation - Corruption Prevention Network

DATA MINING
DEPT OF EDUCATION & TRAINING
PRESENTATION BY
LEN STAFFORD
MANAGER MANAGEMENT AUDIT
DET CONSISTS OF
SCHOOL EDUCATION
TAFE NSW
VETAB
BUDGET 2005/06 - $9.6 BILLION
$6.6 BILLION – EMPLOYEE EXPENSES
$1.5 BILLION – OTHER EXPENSES
$1 BILLION – GRANTS & SUBSIDIES
$293 MILLION – DEPRECIATION
$237 MILLION – MAINTENANCE
PERMANENT PAYROLL
66,000 TEACHERS
3,000 STATE OFFICE EMPLOYEES
CASUAL PAYROLL
26,000 CLAIMS WEEKLY
NOW COMPUTER BASED
AUDIT APPROACH
CONTINUOUS PAYROLL AUDITS
HR LEAVE DATABASES
ACCOUNTS PAYABLE
REGULAR SCHOOL AUDITS
PREVIOUSLY EVERY 2 YEARS
NOW MORE FOCUSED
WHY GO TO DATA MINING?
WHICH PRODUCT DID WE CHOOSE?
WHY NETMAP ANALYTICS?
WHAT PROCESS DID WE
FOLLOW WITH NETMAP?
• FRAUD RISK ASSESSMENT
• DEVELOPMENT OF SCENARIOS
SOME FRAUD RISKS IDENTIFIED?
CLERK PAYS FICTITIOUS EMPLOYEE
OR VENDOR (4.1, 4.2, 4.3, 4.4 & 4.11)
PAYMENT TO NON-EXISTENT
ADDRESS
PAYING OVERTIME / HDA / TRAVEL
EXPENSES WHILST ON LEAVE
RESURRECT FORMER EMPLOYEE
(4.5.1 & 4.5.2)
MISUSE SUPER USER OR
CHANGE CONTROL ACCESS (4.16)
CREATE PAYROLL GHOST
(4.1, 4.2, 4.10, 4.12, 4.13, 4.14 & 4.15)
RELATIONSHIP BETWEEN
OFFICER & EXTERNAL PARTY (4.14)
SOME SCENARIOS:
4.5.2 PAYROLL USERS LINKED TO EX
EMPLOYEES WITH BANK ACCOUNT
CHANGES
4.6 EMPLOYEES RECEIVING LARGE
PAYMENTS ($20K+)
4.10 STAFF NOT ON PAYROLL BUT
RECEIVING PAYMENTS
4.11 MULTIPLE JDE VENDORS AT SAME
ADDRESS (EACH $20K+)
4.14 ADDRESS LINKED TO EMPLOYEE
& VENDOR
4.16 STAFF WITH HIGH CONNECTIVITY
FINDINGS TO DATE
• MAINLY COMPLIANCE ISSUES:
►CREDIT CARDS FOR FLIGHTS
NOT UNDER GOVT CONTRACT
► POOR ALLOWANCES MGMT
► GST REQs NOT FOLLOWED
► ACCTS PAYABLE MGMT
► OVERPAYMENTS
► CONFLICTS OF INTEREST
• NETMAP HASN’T FOUND A FRAUD
IMPORTANT LESSONS
• MUST UNDERSTAND BUSINESS &
SYSTEMS & RISK
• RISKS ENABLE DEVELOPMENT OF
SCENARIOS & IDENTIFY DATA NEEDS
• NEED TO REVIEW FINDINGS
• CONTINUE BRAINSTORMING
• ISSUES RAISED NOT TRADITIONAL.
HOW DID WE COME ACROSS ISSUES?
• DATA MINING IS ONLY ONE TOOL
QUESTIONS?