9/15/2017. Automated Control Monitoring for Fraud, Waste and Abuse

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1 Automated Control Monitoring for Fraud, Waste and Abuse 1

2 Join the session in the AGA app to join polls and ask question Agenda Introductions DOS OIG Criminal Analysis Division & Analytics Florida IG Audience Q & A 2

3 Introductions Melinda Miguel Panelist Former IG Florida Kevin Young Panelist Director, Criminal Analysis Division, DOS-OIG, Office of Investigations Nonie Dalton Moderator ACL Services Ltd. Automated Control Monitoring: Useful Data Objectives > Criteria > Risk > Frequency > Data Requirements Data Data-Driven Continuous Monitoring Data extraction Analytics & analyses Remediation Follow Up & Alert Stakeholders 3

4 Kevin J. Young, CPA,CFE,CMA,CIA Director, Criminal Analysis Division, DOS-OIG, Office of Investigations, years with Department of State- OIG 19 Years Federal Audit Experience with U.S. Army Audit Agency DOS-OIG-Responsibility DOS-OIG s mandate is broad and comprehensive, involving oversight of: Department of State (DOS) Broadcasting Board of Governors (BBG) U.S. Sections of the International Boundary and Water Commission, United States and Mexico (USIBWC) The International Joint Commission, United States and Canada (IJC) approximately $70 billion in Department, BBG, and foreign assistance resources. OIG has only 318 Direct Hire Positions with a budget of about $85 million 4

5 Criminal Analysis Division- Mission/Workload Provide Investigative Support to over 40 Agents assigned to 3 Operational Divisions Asia Pacific and Americas Division Middle East, Africa and Europe Division Special Projects Divison Develop proactive analytical models and provide data support to the other DOS- OIG Components About 2,000 hotlines per year Open/Close about 100+ cases per year Opened 20+ proactive-(self generated) cases Criminal Analysis Division-Staffing Forensic Auditors (4) Over 70 years of Government Audit and Accounting Experience (DoD, ARMY, S.E.C.) Certifications: CPA, CFE, CIA, CMA Masters Degrees: Accounting, Taxation, Public Administration, International Management Investigative Analysts (5): Over 80 years of Investigative Experience. Experience from several Federal Agencies (GSA-OIG. Federal Reserve, Bank of New York, Postal-OIG, Recovery Board) Data Tools: Active Data, MS EXCEL, ACL (AX and Desktop), Adobe, Scanwriter, Analyst Notebook, Tableau, IDEA, PowerBI) 5

6 Power of Analytics Military Pay Fraud (USAAA) Investigation of 5 Soldiers that schemed to defraud the U.S. Government of $323,000 in non taxable pay. We took what we learned applied it the Military pay data set (37 million records) ---identified another 221 transactions valued at about $1.7M 85 of unsupported payments resulted in a $728, loss to the U.S Government. We found that these transactions were the result of pay account adjustments made by two DFAS employees. Both plead guilty and were sentenced accordingly Audit of the DOS Travel Card Program-2016 (OIG) 255 card holders who obtained 2,051 cash advances, valued at $847,189, without a travel authorization 1,306 transactions valued at approximately $222,348, that were spent at prohibited or questionable merchants, such as physicians and charitable organizations Department implemented a robust continuous monitoring strategy that has changed behavior. (Matching Data Sets and Issuing Violation Letters) Melinda Miguel, CIG, CFSA, CBM, CICA, PMP Former Chief IG Exec. Office. of the Governor, State of Florida 6

7 Question 1: What are challenges to establishing Continuous Control Monitoring? 7

8 Question 2: What is the impact of not implementing continuous monitoring? Question 3: How do you ensure that continuous monitoring does not become a burden? 8

9 Question 4: What is the importance of monitoring trends and profiles over time, vs. analytics for straight exceptions? Question 5: What are leading Key Risk Indicators for your organization that could be used across government agencies? 9

10 Question 6: What can I do to get started? Key Take Aways Dedicate Resources (Auditors, Analysts, IT Specialists) Start by Focusing on simple tests to get started to define early success For example: Spending trends (5 year trend analysis) or vendor relationships (Owners) and locations (same addresses) Automate and schedule recurring tests, tasks and process for an efficient process Inspector General Empowerment Act of 2016 exempts certain computerized data comparisons performed by or in coordination with Inspectors General from the Computer Matching and Privacy Protection Act of

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