Common Fraud Tests by Functional Area

TRAVEL FRAUD
Duplicate Claims
1) Claims for personal mileage and rental car
2) Claims for meals, hotel, airfare charged to corporate credit card and
reimbursed
3) Overlapping travel dates
4) Travel dates where leave was incurred (personal das) costs reimbursed
Fraudulent Claims
1) !asoline charges for personal use (more than one vehicle in same da)
2) Consecutivel numbered meal or hotel receipts
3) "ame receipts (airline, hotel, meal, etc#) submitted a few months apart
PAYROLL FRAUD
Ghost Employees
1) $o ta%es or benefits
2) &nvalid "ocial "ecurit $umber
3) 'ore than one emploee with same address and(or phone number
4) )re*uent emploee address changes
+) ,#O# -o%, .rop -o% /ddress, Organi0ation1s /ddress, or no home address
2) 3nusual wor4 location, no wor4 phone or location
5) $o annual or sic4 leave used over a reasonable period
6) $o evaluations, raises, or promotion over an e%tended period
7) Terminated emploees still on the paroll
a# ,achec4 issued after the termination(last wor4ed date
b# 'atch pachec4 file with active emploee file
Excessive Pay Rates
1) $on8mar4et pa rates or pa rates in e%cess of authori0ed
2) 'ore than one pa increase(change without a position change in the last
ear
3) 9mploees with the same address in the same unit (preferential
hiring(nepotism)
4) 9%cess pa rates or comparison of pa rates b unit(location
+) 9%cess overtime or continual pattern of overtime
Common Fraud Tests by Functional Area
2) Commissions or bonuses are e%cessive or don1t agree to performance
factors
Nepotism
1) "ame department, same address
VENDOR/PURCA!"N# FRAUD
Conflict of Interest
1) :endor address same as emploee address
2) :endor phone same as emploee phone
Fraudulent vendor
1) 'ore than one vendor with the same address
2) :endors with ,#O# -o%es, .rop -o%es or no address
3) :endors with no phone numbers
4) "e*uentiall numbered invoice
+) $umerous invoices ;ust below approval thresholds
2) &nvoices with same dates and amounts
5) &nvoices significantl greater than purchase order
6) :endor names that "O3$. <&=9 well 4nown vendors
7) &nvalid )9&. numbers
1>) .eliver to address not entit address
Vendor Kic!acs"#id Ri$$in$
1) Contract award date precedes proposal due date (bid rigging)
2) -id received date of awarded contract is alwas latest bid (bid rigging)
3) Contracts ;ust below bid limits (preferential bus)
4) "plitting contracts to avoid bid limits (preferential bus)
+) ,urchase *uantities e%ceed contract *uantities (e%cess purchases)
2) ,urchases do not result in a related increase in inventor levels
(merchandise never shipped or under shipped)
5) &nventor levels continue to rise (e%cess purchases)
6) .uplicate invoice numbers (duplicate pas)
7) .uplicate date and invoice amounts (duplicate billings)
1>) &ncrease in production costs due to increase in suppl costs (inflated prices)
11) &ncrease in returned merchandise(credits (inferior supplies)
12) 3nusuall high discounts or credit terms (preferential treatment)
Common Fraud Tests by Functional Area
13) &nventor write8off for obsolete goods then additional purchase of these
items
T$e%t o% !er&ices
1) 3se of phone sstem for personal or outside business calls (e%cess activit)
2) use of postage, e%press mail services (ship to same last name as approver,
e%cess activit)
3) 3se of 6>> calling sstem (fre*uent call from numbers)
REVENUE FRAUD
%immin$
1) ?eduction of sales et inventor levels falling
2) &ncrease in inventor shortages
3) Cashier overages or shortages
4) &ncrease in customers returning merchandise without receipts (duplicate
returns)
+) @igh number of cashier no sales, voids, corrections, or overrides
2) .uplicate credit memos or gift certificate numbers redeemed
&appin$ Receiva!les
1) &ncrease in /(? aging
2) /mounts paid don1t agree to amounts owed
3) $o collection letters being mailed on outstanding debt (no bill flag)
4) &ncrease in average time from billing to collection
+) &ncrease in small dollar write8offs
#orro'in$
1) <ags from receipt dates to deposit dates
(ritin$ )ff De!ts Collected *funds retained+
1) &ncrease in write8offs
2) &ncrease in ad;ustments (customer complaints)
3) @igh value credit, ad;ustments
4) !aps in invoice se*uence (invoices not recorded in /(? "stem)
+) .uplicate credit memo numbers (processing credit memos twice)
Common Fraud Tests by Functional Area
Kic!acs"Conflict of Interest
1) 3nusuall high sales discounts
2) 3nusual credit terms, credit limits
3) !aps in invoice numbers
4) )re*uent credit memos to the same customer
+) "hip to address same as emploee address
2) @igh damages items rate
5) &ncrease in inventor mar4downs