Purchase Card Monitoring

October 1, 2020

Purchase cards or P-cards are a popular payment alternative for companies' small dollar transactions. However with the growth of P-cards comes exposure to risks that can undermine their use.

CaseWare RCM’s Alessa (previously CaseWare P-Card Monitoring Solution) prevents such misuse, abuse and potential fraud and fosters a sustainable P-card monitoring environment.

Alessa provides early detection and remediation of misuse problems validation of all control points with complete coverage examination of 100 per cent of P-card transactions, improved P-card program performance and the creation and maintenance of a culture of compliance.

P-Card case study

Let's see how Alessa can protect a company in a typical situation.

Donna from Spark Supplies uses her company-issued P-card to purchase gas for her car while on vacation.

Alessa’s monitoring solution immediately flagged the transaction as a personal purchase because the transaction took place while Donna was on vacation, as indicated in the HR system.

As soon as the exception was detected, Alessa’s P-card monitoring sent an email alert to Donna requesting an explanation for the purchase.

Donna replied to the email stating that it was an honest mistake - she didn't realize that the company policy wouldn't allow her to use her P-card while on vacation. But such purchases have happened before and based on Donna's history of misuse, she's flagged as high-risk.

Flags alerts for investigation

An alert is assigned to Erica, an analyst in the Compliance Department, for investigation.

Erica reviews the content of the alert and then looks at the history and notices Donna's email response.

She applies the personal purchase indicator to signify the root cause for the exception.

Erica then checks the resolution guidelines and notices a step requiring a review of related alerts generated for the cardholder.

Erica, clicks the related alerts tab and sees the following non-repayment of transactions flagged as personal purchase, insufficient manager review of expenses.

Calls for comprehensive investigation

These findings appear suspicious, so Erica decides to create a case for Donna to facilitate a comprehensive investigation.

By creating a case, Erica can keep all supporting documents related alerts and comments together and maintain a history of any actions taken during the investigation.

She then moved the case to the investigate state in the workflow and quickly analyzes all the previous personal purchases not repaid by Donna, and expenses approved by Donna's manager.

From the investigation, Erica realizes that Donna owes the company over $4,000 in personal purchases.

In addition, Donna's manager was not properly reviewing Donna's expenses as the difference between the cardholder sign-off and the manager sign-off was less than two minutes.

Erica requests full repayment of the amount owed. Donna repays the company and Erica closes the case.

Is the problem widespread?

After reviewing the exception, Simon, the Compliance Manager wants to know if there's a widespread problem with employees abusing the Purchase Card program.

Simon navigates to the program dashboard and notices that the No. 1 root cause for exceptions was indeed personal purchases.

This raises the question: which employees or departments are using company P-cards for personal purchases?

Seeking an answer, Simon goes to the overall misuse dashboard and notices that the majority of the personal purchases are by employees from the marketing department, of which Donna is a member. Over a three-month period, the total amount of personal purchases for the department was $14,500.

Simon believes that a culture of misuse has developed within this department and the company must take immediate action before the problem becomes widespread.

Based on these findings, Simon recommends the following changes in the Spark Supplies P-card program to prevent problem recurrences:

  • place the card holders from the marketing department on a watch list
  • card holders will be monitored for a period of time until an improvement can be seen in their P-card usage patterns
  • conduct refresher training for all card holders on the company's personal purchases policies
  • remind department managers that they are required to properly review expense reports from their employees

Creating sustainable environment

With Alessa, Spark Supplies has created a sustainable compliance environment for its P-card program.

Now, Spark Supplies can examine 100 per cent of its P-card data and not just samples; include data from HR and Accounts Payable systems for better insight into P-card transactions; increase efficiency by automatically identifying instances of card abuse and misuse and recover funds before it is too late;  remediate exceptions and issues within an automatic workflow to ensure all required remediation steps are followed and a history of actions are maintained within the system.

Contact our sales team to see how your organization can benefit from implementing Alessa for P-card monitoring.

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