Educational Procurement Journal - Spring 2018 - 14

change must be confirmed with a
phone call or email to the existing
supplier contact. For new supplier
set up, verification of real company
information through Google searches
can add a layer of protection, but
can be challenging for companies
with limited resources.
Major changes include:
n New set-up requests are only
accepted from UCSF department
personnel who demonstrate
a business relationship with
the supplier.
n For updating existing supplier
information, an external positive
verification is performed to confirm
the requested change by calling
or emailing the supplier using the
existing contact information on file,
or by performing a Google search
for supplier's accounts receivable
department.
n Banking account change requests
must be accompanied by old
bank account or remit-to address
for comparison with the existing
supplier record.
n The supplier is put on payment
hold until an external positive
verification is completed.
n Verification is documented in an
imaging system for recordkeeping.
n The supplier hold is released only
if the external positive verification
is successful.
n Supplier set-up requests received
directly from suppliers will not be
processed.
Since the implementation of
these key controls at UCSF, one
fraud attempt involving a significant
amount was caught and turned over
to the police for investigation.

Improvement Opportunities in
Processes and Systems
The manual effort to perform
external positive verification is
substantial, and the balance of risk
versus effort is difficult. However,
given the high level of risk associated
with electronic payments, the effort
is necessary. The added workload
necessitated a business process
review for improvement opportunities
in efficiency and control.

14

Supplier Registration Software
The task force was also charged with
exploring software to manage supplier
self-registration. Cross-functional
teams from Information Technology,
Audit, and Accounts Payable,
leveraged the participants' diverse
experiences in systems, business
processes, and controls. Selection
criteria focused on functionality,
cost, product maturity, usability, and
implementation timeline. The selected
solution needed to deliver functionality
that streamlined processes and
strengthened key controls. It also
needed to address keying effort,
approval workflows, supplier data
accuracy, and exposures to risk. The
task force examined new software
against modifying legacy systems. The
team also looked at other universities'
systems. After considering all available
options, the task force recommended
purchasing the software solution,
rather than building it.

Auditing Tool
UCSF recently acquired a risk
mitigation product1 that enables a
transformative data-driven solution
and allows greater insight into
supplier behavior and changing
patterns. It is designed to help
enforce internal controls, while
streamlining business processes to
proactively manage risks associated
with supplier information changes.
Business rules flag high-risk supplier
record changes for review before
processing. For example, a rule
can flag any supplier bank account
information change. A related
workflow can put the supplier on
payment hold until positive verification
is completed. A similar rule can flag
any suppliers that have pending
payment method change from check
to ACH. Overall, the product offers
the capability of delivering data-driven
business rules and analytics that
address significant risks.

discovered, it is critical that every
effort is made to obtain as much
information as possible. Initial actions
are vital. Fraud investigation must be
conducted confidentially and with
sensitivity. Handling of fraud incidents
should be assigned to a senior,
trusted individual who works directly
with the appropriate authorities.
Incidents should be documented in
great detail, outlining the sequence
of events, specific dates, people, and
communication interchanges. Details
may contain essential clues that help
in the fraud investigation.

Police Investigation
The initial report should be
filed with the police department.
Full cooperation is necessary to
help the police and the Federal
Bureau Investigation (FBI). A welldocumented report helps expedite
the investigation. While the fraud
investigation is in process, it
is important to keep pertinent
information confidential. Any new
information should be reported to the
police immediately.

Notify the Banks
Upon discovering the fraudulent
transfer, the institution's bank
should be contacted immediately
to request a recall of the funds from
the fraudster's account. Initiating an
immediate recall of funds is critical,
as the monies can sometimes sit in
the fraudster's account for a number
of days. Many recoveries have been
possible because of immediate
notification. The police working on
the fraud case may be a conduit to
the FBI. If not, the FBI should be
contacted; it works with the United
States Department of Treas0ury
Financial Crimes Enforcement
Network and may be able to help
return or freeze the funds. Complaints
can be filed with www.ic3.gov.

What to Do If Fraud Happens

Risk Management and
Insurance Claim Submission

It is important to develop and
implement a fraud-handling procedure
(e.g., communication, escalation,
and monitoring). When fraud is first

Most institutions have crime
insurance coverage. Risk
management groups should be
involved early to leverage their

EDUCATIONAL PROCUREMENT JOURNAL | SPRING 2018


http://www.ic3.gov

Table of Contents for the Digital Edition of Educational Procurement Journal - Spring 2018

Letter from the CEO
Cyber Security—Everyone’s Business
Scammed—How to Protect Your University
Have Festival, Will Travel: Virginia’s Advocacy Program for Small-, Women-, and Minority-owned Businesses
What Is It You Can’t Do?
Heard on the Street: New Hot Topics from the NAEP Exchange
Building a Fund of Sustainability Knowledge, One Book at a Time— Part Eight
Best and Final: Crowdsourcing Beyond the Buzzword
Index to Advertisers
Educational Procurement Journal - Spring 2018 - Intro
Educational Procurement Journal - Spring 2018 - cover1
Educational Procurement Journal - Spring 2018 - cover2
Educational Procurement Journal - Spring 2018 - 3
Educational Procurement Journal - Spring 2018 - 4
Educational Procurement Journal - Spring 2018 - 5
Educational Procurement Journal - Spring 2018 - Letter from the CEO
Educational Procurement Journal - Spring 2018 - 7
Educational Procurement Journal - Spring 2018 - Cyber Security—Everyone’s Business
Educational Procurement Journal - Spring 2018 - 9
Educational Procurement Journal - Spring 2018 - 10
Educational Procurement Journal - Spring 2018 - 11
Educational Procurement Journal - Spring 2018 - Scammed—How to Protect Your University
Educational Procurement Journal - Spring 2018 - 13
Educational Procurement Journal - Spring 2018 - 14
Educational Procurement Journal - Spring 2018 - 15
Educational Procurement Journal - Spring 2018 - Have Festival, Will Travel: Virginia’s Advocacy Program for Small-, Women-, and Minority-owned Businesses
Educational Procurement Journal - Spring 2018 - 17
Educational Procurement Journal - Spring 2018 - What Is It You Can’t Do?
Educational Procurement Journal - Spring 2018 - 19
Educational Procurement Journal - Spring 2018 - Heard on the Street: New Hot Topics from the NAEP Exchange
Educational Procurement Journal - Spring 2018 - 21
Educational Procurement Journal - Spring 2018 - Building a Fund of Sustainability Knowledge, One Book at a Time— Part Eight
Educational Procurement Journal - Spring 2018 - 23
Educational Procurement Journal - Spring 2018 - 24
Educational Procurement Journal - Spring 2018 - 25
Educational Procurement Journal - Spring 2018 - Best and Final: Crowdsourcing Beyond the Buzzword
Educational Procurement Journal - Spring 2018 - 27
Educational Procurement Journal - Spring 2018 - 28
Educational Procurement Journal - Spring 2018 - 29
Educational Procurement Journal - Spring 2018 - Index to Advertisers
Educational Procurement Journal - Spring 2018 - cover3
Educational Procurement Journal - Spring 2018 - cover4
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