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Common Fraud Tests by Functional Area

TRAVEL FRAUD

Duplicate Claims

1) Claims for personal mileage and rental car2) Claims for meals, hotel, airfare charged to corporate credit card and

reimbursed3) Overlapping travel dates4) Travel dates where leave was incurred (personal das) costs reimbursed

Fraudulent Claims1) !asoline charges for personal use (more than one vehicle in same da)2) Consecutivel numbered meal or hotel receipts3) "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 $umber3) 'ore than one emploee with same address andor phone number4) re*uent emploee address changes+) #O# -o%, .rop -o% /ddress, Organi0ations /ddress, or no home address) nusual wor location, no wor phone or location5) $o annual or sic leave used over a reasonable period6) $o evaluations, raises, or promotion over an e%tended period7) Terminated emploees still on the paroll

a# achec issued after the terminationlast wored dateb# 'atch pachec file with active emploee file

Excessive Pay Rates1) $on8maret pa rates or pa rates in e%cess of authori0ed2) 'ore than one pa increasechange without a position change in the last

ear3) 9mploees with the same address in the same unit (preferential

hiringnepotism)4) 9%cess pa rates or comparison of pa rates b unitlocation+) 9%cess overtime or continual pattern of overtime

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Common Fraud Tests by Functional Area

) Commissions or bonuses are e%cessive or dont agree to performancefactors

Nepotism

1) "ame department, same address

VENDOR/PURCA!"N# FRAUD

Conflict of Interest

1) :endor address same as emploee address2) :endor phone same as emploee phone

Fraudulent vendor

1) 'ore than one vendor with the same address2) :endors with #O# -o%es, .rop -o%es or no address3) :endors with no phone numbers4) "e*uentiall numbered invoice+) $umerous invoices ;ust below approval thresholds) &nvoices with same dates and amounts5) &nvoices significantl greater than purchase order

6) :endor names that "O$. ) .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)) 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 merchandisecredits (inferior supplies)12) nusuall high discounts or credit terms (preferential treatment)

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Common Fraud Tests by Functional Area

13) &nventor write8off for obsolete goods then additional purchase of theseitems

T$e%t o% !er&ices

1) se 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) se of 6>> calling sstem (fre*uent call from numbers)

REVENUE FRAUD

%immin$

1) ?eduction of sales et inventor levels falling2) &ncrease in inventor shortages3) Cashier overages or shortages4) &ncrease in customers returning merchandise without receipts (duplicate

returns)+) @igh number of cashier no sales, voids, corrections, or overrides) .uplicate credit memos or gift certificate numbers redeemed

&appin$ Receiva!les1) &ncrease in /? aging2) /mounts paid dont agree to amounts owed3) $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$

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Common Fraud Tests by Functional Area

Kic!acs"Conflict of Interest

1) nusuall high sales discounts

2) nusual credit terms, credit limits3) !aps in invoice numbers4) re*uent credit memos to the same customer+) "hip to address same as emploee address) @igh damages items rate5) &ncrease in inventor mardowns