FSN: IDS and Auditware systems launch fraud detection software for the public sector

IDS and Auditware systems launch fraud detection software for the public sector

6th November 2006
IDM Data Solutions (IDS) and AuditWare have new software which they say enables Public Sector organisations to combat credit card fraud by identifying unusual or inappropriate transactions and misuse. The Government Procurement Card Profiler (GPCP) software is based on CaseWare's IDEA audit platform.

The Government Procurement Card Profiler is the first of IDS' six applications to be launched on the IDEA platform. The GPCP software works by analysing an extract of data supplied by the card issuer, comparing it with specialist databases created and maintained by IDS, including a database of Merchant Category Codes, and generating various exception reports. These allow purchases made by the cardholder which have not been sanctioned by the organisation to be identified.

Alan Livesey, Technical Director of IDS, comments, “In the rush to adopt eprocurement, Government organisations have forgotten the first principles of fraud reduction: 80% of fraud is perpetrated internally by employees. For the majority of organisations the controls are limited. Indeed, some companies actually allow employees to self-certify expenses. The opportunities for fraudulent activity are unprecedented – as growing incidences of misuse demonstrate.”

The security industry estimates losses to fraud to run at 2.5 to 5% of annual turnover, and that is based on traditional systems with good checks and balances. The Office of Government Commerce estimates the cumulative spend via Government Procurement Cards (GPC) will rise from £1.1 billion in 2004 to £4.5 billion by 2008. Conservatively, that suggests well over £100 million public funds will be lost to employee fraud every year.

Livesey continues, “Government organisations have got to take control over the eprocurement process. Analysing payment transactions flags up anomalies such as those undertaken at unusual times and in unusual places; cards used repeatedly for large purchases with the same supplier or employees making simultaneous transactions in the same store. Flagging up these events enables a company to focus attention on rogue spending and send out a clear message that credit cards are no longer open to abuse."

Livesey concludes, “This proactive approach is becoming essential as rogue spending on credit cards increases. Launching GPCP into the public sector provides organisations with the basic steps to get fraud under control before it's too late.”

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