Rediscover the leader within you.

September 24, 2014 Lynn Larson

What can we gain from motivational speakers? A lot. The tough part is acting on their messages due to our ingrained routines and habits, but we should not give up. I am inspired to share what I heard last week at the Scotiabank Commercial Card conference.

Doug Keeley, The Mark of a Leader, told story after story about people who have accomplished amazing things against all odds. Here’s one: After reading a disturbing news story, a Canadian boy (age 12) founded an organization, Free The Children, to fight childhood slavery around the world. Very impressive. Hearing this, it would be easy to think, “I can’t do that” and then miss the real message. We can be leaders and make a positive difference, whether in the workplace or elsewhere, regardless of our status or situation. (See the P-Card success story of one end-user who initially lacked card experience.)

Doug emphasized that change is a choice. We choose to change or we stand still. He described various leadership attributes and the one that absolutely applies to everyone is helping others be their best. Consider your job. If you manage a card program, set your cardholders up for success through effective policies and procedures, and training. (See also the blog post about re-igniting a spark in your card program.) If you are an account manager for a provider organization, take the initiative to provide clients with ideas about how they can improve their programs; help program managers be their best.

Look around you. What direction can you take to demonstrate leadership?

There are endless ways in which we can be leaders. It does not have to consume a huge amount of time. My personal philosophy is “something is better than nothing.” This pushes me to take action even when I feel lacking in time, energy, confidence, etc.

I challenge you (and myself) to spend at least 10 minutes each day doing something that fosters leadership.

At work, this could mean you:

read an industry article relevant to your profession or employer, and report the findings to your manager
propose a new P-Card opportunity
extend a one-on-one training offer to a cardholder who seems to struggle with the responsibilities
listen to a colleague who is trying to resolve an issue

As Doug encouraged conference attendees, change something—stop doing or start doing…

If you have made a change as a result of a motivational speaker/writer, please add a comment below to relay your success story!

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

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How to reassure management about your P-Card controls.

September 16, 2014 Lynn Larson

It’s a classic battle: P-Card supporters versus P-Card resisters. You try to garner program buy-in, but management concerns about controls prevail. Why? How do you overcome this? Begin with a current risk assessment.

When was the last time you conducted such an analysis of your Purchase Card program? Some organizations have never completed this activity, but it is critical for documenting program risks and the mitigating controls. Besides helping to increase program buy-in among management and auditors, a risk assessment:

helps you identify any control gaps
can uncover program inefficiencies
provides the basis for process audits

There are various ways to approach a risk assessment. The ORCA framework is one:

Identify your organization’s program objectives
Determine the potential risks
Document existing controls
Specify the necessary actions to address areas that are lacking controls

If your organization has a risk assessment template, you could start with that or consider purchasing the P-Card specific template from Recharged Education.

A risk assessment provides the foundation for the P-Card control environment.

As you complete the assessment process, here’s an example of something to evaluate. When I managed a P-Card program, an internal auditor asked me if I could obtain a card for myself without anyone knowing. I admitted there were no preventative controls for this. However, there were established detective controls, which were documented in a risk assessment.

Keep in mind that more controls do not necessarily make a program better. To be successful, a Purchasing Card program must have effective controls to prevent and detect card fraud. The challenge is striking the right balance; you do not want to over- or under-control a program. Too many controls are costly, impacting the process savings inherent to P-Cards, while a lack of effective controls puts your organization at risk.

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Reconstructing the crime scene—a case of internal card fraud.

August 18, 2014 Lynn Larson

A Harris County (TX) man used his company credit card to make personal gasoline purchases totaling more than $18,000 per a report by KTRK ABC Eyewitness News. Could this happen to your organization? What were the missing controls? The June 19 news story noted that the man, who was a truck driver for a northwest Harris County company, filled the gas tanks of family and friends between September 2013 and May 2014 in exchange for cash.

Do not become a victim of internal card fraud. Protect your organization by establishing the right controls.

Getting Caught

The man’s boss became suspicious after noticing the average monthly fuel cost increase by as much as $4,000. Then his research revealed purchases of unleaded gas, but the company vehicles use diesel.

Per the 2014 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners (ACFE), the median duration—the amount of time from when the fraud commenced until it was detected—for all schemes in their study was 18 months. The man’s boss beat the norm, but we are left wondering whether this was a fluke or the result of controls.

Recommended Controls

Clearly Defined Roles and Responsibilities

Managers fulfilling a reviewer/approver role are the first line of defense for detecting cardholder fraud. They need to understand the importance of the role and exactly what it entails. They should at least be spot-checking cardholders' receipts. It appears the man's boss was not doing so.

Mandated Training Beyond P&P

Do not limit manager training to P-Card policies and procedures. Train them on the red flag behaviors that might indicate fraud. According to the 2014 report by the ACFE, the top four are: living beyond one’s means, financial difficulties, unusually close association with a vendor/customer, and control issues (unwillingness to share duties).

Appropriate Spend Controls

Should the man in question have had lower spend limits? It’s a delicate balance. You do not want overly restrictive spend controls that cause legitimate transactions to be declined. However, you should regularly review the appropriateness of each cardholder’s limits.

Right Type of Card

Did the man have a P-Card or true Fleet Card? A Fleet Card that allows an organization to: 1) limit the gallons of fuel purchased and/or 2) specify the information a cardholder must enter at the point of purchase, such as vehicle mileage, could have helped deter the fraud altogether. See a Fleet Card success story...

Reports for Department Managers (Reviewers/Approvers)

Provide managers with a report of the purchasing history for his or her department, including comparisons between the current month and same month in previous years. This can help a manager more quickly identify out-of-norm spending activity.

In the gasoline fraud case, if the manager was trained to look for monthly fuel costs within a certain dollar range, he might have spotted the fraud even sooner. Also, because fuel costs can fluctuate widely, reporting should include the gallons of gas purchased each month.

Reports for the Program Manager

Each month, the P-Card program management team should be looking at spend by supplier (greatest to least) and by cardholder, comparing to the previous month and YTD. Define parameters for when research is warranted, such as a monthly change up or down by X% or more. Such reports also support your:

card usage goals by highlighting when card spend with a specific supplier suddenly drops (maybe a different payment method was used) and
strategic sourcing efforts (e.g., when YTD spend with a non-contract supplier reaches "X," you pursue a competitive bid)

Proactive data monitoring and analysis was used by only 35% of the victim organizations...

(per the ACFE report)

For more information about controls, visit the related webpage. See also a related blog post about procurement fraud and card misuse.