Main Subject - Business

In the first article of this series, I defined fraud, discussed how it can occur in a company, and provided some real-life examples of when and how it has occurred in the corporate world. In this - the second - article, we get down to nuts and bolts; how do you minimize fraud in YOUR company?

There are two main steps required to stop fraud in your company: Step 1 - identify your fraud risks; Step 2 - implement corpo

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

rate expense management software controls to minimize those risks.

STEP 1 - Identify Your Fraud Risks

Is your company vulnerable to any of the following?

Variances between hardcopies and computerized reports;
Departure and return airfare on different dates but with no corresponding hotel expenses;
Meals on weekends or in non-work locations;
Poor descriptions and inco

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

plete documentation such as a missing boarding pass, itinerary or receipt;

Dates out of sequence;

Old receipts;

Nasty or inconsistent explanations to questions regarding claims. A common response is "how dare you question me?" ;

Copies;

Altered receipts;

Credit card statements or printouts instead of receipts;

Airline tickets:

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

Employees have been known to pay for airline tickets using frequent flyer points and then claim the cost of a ticket as an expense from the company. This can be considered a fraudulent activity;

There are numerous mechanisms employed to defraud an organization through the use of airline tickets. Organizations need to be diligent when dealing with airline ticket exchanges, refunds, partial refunds and possi

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ility the flight being claimed was not taken (evidence of car rental, parking at the home airport, meals or other expenses in the destination are not present).

Duplications to watch out for:

These may not be identical amounts as in the case of partial hotel bills;
Past due charges on mobile phone bills;
The same expense may be reported twice in one period or in two

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

or more periods with a different description and coding.

Claiming personal items can also be a source of fraud against the company. These can include:

Travel for family members;
Retail or personal purchases;
Excursions added on to business trips;
Extra days in a hotel, car rental etc.;
Gift shop, massages, etc. may be included on a hotel bill

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

Non-authorized trips.

Organizations should also be diligent in identifying expenses being claimed that were not incurred. This is especially relevant when related to the claiming of meal expenses and meal per diem expenses;

Inconsistencies such as taxi and rental car claims for the same portion of trip or mileage calculations that are clearly inflated;

Overstatements

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ay or may not be deliberate, however they include typographical errors ($34.95 reported as $3,495) and incorrect exchange rate conversions.

There are numerous other less obvious activities that fail to comply with legislative and/or company policies. Examples of these failures include improper coding, such as: hotel bills that include meals, phone, etc., that are reported as lodging; car rental which may

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

not fall into a company authorized class; and the use of prohibited vendors.

STEP 2 - Implement Corporate Expense Management Software Controls

In order to minimize the risk of fraud in your company, your corporate expense management software controls should be designed to provide and support the 5 W's (Who, What, Where, When, and Why). They must ensure that all reasonable, authorized expenses incurred in ord

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

er for a staff member to perform their job responsibilities are paid with the corporate credit card and documented with an original, valid, unaltered receipt, and they must be implemented throughout the entire organization, at all levels and in all functions.

In practice, these corporate expense management software processes, controls, and procedures are very broad. They relate to items such as approvals, authorizat

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ons, verifications, reconciliations, segregation of duties, reviews of operating performance, background investigations, and physical security. They need to be embedded in your day-to-day management and monitoring processes, and they need to also leverage available information technology.

Segregation of Duties as a Corporate Expense Management Control

Given the nature of accounts payable and the related func

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ions, segregation of duties is a crucial consideration. Following is a partial list of duties related to accounts payable and how they should be segregated.

The person responsible for bank reconciliation should not:

Handle unclaimed property reporting
Be a signature on a bank account

The person who is check signature should not:

Authorize invoices for pay

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ent on an account that he/she is also a signature

Have ready access to the check stock.

A person who is responsible for the check stock should not:

Be an authorized signature
Handle the bank reconciliations

The person responsible for the master vendor file should not:

Be an authorized signature
Be able to approve invoices for pa

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

yment

Handle unclaimed property

Individuals responsible for accounts payable functions should not also be responsible for accounts receivable.

Other Corporate Expense Management Controls

Some other corporate expense management controls that are helpful in combating fraud include:

Requiring business purchases be made on a corporate credit cards
Monitoring

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ransactions on the corporate credit cards

Direct pay of corporate credit cards

Pre-population of corporate credit card data in expense report preparation

A good system of approvals to prevent unauthorized reimbursements

A thorough review of an individual's expenses over a period of time

Implementation of a PostProcurement environment (historically we have been working

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

in a pre-procurement environment (Purchase Requisition, Order, Receipt, Remittance, 3 Way Matching, Journal, etc.) which can lead to at least 20% of transactions being disputed.)

Corporate Expense Management Software

Corporate expense management software automates the management of expense claims, significantly reducing the risk of error or fraud and comprehensively managing all purchasing data. A

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ood corporate expense management software solution can reduce processing costs by as much as 90%, so the payback period is tangible and measurable (often less than 6 months).

When choosing a corporate expense management software solution, ensure that it can manage digital data from a range of B2B transactions including purchasing cards, travel expense cards, fleet cards, mobile phones, and Internet purchasing. Infor

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

mation can then be integrated into operating systems including human resources, accounts payable, general ledger, and ERP. Furthermore, make sure that it accommodates all major credit card transactions, that it is non-bank specific, and that it can operate with the world's leading ERP systems.

And finally, before choosing your corporate expense management software solution, consider the fact that technology is not t

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

e entire story in achieving corporate expense management outcomes. Cultural issues, resistance to change and corporate ownership are the greatest barriers to the growth of card programs and the realization of benefits. You must be confident that your corporate expense management software solution provider has a customer-focused consultancy based approach to client relationships of which technology is only one very im

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

ortant part.

Conclusion

Fraud is a significant cost to many (if not most) companies. But it doesn't have to be. By identifying your fraud risks and implementing appropriate corporate expense management controls and corporate expense management software, you can very effectively minimize your fraud risks. And with the right corporate expense management software solution, ROI within 6 months is very achievable

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Main Subject - What is Company Fraud and How Do You Stop It? (Part 2 of 2)

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