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A Leader in Risk Based Enterprise Controls Management Solutions

Copyright ©. Fulcrum Information Technology, Inc. Give me a lever long enough and a fulcrum on which to place it, and I shall move the world - Archimedes

Mitigate Risk of Losses, Waste and Fraud in your Procure-to-Pay Process with Smart Controls

for Oracle

Educational Webinar Series

Adil Khan, Managing Director

March 29th , 2016

www.fulcrumway.com Copyright © FulcrumWay

Oracle EBS R12 Procure to Pay

Introductions

Oracle Payables and Procurement Overview

Procure to Pay Controls Check List

Oracle EBS Configurations that Mitigate Risks

Smart Controls – A Case Study

Q&A

Agenda


Introductions





Q&A

Agenda Oracle EBS R12 Procure to Pay


FulcrumWay™ Insight

Thought Leadership

Co-Authored GRC Book: First book on GRC for Oracle Applications

FLOAUG Innovate 16 - February 12th – Orlando: Oracle Role Based Security and Oracle Cloud

Educational Webinar – February 25rd – Self Service User Provision

Educational Webinar – March 22nd – Procure to Pay Process Optimization with Controls Monitoring

Collaborate 16 – April 11th, 2015 Las Vegas GRC Client Appreciation Dinner

Educational Webinar – May 24th – Hire to Retire Controls in Oracle Fusion HCM

Oracle Open World – Annual GRC Dinner on September 19th, 2016 - San Francisco, CA

LinkedIn –FulcrumWay Risk, Compliance and Audit Software Group

International GRC Round Tables – Sydney, London, Johannesburg, Dubai See events page for details

Proven Expertise


FulcrumWay Client Studies Successful

Track Record Government Oil and Gas

Healthcare

Communications

Financial Services

Transportation Natural Resources

Manufacturing

Retail

High Tech Media/Entertainment Life Sciences

http://www.rd.com/

http://www.arvinmeritor.com/

http://www.semiconductorstore.com/pages/asp/supplier.asp?pl=0133

http://www.integralife.com/index.aspx


Introductions





Q&A



Business Process Models Service Oriented Architecture

Corporate Performance Management Collaboration

Strategic Sourcing & Contract Mgmt

Supplier Collaboration

Spend Categories

Indirect & MRO

Direct

Materials

Services SWIFTNet

Settlement

Payment

Processors

Requisition Purchase

Goods /

Services

Receive

Goods /

Services

Invoice Issue

Payments

Banks

Oracle Procure-to-Pay

Control Points Process Controls





Spend Categories

Indirect & MRO

Direct

Materials

Services SWIFTNet

Settlement

Payment

Processors

Requisi-

tion

Purchase

Goods /

Services

Receive

Goods /

Services

Invoice Issue

Payments

Banks


Are your vendors compliant with trade regulations? Are the vendors

blacklisted?

Do you have duplicate suppliers?

Are there inappropriate associations between a

vendor and an employee?

Are there frequent changes to Supplier

information?

Are you missing critical supplier information? Is the information valid?

Strategic Sourcing & Contract Mgmt CONTROLS

Process Controls






Spend Categories

Indirect & MRO

Direct

Materials

Services SWIFTNet

Settlement

Payment

Processors

Receive

Goods /

Services

Invoice Issue

Payments

Banks


Do you have duplicate Purchase Orders?

Are there purchases with non-preferred vendors?

Are there split POs?

Are POs created on the same day as goods

arrive? Requisition

Purchase

Goods /

Services

CONTROLS

Process Controls






Spend Categories

Indirect & MRO

Direct

Materials

Services SWIFTNet

Settlement

Payment

Processors

Requisi-

tion

Purchase

Goods /

Services

Banks


Are you making accurate and timely payments?

Did the person making the payment create or modify

the vendor?

Are there discrepancies in freight charges?

Receive

Goods /

Services Invoice

Issue

Payments

CONTROLS

Are payment term changes reviewed before payment?

Are there duplicate invoice amounts being processed?

Process Controls


Introductions





Q&A



Process Risk Management

Detect/

Analyze

Findings

Implement

Corrective

Actions

Monitor

Controls

Scope

Application

Controls

Sample

ERP

Data

Manage

Exceptions

Implement

Controls

Risk Advisors/

ERP Managers/

Control Owners Risk Advisors/

Control Owners

Control

Owners/

ERP

Managers

Establish

Test

Environment

Assess Risk Identify Risk

Design Controls

Advanced

Controls

Experts/

ERP Managers

Approach


Oracle Controls Checklist Procure to Pay

Item Configuration Control Risk

1 Allow Address Change (Single Payment) Set to No Check payments are sent to an incorrect or invalid address, which could increase

the risk of unauthorized payments.

Automatically Create Employee as Supplier Define Unauthorized supplier records are created for unauthorized employees, which may

result in invalid reimbursement of employee expenses.

2 Allow Pre-Date (Single Payment) Set to No Payments may be recorded on dates preceding invoice dates, resulting in an

understatement of the AP liability account.

3 Use Invoice Approval

Allow Force Approval Set to Yes Unapproved or invalid invoices are created and paid.

4 Hold Unmatched Invoice Set to Yes Supplier may over-bill and invalid or inaccurate invoices may be paid that could

increase the risk of unauthorized transactions and misstatement in accounts.

5 HR: Expand Role of Contingent Worker

profile option Set to No Unauthorized commitments and orders could be made by contingent workers,

outside of the corporate policy.

6 Purchasing approval groups Define Approval groups and assignments may not be appropriately defined, resulting in

invalid or unauthorized approval of transactions.

7 Owner Can Approve Set to No Unauthorized changes to transactions may occur resulting in unauthorized orders,

requisitions or other transactions. 8 Approver Can Modify

Set to No

9 Use Approval Hierarchies Set to Yes Documents may be authorized by the incorrect authority.


Procure to Pay

Item Configuration Control Risk

10 GL Date Basis S (system)/I (Invoice) Liabilities are not recorded in the correct period.

11 Employee Signing Limits Define Employees may be allocated greater signing limits than planned, resulting in

employee expenses outside of company policy.

12 Exchange Rate Amount" tolerance

configuration Define Inconsistent exchange rates may be used resulting in inaccurate and invalid

valuation of accruals and liabilities.

13 The "Shipment Amount" tolerance

configuration

Define Liabilities may be misstated if invoice amounts are more than what was ordered

and received; or vice versa.

14 Allow Distribution Level Matching Set to Yes Invoices can only be matched to shipment lines, potentially resulting in invalid

accounting of the invoice.

15 Over Receipt Tolerance

Over Receipt Action Verify Values Goods may be received and paid for which were not ordered, or payments may be

made for services which were not actually rendered.

16 Receipt Required Set to Yes. Verify for

outside processing,

rate based temp labor,

fixed price temp labor

and fixed price services

Invoices are paid without receiving goods/services

17 eBTax: Allow Override of Tax Recovery

Rate profile option Set to No The tax recovery rate could be overridden by unauthorized individuals, resulting in

inaccurate tax calculations.

Oracle Controls Checklist


Introductions





Q&A



Navigation: Purchasing Supper User > Setup > Purchasing > Document Types

Purchase Order Approval Purchasing

Configuration


Payables

Configurations User Invoice Approval Workflow

Navigation: Payable Manager--> Setup -->Options--> Payables Options

Click on Approval Tab


Navigation: Payable Manager--> Setup -->Options--> Payables Options

Click on Approval Tab

Allow Force Approval Payables

Configurations


Navigation: Payables Super User->Supplier ->Entry. Select Supplier, and then Click Invoice

Management

AP Invoice Payment Discounts Payables

Configurations


Navigation: Purchasing Supper User ->Setup-> Organizations -> Receiving Options

Receiving Tolerance Level Receiving

Configurations


Navigation: Payables Super User->Setup->Options->Payables Options and then click on Invoice

Tab.

Payable Invoice Posting to GL GL Posting

Configurations


Oracle EBS R12 Payables and Purchasing

Configurations

Introductions





Q&A

Agenda


Fiscal watchdog ensures tens of billions of dollars in

payments are lawful and correct

Our Client

A state government agency responsible for safeguarding financial assets – more than $120 billion of public funds.

Helps local governments and nonprofits invest their money with flexibility, security, and confidence.

Challenges Replace fragmented legacy system for recovery audit department with a single incident management system Replace manual control checklists with a audit analytics system to identify suspicious vouchers submitted for payments by 28+ agencies across the state. Assign suspension transaction to auditors for final review and approval using a pattern matching system

Solutions

Oracle GRC Advanced Controls

Results: Reduce erroneous payment processing by 5% on millions of payments processed each day by consolidating all vouchers across 28 agencies into a single data hub. Improve incident investigation process by establishing business rules to assign incidents based upon risk level, investigation type, priority that match the auditor skills and job role Provide management visibility and independent oversight to monitor approved and rejected payments Eliminate inconsistent and contradictory actions by auditors by providing a structured investigation process based on approved investigation checklists based on type of the suspicious transaction. Optimize recover audit business process with integration to the ERP system for vendor management and payment processing

Case Study


Our Client Designs, develops, markets, and distributes footwear for men, women, and children

The company operates through four segments: Domestic Wholesale Sales, International Wholesale Sales, Retail Sales, and E-commerce Sales.

Operates 122 stores, 131 factory outlets, and 71 warehouse stores in the United States; and 44 stores and 26 factory outlets internationally.

Challenges Control cash leakage in Procure to Pay Process. Assess Vendor Risks based on internal and external data sources Streamline internal audit of Fright costs, Media fees Ensure Contract compliance

Solutions

Oracle Transaction Controls

FulcrumWay OAT™ Analytics

Results: Enabled AP payment tracking , and prevented over 200K in future losses by catching them earlier. Enabled comprehensive vendor risk analysis using all available data - from fraud and conflicts of interest to lapsed business licenses and liability concerns. Safeguarded freight-related disbursements by identifying payment errors and analyzing whether vendors and carriers have complied with your shipping guidelines Enabled Agency and media invoices match up. Identify duplicates and overpayments, review contracts, media plans, insertion orders, print orders and billing statements, and accurately determine whether there have been mistakes and under-achieving performance. Improved contract compliance combines using automated techniques with focused strategic buyer dashboards to identify the causes behind overpayments, and developed prevention techniques for minimizing future exposure.

Case Study A global leader in the lifestyle footwear

controls cost with Transaction Analytics


Smart Controls

Layer of automated controls over ERP controls

Continuously monitor key controls

Detect and Report issues as they occur

Prevent issues from occurring

Quickly see high risk issues with exception based dashboards

Address issues that affect the bottom line

Reduces operational risk and improve process effectiveness

What are Smart Controls?


Procure to Pay Standard Controls

Prevent Duplicate

Supplier Name and Sites



Requisitions Require PO Approval



Purchase Orders can only be issues to

valid suppliers and goods received at

valid sites

Purchase Orders Require

Approval



Goods and Services are received based

on control configurations



Duplicate Invoice numbers are

prevented

Invoice items are matched with PO and Receiving to

ensure 3-Way match



Payments are released to valid

suppliers and Invoices

Payments Terms are enforced


Smart Business = Standard + Smart Controls

User Roles

3-Way

Match

Track

Payments

Sentiment

Analysis

Split

Purchase

Orders Hide

Displays of

Sensitive

Data

Duplicate

Payments

Transaction

Threshold

Amounts

Duplicate

Vendors

Fine-

grained

User

Access

Configuration

Snapshots &

Audit Trial

Transaction

Pattern

Analysis

Fuzzy

Logic,

‘similar

values’

Smart

Controls

Standard

Controls

Approval

Hierarchies Track

Discounts

Case Study


Smart Controls Transaction Monitor – Duplicate Invoices


Smart Controls Definition – Control Model Logic


Smart Controls Incident Management


Smart Controls Preventive Controls


Smart Controls Procure to Pay with Smart Controls


Over 1000 Smart Controls for ERP

Select Configuration, Master Data and Transaction Controls

Detect control weaknesses across ERP system to identify business process optimization opportunities

Case Study


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