Tailor-made software uncovers fraud
- By Judi Hasson
- Dec 10, 2000
Looking for a faster way to ferret out fraud and abuse, the inspector general
at the Department of Housing and Urban Development has partnered with a
company to take software developed for commercial auditors and investigators
and tailor it for government use.
The software, developed by Paisley Consulting based on Lotus Development
Corp.'s Notes groupware technology, will help HUD's inspector general staff
work together by making it possible to share electronic documents and track
the workflow as files go through the extensive process associated with auditing
proj-ects and conducting investigations.
The paperless process should make it easier for the inspector general
staff to sort out the mountains of paperwork it processes every year, said
HUD Inspector General Susan Gaffney.
The investigative office handles 1,250 investigations a year — each
averaging 500 pages of related documents — and 160 audits a year, averaging
3,600 pages each. The pages include spreadsheets, interviews and other material
not easily digested by reading the reports.
HUD investigators are on the lookout for a range of abuses, including
double-billing by contractors, theft of project funds, unauthorized use
of money earmarked for specific projects, bribing local officials to approve
inspections and embezzling federal funds.
With a small staff, Gaffney found it took months to connect the dots
for every case. In searching for a solution, she didn't want to have a large
information technology staff on hand or a handful of "computer cowboys"
to do the job. "We do all kinds of analysis because there is a consistency
in the software, things that people cannot do on their own," Gaffney said.
Paisley, a small company founded in 1995 and located in Cokato, Minn.,
partnered with Arthur Andersen to develop the solution for the inspector
general using two existing packages: Auto-Audit and AutoInvestigation.
AutoAudit was a natural fit. This program automates the process of creating
and maintaining files to document auditors' fieldwork by generating audit
reports and tracking those reports through the review process.
AutoInvestigation serves a similar purpose for investigators, making
it easier to store files and spreadsheets in the format of an investigative
file, track complaints and even fill out suspect and witness profiles. Although
a number of vendors have automated the auditing process, few have tackled
investigations, Gaffney said.
Better yet, the two pieces work together, which will improve the teamwork
between HUD investigators, who are generally the first to look for irregularities,
and HUD auditors, who go in to crunch the numbers and prove the case.
HUD is paying for the software on a per-user basis, rather than buying
it outright. It costs $900 for each of the 600 seats and will be operating
in 65 HUD offices by February 2001.
"We really want a paperless office," Gaffney said. "We think we can
get there by next year."
HUD is just the latest federal agency to use Paisley software to automate
auditing. Others include the Environmental Protection Agency, the Defense
Intelligence Agency and the National Reconnaissance Organization.
In the past, auditors pored over volumes of statistics by hand to analyze
them and find trends, said Tim Welu, vice president of marketing at Paisley.
Randomly selecting 1 percent of the data, auditors looked for a needle in
a haystack. But now, computer tools allow auditors and investigators to
look at the entire database at once to uncover a pattern of abuse.
The leader of the Institute of Internal Auditors, a professional organization
that represents more than 70,000 members, said technology is an important
component of the modern-day audit.
"Because it plays such an important role in today's organizations, internal
auditors are charged with knowing more about information technology than
ever before," said William Bishop III, president of the Altamonte Springs,
Fla., institute. "In fact, many people new to the profession are bringing
with them information-systems training and education."