Federal Scandal Shows Need for Better Expense Management
Over the past decade, the U.S. government has taken a special interest in boosting investor confidence by raising financial record-keeping standards for corporate America. Passage of legislation such as the Sarbanes-Oxley Act placed strict standards upon corporations and increased demand for stronger financial controls for all public companies. This requirement for additional fiscal transparency helped spur demand for spend management software solutions to help companies comply with regulations, but it seems even the U.S. government could use some help with its expense management.
Earlier this week, it was announced that a high-ranking U.S. Immigration and Customs Enforcement official was involved in a three-year embezzlement scheme that defrauded American taxpayers of approximately $600,000. Through manipulation of expense reports and creation of false receipts, the official and his accomplices were able to divert the money into personal purchases that included a new house and boat.
According to Fox News:
“The scam represents total breakdown of oversight within the agency, especially given the periodic background checks and financial examinations given to agents working within the sensitive Office of Intelligence.”
Certainly, the ICE’s expense management system could use an overhaul if a manipulation of federal funds was able to go on for years and hundreds of thousands of dollars before the misconduct was noticed and stopped. It just reinforces the importance of having strict controls and policies in place, including software solutions that have the capability of red-flagging suspicious transactions and auditing excessive spend.
With some government agencies recently committing to e-procurement projects to help save taxpayer money, perhaps an expense management initiative won’t be far behind. Just as investors like to have confidence in corporate America, Americans like to have confidence that their tax money is being managed effectively – not funding someone’s new yacht.