Second chances are awesome, but second payments to vendors are not. Controlling duplicate payments can be challenging, and not catching it early on can be costly. Within the public sector, this amount is significantly higher due to the typical size and volume of payments. According to the US Government Accountability Office (GAO), in fiscal year 2019, agencies across the government made an estimated $175 billion in improper payments – payments that should not have been made or were made in the incorrect amount.
While many duplicate payments are recognized after high integrity recipients notice the mistake, others go unnoticed until expensive recovery audits are performed. Relying on manual control to detect violations such as duplicate invoice payments increases exposure for leaking cash in accounts payable.
With 18 million transactions annually, the state of Ohio’s Office of Budget and Management sought to develop a way to identify duplicate payments in the state government’s accounting system and detect subtle duplications that escape human review.
Leveraging Alteryx and Cloudera software, The State of Ohio Budget and Management Office was able to save more than one million tax-payer dollars.
Flagging the duplicates
Previously, Ohio’s traditional accounting processes could not identify many duplicate payment scenarios, such as requests from the same vendor made through different systems. In other cases, it could not detect second invoices with a different date or vendor names that were in accurately entered. Modern analytics made it possible to detect these subtle duplications, and in turn, led to process reviews to prevent future errors.
Saving tax-payer dollars is important now more than ever as the state continues providing services to citizens during uncertainty. During the first phase of the project, the team identified a total of 56 duplicate payments, totaling more than $117,702 across 22 different agencies, boards and commissions. Realizing the power of analytics, they continued using the tool for an entire year and now have identified one million dollars in savings.
Decision-making with data
The role data analytics plays in identifying duplicate payments is just one of many ways data can save time and money in state government and give decision-makers the resources they need to make data-backed decisions. Data shows if policies or actions are making an impact and allows organizations to respond faster in times of crisis with insights into their rapidly changing environment.
Using data to manage programs can strengthen procedures and put processes in place to detect duplicate payments that have slipped past the prevention controls of your state’s financial systems. Data also gives organizations the opportunity to adapt to new business realities and gain insights, helping them stay agile, informed, and engaged.
About the author: Jason Wood is the director of analytics at Avaap. With over 10 years of experience in technology, he is skilled in all aspects of business intelligence and analytics.