Page 43 - CCCA Magazine Winter 2017

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limits on gratuities given or hospitality performance should also be monitored. the general ledger and reconciliation of ap-
extended to government offcials. Most Vendor approvals should be supported provals with recorded transactions.
organizations choose to track gifts and by due diligence on vendors. Data analytics are also useful to de-
hospitality by logging them. Gift and tect policy violation or avoidance of con-
hospitality approval records will typi- detective Controls trols. While there are many effective data
cally identify the recipient of the gratu- It is widely accepted that the implemen- analytics automated tools available on the
ity and the business purposes of the gift. tation of preventive controls alone is market, it is often possible to run some
■ Charitable donations, sponsorships inadequate and that robust compliance rudimentary queries on business systems
and political contributions. Policies programs must be supported by efforts to to reveal suspicious activities. Helpful que-
should require such disbursements to detect violations of company policy or the ries include suspicious keyword matching,
be reviewed to ensure the purpose and law. Periodic assessment of the effcacy of identifcations of payments made in high-
the recipient of the donation or con- the compliance program must be made risk countries or in countries other than
tribution are legitimate and are not of- in order to improve and strengthen it as the country of operation of a vendor or
fered to create an improper advantage needed, and to account for relevant devel- individual, repeat even-dollar transactions,
for the company. Reviews are typically opments in the feld and in international cash transactions, vendors with multiple
supported by appropriate due diligence. and industry standards. changes to bank account numbers, over-
■ Procurement. Controls should be Detective controls are basically the paid purchase orders, split payments made
placed on the selection and perfor- monitoring and auditing of the program’s to circumvent approval limits, payee’s
mance of vendors to ensure they do not preventative controls. They involve the re- names not matching contract or invoice
pay bribes on behalf of the organization view of sample transactions to ensure their names, and invoice receipt amounts greater
or have not been selected improperly compliance with applicable processes and than the corresponding receipt amounts.
because of their ties to a government of- work instructions. The review should also Finally, detective controls should also
fcial. Procurements, to the extent possi- seek to identify controlled transaction that include internal and, where possible, conf-
ble, should be competed among several occurred outside of the prescribed pro- dential reporting of violations of the organi-
vendors and selection should be based cesses. Methods to identify such transac- zation’s code of conduct, policies or the law.
on qualifcation as well as value for tions include review of a select excerpt of The design and implementation of
money. Payments to vendors and work the company’s records, such as portions of anti-bribery internal controls can seem
daunting, but the alternative is worse. The
key to designing and implementing anti-
bribery internal controls is a good un-
derstanding of both bribery red fags and
the organization’s activities and business
processes. As it is generally the case with
organizational architecture, a good un-
derstanding of the organization’s various
obligations and responsibilities is the key
to building a system effcient in its imple-
mentation and performance, and the best
way to maintain an effective control of the
cost of the design and operation of these
internal controls. ❚

Isabelle Pierre is Deputy General Counsel at Gen-
eral Dynamics Land Systems. She is currently on
maternity leave.

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