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Improving Employee Compliance & Policy Awareness to Minimize Spend Risk

on February 22, 2021

Due to the pandemic and the resulting increase in remote work, a great deal of new spend risk is floating around today’s organizations.

With a dispersed workforce, nearly everyone in an organization is spending corporate dollars to some extent, resulting in inherent risk. In fact, a recent Oversight Spend Insights Report found that while T&E spend is down 77% year-over-year, spend risk tripled over the same period.

In all likelihood, this increased risk could be attributed to the sheer number of new spenders unfamiliar with company expense policies and the fact that organizational policies just don’t apply to the types of unique purchases seen since the pandemic. These circumstances call for more effort to improve compliance with existing policies while also monitoring spend behaviors to identify the need for revisions or new guidelines.

The Benefits of Ongoing Employee Compliance Education

For Intermountain Healthcare, an integrated health system based in Salt Lake City, Utah, ensuring their caregivers, a term used for 40,000 employees, can access the appropriate resources and awareness concerning compliant spend and associated policy is an ongoing priority.

With about 8,000 cardholders, evaluating and monitoring spend on the company’s card program is a necessity. Understanding this, Intermountain’s Chad Robison, purchasing card program manager, and Peter Jenson, purchasing card auditor, have effective protocols in place for near real-time feedback on gaps in policy education and easy insight into if policy needs to adapt to new spend needs or patterns.

Here’s what these strategies look like at Intermountain:

Ensuring Spend Policy Awareness Among Employees

Intermountain issues a company card, called an “I-Card,” only after a caregiver completes module training sessions related to specific purchasing activities and needs. Upon completion, caregivers sign an I-Card agreement, which outlines the disciplinary action that occurs if they do not follow policy.

In addition, Intermountain provides a summary sheet that communicates the high priority policies and directs caregivers to additional resources. Intermountain also continues its focus on education with I-Card newsletters for cardholders. These newsletters detail timely reminders and tips on policies based on trending spend behaviors.

The Power of Continuous Spend Monitoring

Intermountain uses a point-based system to evaluate and monitor caregiver spend errors and behaviors. More severe violations have higher point values attributed to them, and the less severe violations fall in the 30-point range.

Once a caregiver hits 150 points, Intermountain suspends the card. Following this, Intermountain evaluates every transaction that the caregiver made over the past few years and holds an audit call to go through each error category and give an overview of why the spend is not compliant. Before Intermountain returns the card, the caregiver must retake the I-Card training modules.

If a caregiver hits 150 points again, the card is suspended for a more extended period, and upper management gets involved. Should it happen a third time, they take away the card permanently.

Intermountain hopes to prevent these more serious transgressions and point accumulations through continued education. By looking at spend data, Intermountain can identify opportunities to provide education, hoping to minimize the chance for future violations.

For Intermountain, real-time monitoring allowed the organization to get better organized around preventing fraud and spending violations, providing a better understanding of where to educate and discuss policy based on obvious gaps identified in audits. With this, Intermountain continues to boast low amounts of fraud, allowing them to focus on improving compliance and continuing caregiver education.

Interested in learning more about this topic? Check out Nathanael L’Heureux’s recent Risk Management article that dives further into best practices for improving compliance.

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