2. PROACTIVE USE OF DATA
ANALYTICS
AMTRAK OFFICE OF INSPECTOR
GENERAL

3. WHO Background and Introduction
WHAT Data Analytics work at Amtrak OIG
HOW Data Analytics strategy at Amtrak OIG
Examples
Reasons to use Data Analytics
Challenges of Data Analytics Work
How to leverage Data Analytics for your work
Agenda

4. Amtrak
OIG: - 50 Auditors, 30 Investigators,
17 Support Staff
- Data Analytics Team - 8 (5
employees, 3 contractors)
DA Team: - Performs own audits
- Provides support to other audits
- Supports Investigations group
Background and Introduction

5. Data Analytics work at Amtrak OIG
 Access to 15+ systems (80% of Amtrak’s
financial data)
 Audit in 10 different business areas including-
 Accounts Payable
 Procurement
 Payroll
 Human Capital
 Health care
 Operations
 150+ tests
 18 Reports

6.  Opportunities to reduce cost
 Opportunities to increase revenue
 Opportunities to improve control effectiveness
or increase program efficiency
 Recalculations/Compliance testing
 Identify potential fraud
Data Analytics for different Audit Objectives

7.  Support – OIG and Amtrak leadership
 Strategy – Shared services model
 Sourcing – Hired technical expertise
 Environment – Centralized
 Value – Pilot quick win
 Tools – Limit to ACL and Excel
 Security – Encrypt all data
Data Analytics program at Amtrak OIG

8. E X A M P L E S

9.  From October 2005 - June 2013, $14.1 billion paid to vendors
 Data Analysis identified potential duplicate invoices paid of
about $7.5 million
 Finance staff recovered about $3.5 million
 Four major causes:
 Clerks processed known duplicate payments despite system
warnings
 Duplicate vendors not detected by the automated controls
 Clerks did not ensure correct invoice numbers are entered
 Same Invoices received by different departments were paid
Background: Duplicate Payments

10. Duplicate Payments
Vendor Name
Keyed
Invoice No
Invoice
Date
Invoice
Amount
ERICO PRODUCTS INC 130587 06/07/11 8,062.32
VOSSLOH TRACK MATERIAL INC 0000130587 06/07/11 8,062.32
ADT SECURITY SERVICES INC 75277679 07/07/12 5,224.02
DO NOT USE 75277679 07/07/12 5,224.02
W FRANKLIN LP 51017 10/21/11 3,600.00
Lorraine K Koc 51017A 10/21/11 3,600.00
FEDEX 790264830 05/28/12 1,901.04
FEDEX EXPRESS 790264830 05/28/12 1,901.04

11. Background: Material Price Variance
 Company buys materials form different vendors for
different plants across the country
 Analyzed $35 million worth of material POs
 If lowest price vendor was selected for all materials
bought in CY 2013, company could have saved $3.4
million
 Causes:
 Weaknesses in material requirement forecasting
 Limited number of approved vendors

12. Material Price Variance
Material Number
Vendor
Name
Nbr Of
POs PO Amount PO Qty
Avg Unit
Price
%
Variance
000000003710500004 EXXONMOBIL 6 $29,921 5,376 $6 16.52
000000003710500004 VALDES ENTERPRISES INC 1 $14,953 2,304 $6 16.52
000000000299900382 GE TRANSPORTATION SYSTEMS 11 $36,895 235 $157 12.74
000000000299900382 GE TRANSPORTATION SYSTEMS 1 $885 5 $177 12.74
000000000104500004 KOPPERS INDUSTRIES 11 $723,013 364 $1,986 11.34
000000000104500004 LB FOSTER 17 $705,459 319 $2,211 11.34
Material Number PO Amount PO Quantity
Lowest Avg
Unit Price
Amt At
Lowest Price
Variance To
Lowest
000000000104500004 $1,428,472 683.00 $1,986 $1,356,643 $71,829
000000003628500557 $161,299 4,940.28 $21 $104,092 $57,208
000000003733300001 $2,480,196 371,450.80 $7 $2,425,574 $54,622
000000000256404084 $66,486 60.00 $952 $57,120 $9,366

13. Background: Profile of Timesheet Data
 Amtrak’s major expenses is labor – $1.2
billion paid to union employees in CY 2014
 Amtrak has 14 unions and 23 bargaining
agreements representing different crafts
 6 timekeeping systems
 Data revealed trends and patterns that
raise questions about whether overtime
and regular time is appropriately reported

14. Summary of Weekly Overtime as Percent of Regular Time

15. Summary of Regular and Overtime Hours Reported in Daily
Timesheets

16. Summary of Consecutive Days Worked
Top Occurrences – Consecutive Days Worked
SAP ID Job Title Union Start Date End Date
Days
Worked
MAINTAINER SD BRS-SW 12/19/2013 5/14/2014 147
AGENT TICKET
CLK FC
TCU-OFF 4/30/2014 9/8/2014 132
MAINTAINER SD BRS-SW 12/26/2013 5/1/2014 127
MAINTAINER SD BRS-SW 2/20/2014 6/18/2014 119
COACH CLEANER JCC 3/2/2014 6/17/2014 108
C XXXXXXXXX XXXXXX XXXXXX XXXXXX XXX
TICKET/ACCTNG
CLERK
TCU-OFF 6/4/2014 9/15/2014 104
ENG WORK EQUIP
SD B
BMWE-NEC 6/24/2014 10/1/2014 100

17.  Identify risk areas with high degree of
assurance in finding results
 Mine through 100% of transactions
 Advantage over business
 Read data from any system, no size limitations
 Bring disparate sets of data in one view – hard
for business to do
 Helps break down complex business processes
Reasons to use Data Analytics

18. Individual Level
 New skill to acquire – lack of commitment to learn
 Lack of vision and support from management
 Overwhelmed with the data - not knowing where to
start
 Unclear objectives – a fishing exercise
 Understanding the data and the business process
 Uncooperative auditee makes the process difficult to
get meaningful results
Challenges of Data Analytics work

19. Organization/Agency Level
 Obtaining access to the data
 Storing and securing sensitive data
 Recruiting, training, and retaining
 Building sustainable processes and
infrastructure
Challenges of Data Analytics work

20.  Build the right team
 Pick right projects - low hanging fruits first
 Identify the need for data analysis at the
beginning of your project
 Understand the data and the business
process
 Validate your results
How to Leverage DA for Audits

21. Sample Tests
 Duplicate Payments
 Compare two transactions with same Invoice Number, Invoice Date,
Invoice Amount
 Check for duplicate entries in vendor master – same name, tax ID/SSN,
bank account, address, phone number
 Identify vendors who repeatedly submit duplicate invoices
 Procurement
 Compare contract price (PO or BPO) against invoice price to verify if
vendor is honoring agreed upon pricing terms
 Check if vendor is honoring discount terms – compare PO vs Invoice
 Check if Accounts Payable is losing early discounts because of late
payments – compare discount allowed per PO/Invoice vs discount taken
 Check if there is opportunity to negotiate longer payment terms with the
vendors – most companies are asking for 45 to 60 days

22.  Material Price variance (use following steps)
1. Aggregate PO quantity and amount by material no and vendor no.
2. Calculate average price per material unit per vendor (Sum PO Amt /
Sum PO Qty).
3. Identify the lowest price per material unit per vendor and segregate
vendors who charged 10% more than the lowest priced vendor.
4. Calculate the higher amount paid for each material by multiplying the
average lowest price paid for that material with the total quantity
bought from all vendors.
 Timekeeping
 Filter timecards with more than 24 regular and overtime hrs in a day.
 Identify employees who submit excessive regular hours in one day to
hide overtime (16 hrs or more).
 Filter employees who reported regular and overtime hrs on 30 or more
consecutive calendar days.
 Filter employees whose weekly overtime hrs were at least as many or
more than their regular hrs.
Sample Tests

23.  Health Care Fraud Indicators
 Practitioners with high average payments
 Practitioners charging 3 times more than the average amount
per Procedure Code
 Practitioners using a Procedure code 3 times more frequently
than other practitioners with similar patient volume
 Practitioners with 3 times more than average units per
Procedure Code
 Practitioners charging 6 times more than the average amount
per Diagnosis Code
 Practitioners with high number of new patients
 Practitioners with high transaction volume
 Practitioners serving patients with high medical visits
 Practitioners not charging copay in high number of visits
Sample Tests

24. QUESTIONS OR COMMENTS
Vijay Chheda
202-906-4661
vijay.chheda@amtrakoig.gov