The pandemic has brought forth a variety of expense challenges to card programs. One of these new challenges that has arisen is handling the expenses associated with PPE (personal protective equipment). PPE expenses have been showing up on many types of expense reports for a variety of reasons.
Some organizations have been buying these items to protect their employees who are working on-site. If not managed properly, this new expense item can harm the successful card program your organization worked tirelessly to build.
If not tracked properly, PPE purchases can increase the risk for fraud, misuse and abuse in your card program. These expense items can also result in both cardholder non-compliance and contract noncompliance.
In this article, we have provided a few tips regarding how to properly manage these expenses through a few critical methods. In addition, we have also noted the specific benefits your card program will reap when these PPE expenses are properly tracked.
1. Change Internal Accounting Practices Around These Types of Purchases
In order to reduce the risk of fraud, misuse, and abuse associated with PPE-related purchases, make sure cardholders are properly documenting these types of purchases.
This involves altering your internal accounting protocols for PPE expenses. Specifically, this involves cardholders either using an accounting code or a GL code for PPE-related purchases. These allow your organization to have clear and specific codes to look up in order to effectively track all PPE-related purchases and check to make sure that all of these purchases are in fact, legitimate transactions.
2. Properly Document PPE-Related Purchases
Cardholders also need to document each and every one of their purchases that is PPE-related. They can do this by filling in the business reasons and noting that the purchase is PPE-related.
This form of documentation provides your organization with another means by which you can easily track all PPE-related purchases. This also ensures if the PPE expenses are in fact, legitimate or if any of these purchases fall under the umbrella of fraud, misuse, or abuse on your commercial card.
In addition to reducing the risk for fraud, misuse, and abuse. This documentation is also important because some organizations are entitled to reimbursements for such purchases. Specifically, there was recently an executive order that stated “K-12 schools are eligible for full reimbursements for PPE supplies such as masks, gowns, and gloves through the Federal Emergency Management Agency’s Disaster Relief Fund.”
3. Perform Deep Dives Into Any New Vendors and Trends That Show Up On Your Expense Reports
Another way to reduce the risk of fraud, misuse, and abuse related to PPE purchases, is to pay close attention to any new vendors or trends that show up.
It is possible that new vendors have appeared on your expense report if they now provide your organization with PPE. However, it is still imperative to perform a deep dive into these vendors. This can help ensure that they are supplying your organization with the correct items as agreed upon.
These insights are another method by which your organization can ensure these purchases are legitimate and not an instance of fraud, misuse, or abuse on the card.
Also, focusing on new trends might be appearing in your expense reports. These trends might include the increase in pandemic-related items that might not have occurred in your card program prior to the pandemic.
Benefits of tracking PPE Expenses In Your Card Program
PPE expenses may be here to stay. That said, there are some key benefits to tracking these expenses in your card program and updating your policies.
- Reduce the risk for fraud, misuse, and abuse related to these purchases through tracking and properly documenting all purchases related to PPE
- Prevent non-compliance from arising by ensuring cardholders are following the exact policies and procedures regarding these types of purchases
- Ensure contract compliance in your program by checking that cardholders are purchasing these items from the appropriate vendors
When cardholders purchase from the appropriate vendors, this helps to ensure that they are buying approved PPE items and not fraudulent PPE or PPE that doesn’t meet the health criteria for protecting against the coronavirus.
Policies and Procedures
Effectively tracking PPE can also help to prevent cardholder noncompliance in your card program.
To begin, your organization cannot find instances of noncompliance for PPE expenses if your policies and procedures do not entail the protocol for PPE purchases.
Thus, your organization needs to implement the rules regarding PPE-related purchases into all cardholder policies and procedures. This includes items such as which types of PPE are allowed to be purchased on the commercial credit card as well as which vendors to purchase these items from.
When tracking PPE expenses, your organization will have clear guidelines in order to look for non-compliant purchases from your cardholders.
Appropriate vendors and preferred suppliers
Lastly, effective tracking of PPE-related purchases allows your organization to confirm that cardholders are doing business with the appropriate vendors and preferred suppliers. Thus, helping to ensure contract compliance.
Some organizations have been defrauded out of money after purchasing fraudulent PPE equipment. By tracking and looking into all PPE expenses, your organization can double-check to ensure that appropriate vendors are being used. This includes checking to ensure all vendors who are listed as providing your organization with PPE, do, in fact, make PPE-related items that meet federal inspection requirements to be considered for effective use against the coronavirus.
When tracking your PPE expenses, your organization needs to make sure that your cardholders are doing business with your preferred suppliers for these items. These two actions will help to promote contract compliance within your program.
How to Start Handling PPE Expense Challenges
If these last two years have proved anything, it is that card programs can continue to thrive with the proper insights to conquer these new challenges.
Your organization has worked so hard to build the successful card program that stands before you today.
Failing to manage these new expense items, can result in fraud, misuse, abuse, cardholder noncompliance, and contract noncompliance. All of which threaten the success of your card program.
In addition to the insights above, there are several ways Card Integrity can help when it comes to PPE expenses. Card Integrity has a plethora of expense solutions and Forensic Financial Specialists can help you handle these challenges.
We track and report on all COVID-related spend. This would include tracking and reporting on any PPE expenses to account for all of your spend related to PPE. We can perform an in-depth analysis of any PPE-reported purchases by unveiling specific details. These details include:
- Level 3 data
- Category of vendor
- Customers documentation in business reasons or accounting/GL Code
See the results identified above through an online demonstration of our flagship service, Data-Wise.
Card Integrity sets up alerts directly focused on pandemic-related items. Then, our team thoroughly researches the vendors associated with these purchases. This helps weed out any suspicious vendors or vendors that haven’t been on your expense reports to ensure they do in fact sell PPE. Alerts can also be set up to find any cardholders buying unapproved or customized PPE.
We monitor directly for any instances of cardholder noncompliance or contract noncompliance based on your exact policies and procedures. We also help educate cardholders through a cardholder training service. This can be customized around your unique policy details.
To see how your card program can benefit from having expense reporting with a goal-oriented approach, ask for an online demonstration from Card Integrity today. Or, Contact Card Integrity today at 630-501-1507