Institute of Financial Operations - North Texas

Institute of Financial Operations - North Texas

1Q 2015 Meeting Minutes

The quarterly meeting of the North Texas Chapter of the Institute of Financial Operations was held on February 18, 2015 atthe offices of KPMG in Dallas, Texas. Lunch and networking started at 11:00 AM.

Sandy Champion, President of the NTIFO chapter, opened the meeting with a discussion regarding the Regional Forum that National is planning for the Dallas area. The mini-Forum will be open to all IFO members and would consist of a day-long series of education sessions. The event would be free to IFO members, and non-members may be able to attend for a fee. The event is tentatively scheduled for Thursday evening (reception) on November 19th and all day Friday November 20th. Sandy is going to work with National to try to have the entire event scheduled for November 18th. Having an all-day seminar on Friday of the week prior to Thanksgiving would limit attendance. Many people would not travel to the venue a second time if the reception was the evening before. Our hope is to have the event on Wednesday the 18th with the reception following the educational sessions. We are all looking forward to this wonderful educational opportunity and hope that we can have a great turn out.

Sandy thanked Freeman for providing the lunch for our meeting. She also thanked Denise and Ronda with KPMG for providing the room, which had spectacular views of downtown Dallas and surrounding areas. KPMG also provided free parking! Attendee introductions were made.

Sandy introduced our educational topic, ACH Fraud Prevention, presented via live webinar by Mary Schaeffer. Tom Lyman, Vice President of the chapter, gave a brief bio of Mary. Mary is very well known for the educational seminars that she presents at Fusion and other events. She is the Publisher and Editorial Director of AP Now. She was recently named as the Education Director of the IFO as well as the Editor-in-Chief of their magazine, Financial Ops!

ACH Fraud Prevention: It’s Everyone’s Problem!

Mary provided an overview of the seminar, which covered:

• Wire transfers
• ACH payment basics
• Fraud statistics
• Description of new ACH frauds
• Tools available today to combat the frauds
• Emerging issues related to devices
• What you should be doing to protect your organization

Mary’s main topic was ACH fraud which is relatively recent, but she provided fresh insight into various other scams that have been around for years. Internal fraud is the elephant in the room that no one wants to talk about but must be confronted. Fraud committed by employees with insider access can result in thefts against your company, customers, or suppliers. Tight internal controls and segregation of duties must be maintained to guard against this. Unfortunately, the old toner fraud is still around after all these years, not to mention the light bulb, office supply, and advertising scams. That’s because they work! Educate your employees against giving out company information to help prevent your company from being scammed.

Wire Transfers

Wire transfers are same-day payments and tend to be large dollars. Be extremely careful about who you give your company’s routing and account number to. Avoid giving this information over the phone. Companies usually have dual controls over wire transfers so that one person initiates the wire and a second person releases it. Bank accounts that accept wire transfers should be blocked against outgoing wires and ACH payments. Outgoing wire accounts should not allow debits and should be swept so that there is no remaining balance to be accessed. Daily bank account reconciliations should be done in order to identify, report,and recover unauthorized transactions to the bank within 24 hours. Although consumers have 60 days to report an unauthorized banking transaction, businesses (including non-profits, universities, etc.) have only 24 hours.

ACH Basics

An ACH credit is an electronic payment initiated by the payer. The funds are transmitted via a file to the bank to transfer funds from the payer’s bank to the payee’s bank account. The funds are available to the payee the following day. ACH credits are commonly used for direct deposit of payroll and social security payments. This is considered the preferred method for making supplier payments.

An ACH debit is a payment that is electronically pulled from the bank account by the payee. These are commonly used for mortgage and insurance payments in the consumer world. In the business world, some payments, particularly taxes, require ACH debits. A separate account should be maintained for ACH debits and it should be restricted to certain payees.

ACH Fraud

Businesses must continually protect themselves against ACH fraud. Criminals who commit these scams understand the banking and computer systems and constantly find new ways to commit fraud. Find out what products your bank offers to protect your accounts and study them carefully so that you will understand what they do.

Tools to Combat ACH Fraud

• ACH Blocks – Bank accounts that will not be used for ACH debits should be blocked.
• ACH Filters – These limit the initiator and do not limit the dollar amount.
• ACH Positive Pay – This is just starting to emerge and works differently from check Positive Pay.
• ACH Alert – Triggers an actionable alert when and ACH debit arrives so that account holders can detect fraudulent entries immediately and return them instantly.
• ACH COPS – Allows a bank to compare ACH credit entries against a valid list of payees for each originator and protects against account highjacking.

Advice from the FBI to Prevent Man-in-the-Middle Frauds

A new scam is called the Man-in-the-Middle. Scammers use technology to spoof an email account so that it appears to be coming from one of your employees. They may send out an email to your customer asking that payments be sent to a new bank account. On the other side, they may email your vendor asking that goods be drop-shipped to a different location. An AP employee may get an email that looks like it is coming from the CEO of the company asking that large amounts of money be wired immediately. Always take a moment to verify an unusual request with your supervisor or upper management.

• Establish additional communication channels to verify significant transactions.
• Use digital signatures in emails, if possible.
• Avoid free, web-based email. These are sometimes used by employees to circumvent strong firewalls.
• Do not use the “Reply” option to respond to any business emails. Instead, use the “Forward” option and either type in the correct email address or select it from a contact list. Mary discussed how such a simple thing to do is very difficult to remember! It can prevent someone from hacking your account with an email address that appears legitimate.
• Be aware of changes in business practices. If you are suddenly asked to contact a vendor via a personal email address when all previous correspondence has been on company email, make sure that you are still communicating with your vendor and contact them by phone or company email.

Steps to Protect Your Organization

• Train employees in internal security.
• Practice segregation of duties.
• Do not share passwords.
• Keep anti-virus software up-to-date.
• Lock your computer when away from your desk.
• Notify the bank when an employee with payment authorization leaves.
• The contact in the vendor master is becoming more important! Update this information whenever possible.

New Problems

Phishing is defined as looking for information you have no right to access. In ACH frauds it is usually email or computer takeover. New variants include Vishing, a phone-based version of phishing, and Smishing, Vishing combined with text messaging. These are techniques used by scammers to recruit money mules, people who are paid to transfer money illegally acquired.

There have been some ridiculous email scams over the years. Who hasn’t received an email from a member of a wealthy Nigerian family asking for help in getting a large sum of money out of the country? In every variation, the scammer promises obscene amounts of money for small tasks. Like most scams, this is too good to be true, yet people still fall for it. New email scams may seem much more legitimate. They can appear to come from NACHA, UPS, Citibank, charities, lotteries, and the list goes on. All are methods that can be used to either get you to provide personal information or send money. Or, by opening links or attachments, allow hackersaccess to your computer for the purposes of obtaining data or spreading computer viruses or worms. These forms of cyber espionage have been used against individuals, businesses, and governments as well as social networking sites.

In closing, Mary reminded us that we must be alert against fraud and realize that crooks will continually look for new approaches. Mary took questions from the audience and invited attendees to contact her at if they had any questions or stories to share. We appreciate Mary joining our meeting and providing a very informative Webinar.

Chapter Business

Membership Update – Anita Poynor

As of the end of January 2015 we have 189 members including 13 new members in January alone! We grew 34 new members in 2014 and had a total of 46 between new and rejoined members. We currently have $559 in our chapter bank account. This money goes to purchase gift cards for door prizes and other fees that the chapter may need to pay.

Chapter Spotlight – The North Texas Chapter has 3 of 25 longest-running members in the IFO. Bennie Bragewitz of Scott & White Healthcare is in the top 10 or 11. Bennie is one of the few members nationally who has never let her membership lapse since 1995!She has always been a great supporter of the IFO. Sandy Champion and Jan Wallace are below Bennie, but still in the top 25.

Website/Email update – Joanna Wilson

We still have somebusiness books from the IFO for sale. Quantities are dwindling so be sure and purchase soon if there is a book you want. They are only $5 each!

If you are a member and are not receiving emails from the IFO, let Joanna know and she will make sure that national has your correct email address. You can also log in to the IFO website and check your profile to make sure that it is correct.

Chapter Advisory Committee– Tom Lyman

The committee has been working on regional events all over the country, such as the one planned for our area in November. There is a lot of work that goes into organizing these mini-Fusions and planning the sessions. There is also a call for presentations at Fusion due March 1st. If you give a presentation as Fusion, registration is free! Think about it for next year.

IFO Accounting – Tonya Fyke

About 3 years ago, Tonya started her own company doing accounting for small businesses. The controller at the IFO left recently and they decided that, instead of hiring a full-time person, they would outsource this function to Tonya. Tonya helps the IFO at month end and quarter end to present reports to the Board. Tonya mentioned that if non-members sign up for Fusion, they also get a full-year membership included in the price. A lot of people have already signed up for this year’s Fusion and attendance is trending up. This is the 25th year anniversary and Frank Abagnale is among the speakers. If you have ever heard the “Catch Me If You Can” former con-man speak, you know that it is worth the registration fee for this speaker alone. He now helps the FBI and businessesprevent fraud as a security consultant.

The IFO is making a concerted effort to be of greater benefit to the membership. The magazine, Financial Ops, with new Editor-in-Chief, Mary Schaeffer, is a noticeable improvement over previous publications. It is well-worth your time to read it. Ken Brown, who was interim CEO when he visited our chapter in November, is now the CEO. Ken welcomes your opinions and suggestions as he strives to improve the organization.

Requesting W9s results in a visit by the Richardson Police – Sandy Champion

Sandy is consulting on a project for a company in Richardson to help a company with their 1099s. When Sandy began the project, the company had 4,200 incorrect tax ID numbers in their database. It was decided that a W9 solicitation was in order. This company has over 7,000 tax entities representing homeowners associations and other property management companies all over the country. The W9 letters were from the parent company. The letters explained who they were and why the information was needed, and most of the recipients simply responded appropriately with a completed W9. The letter raised a red flag with one person in Hawaii who feared that it was an identity theft scam. He called the Richardson police and asked them to investigate. The police showed up at the door to determine that it was a legitimate company and that the signer of the letter was really the Accounts Payable Manager! Sandy has now seen everything!

Sandy hopes that everyone can attend Fusion! We will have a big party! The hotel block is now available so be sure to make your reservations. More information on the regional Fusion in November coming soon!

Upcoming event:

2015 IFO Forum “25th Anniversary” – May 11th through 14th, 2015 – Gaylord Palms in Orlando – Frank Abagnale will speak and Sandy Champion will be recognized!

Upcoming 2015 chapter meetings:

Wednesday, May 20, 2015

Topic: Messy Desk, Missing Papers, and Totally Too Many Piles

Speaker: Lorraine Brock – Get Organized

Facility: City of Richardson Civic Center – Sandra Gennaro

Food: Commerce Bank – Lee Wood

Contact: Sandy Champion/Lorraine Brock

Wednesday, August 19, 2015

Topic: Vendor Calling – Where is my payment?

Speaker: Phil Binkow – Invoice Info

Facility: Sabre – Carrie Chambers

Food: Invoice Info – Phil Binkow

Contact: Phil Binkow – Invoice Info

Wednesday, November 18, 2015 (exact date still being confirmed)

North Texas Regional IFO Forum

Speakers & Topics: TBD

Facility: TBD

Food: IFO

Contact: Ken Brown & Kimberly Chatfield, IFO

Door prize winners were:

$50 Visa gift card from the NTIFO chapter: Tom with Animal Supply

$25 Visa gift card from the NTIFO chapter: Joanna with Freeman

$25 Visa gift card from the NTIFO chapter: Lisa with Novartis

Roxanne with CTMI, Martha with Baylor, Darlene with Freeman, Cathy with Oxy, and Amanda with Southwest Airlines, each won:

Connolly/IAPP bag with:

Green bag from Lamont, Hanley & Associates Inc

Lighted ball and whoopee cushion from CPRS

Drinking glass and blue sharpie from iPayables

Pen, notepad, and screen cleaner from Commerce Bank

Frisbee from IBML

Frisbee from XTglobal

Sticky notes and stylus with light from Commerce Bank

Mouse pad from Apptricity

Ear of corn squeezee and mini USB 4-port hub from the IFO

Highlighter with post-it markers from CDS Global

Sumo wrestler squeeze from MTS Software

“IAPP Professional Standards Framework”, Edition 2.0 from the IFO

The meeting adjourned at 1:00.

Jan Wallace

Historian

Books for Sale may not reflect current availability. They are only $5 each so if you are interested, please purchase soon!

Title / Author / # Available
Detecting and Preventing Fraud in Accounts Payable / Peter Goldman / 9
Detecting and Preventing Fraud in Accounts Receivable / Peter Goldman / 20
Extraordinary Circumstances / Cynthia Cooper / 3
How to Hire a Champion / David Snyder / 6
Idealized Design / Russell L Ackoff, Jason Magidson, Herbert J Addison / 5
Implementing a Control Self-Assessment Program in Your AP Department / Chris Doxey / 1
Inside AP / Diane Sears / 10
Million Dollar Rainmaker / Ed Robinson / 9
On-Demand Supply Management / Douglas A Smock, Robert A Rudzki, Stephen C Rogers / 4
Rethinking Retention in Good Times & Bad Times / Richard P Finnegan / 10
Sex on the Moon / Ben Mezrich / 4
Somewhere Inside / Laura Ling & Lisa Ling / 5
Straight to the Bottom Line / Robert A Rudzki, Douglas A Smock, Michael Katzorke, Shelley Stewart Jr / 5
Success by Default / Michael Solomon / 5
Tears of Rage / John Walsh / 1 left
The 8 Pitfalls of Accounts Payable Automation / Christopher Elmore / 5
Unclaimed Property / Tracey L Reid / 1

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