FCPA

The One Tool You Need for an Effective FCPA Compliance Program

on September 02, 2014

In Rebekah Mintzer’s Corporate Counsel article, “Stepping Up Your FCPA Compliance Program”, she quotes experts who accurately point to the positive, albeit murky definitions, of effective anti-bribery and corruption programs in the event of a government investigation.  The challenge with many “how to improve FCPA compliance” blogs and commentaries is that while they offer reasonable advice on opportunities for improvement, they usually end with a recommendation to hire “FCPA Inc.” to address all of the tricky pieces.

The experts in the above blog do however emphasize that compliance is a challenge under the FCPA because there is no such thing as “one-size-fits-all” when it comes to designing a program that will not only operate effectively, but also positively influence government investigators.  To start an effective FCPA compliance program they recommend transactional testing of a company’s accounting data as a way to understand where risks exist and to monitor these risks on an ongoing basis. While transactional testing is a very good recommendation, I disagree with their assertion that this testing requires independent experts and specialized expertise such as forensic technology experts.

The first step most companies can take is to leverage turnkey solutions for transactional analysis.  Oversight Systems’ Insights On Demand is a great example of this type of solution that provides pre-built analytics designed to test corporate systems for potential bribery and corruption risks.  Solutions like Insights On Demand leverage the best practices developed across many complex, global companies. These “insights” automatically analyze all company transactions for the greatest risk for bribery and corruption.  Insights On Demand, as an example, makes it easy for compliance leaders to send data to the Insights On Demand cloud where it is analyzed for risk.  The highest risk transactions are then identified and made available in web-based dashboards and a case management system for reviewing and investigating the highest risk transactions.

In Mintzer’s article, the experts from Freeh Group identify various high-risk scenarios such as government relationships, commissions, sponsorships, donations, gifts and hospitality, and facilitating payments that are often signs of risk.  Web-based solutions like Insights On Demand for FCPA compliance automatically analyze 100% of an organization’s transactions to identify three things:

  1. transactions that represent potential risk
  2. the employees and third parties who are most often associated with the highest risk transactions
  3. the organizational units and geographies that represent the highest potential risk

For most global businesses, this type of automated analysis can be performed for well under $100,000 per year (per business process) to routinely analyze transactions and provide results.  This represents a very small percentage of the costs independent experts from “FCPA Inc.” would charge to perform these types of analyses on a company-by-company basis.

Effective compliance programs don’t have to include big expenditures from “FCPA Inc.”  There are software-as-a-service (SaaS) solutions that make best practices compliance analysis available at a fraction of the cost of high cost consultants.

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