Adding Data Mining and Analytics to Your Tool Box
by Karin M. Smith, MBA, CFE, CFO
Posted on December 12, 2016
This article originally appeared in the November 2016 School Business Affairs magazine and is reprinted with permission of the Association of School Business Officials International (ASBO). The text herein does not necessarily represent the views or policies of ASBO International, and use of this imprint does not imply any endorsement or recognition by ASBO International and its officers or affiliates.
If I were a gambler, I would wager that you conduct somewhat regular maintenance on your vehicle. After all, you invest a signiﬁcant amount of money in your car and want to ensure it gets you to your next destination.
Similarly, we rely on our ﬁnancial data to ensure we have the necessary resources to meet our educational objectives. But how often do we conduct maintenance reviews of those data? Do we rely on the canned reports to tell us if there are problems?
Examining school district ﬁnancial data for potential fraud, misuse, or honest mistakes can be a daunting task. Thousands of transactions make up a school district’s expenditures. Although school business officials often delay examining ﬁnancial data to address more immediate needs, data checks should be a priority. According to the Association of Certiﬁed Fraud Examiners, almost 40% of instances of fraud are detected by management review, internal audit functions, and internal controls.