icg commerce – confidential and proprietary information sox in the city purchasing management...

ICG Commerce – Confidential and Proprietary Information

SOX In The City

Purchasing Management Association of Philadelphia

November, 2009


Sarbanes-Oxley Background

Who are -Sarbanes and

Oxley?


Officially

Paul Sarbanes (D) was a senator from the State of Maryland and has served in politics for almost four decades, first as a member of the Maryland House of Delegates and then serving as a Congressman from the Third Congressional District for three terms. Since 1977, he has served in the United States Senate.

Michael G. Oxley (R-Ohio) was serving in his eleventh term in the House of Representatives and is Chairman of the House Financial Services Committee. This Committee oversees Wall Street, banking and the insurance industry.


But To The People Who Have To Adhere To The Sarbanes Oxley Act

Nothing But Trouble


Sarbanes-Oxley Act of 2002

Establishes the Public Company Accounting Oversight Board to oversee the audit of public companies that are subject to securities laws; establish the rules of

conduct surrounding audits, auditors, and companies that trade securities on the

public market.


In Its Simplest terms, What Is the Sarbanes Oxley Act of

2002?

REGULATED COMMON SENSE


What Venue Will Cause The Most Damage To Your Career?

Jail


What Are the 3 Most Important Letters In The Corporate World?

CYA


Pre-SOX, What Did Every CFO Have Embroidered On His or Her Pillow?

IGNORANCE IS BLISS


Is SOX Compliance A Pain.

Oh Yeah!


But Is SOX Extra Work?

It Depends On What You Have Been Doing All

Along.


WARNING!! THE ANSWER TO THE NEXT SLIDE IS VERY SCARY

SO HOLD ON TO SOMETHING SECURE & TAKE A DEEP

BREATH


Why Was SOX Created?

To Make EVERYONE Accountable.


Sox Amended Federal Law Making The Following CRIMINAL Offenses

Knowingly destroying, altering, concealing, or falsifying records with intent to obstruct or influence either a

Federal investigation or a matter of bankruptcy…

Fines up to $5 million and imprisonment up to 20 years now

apply.


What Most People (including Auditors) Think

People involved in Corporate Travel and Meetings & Events have a great life. They

have never seen the back of a plane. They stay in suites, have massages, play golf, go to exotic destinations and do it all

on Company time.

Why Are You Likely Targets?


Are you sitting here & thinking:

Not me or my staff. We are proud of our ethical

practices.


Site Inspections: The Invitation

Take a Tour & Have Lunch

Or

Stay Over & Have A Mini Vacation

In choosing a venue, has this ever happened? Does it serve a legitimate purpose?


Sequence of Events

(What The Hotels Want)


See Room


Say “Very Nice”

Have a Nice Lunch / Stay


Feel Appreciative (Guilty)

Give Them Business


What Differentiates A “Bribe” from A Site Inspection?


Drilling Down :What Should Be Taking Place

DO YOU DO THESE THINGS? ARE THEY DOCUMENTED & PUT TO USE?


The Doorman

• Open The Door

• Take Your Bags

• Polite

• Well-Groomed


Reception

• Polite

• Helpful

• Quick

• Uses Your Last Name

• Remembers You During Your Stay


Bell Staff

• Polite• Helpful• Neat• Speaks & Understands

Your Primary Traveler’s Language

• Quick• Verbal Tour of Room &

Property


The Elevator

• Safety

• Lighting

• Cleanliness

• Ratio To Rooms


The Hallway

• Lighting

• Safety

• Signage

• Maintenance

• Carts


The Room• Décor• Cleanliness• Bed Comfort• “Real” Pillows• Safe• Minibar• Unoccupied Outlets• Safety• Noise From Outside The

Room


Workspace

• Lighting

• Empty Outlets

• PC Connections

• Deskspace


The Bathroom

• Lighting

• Amenities

• Cleanliness

• Water Pressure

• Hot Water


The Business Center

• Hours of Operation

• Equipment Available

• Laptop Support

• Fees


Checkout

• PM Folio Delivery

• Bell Staff

• Reception

• Correct Billing

• Valet Parking


Things You Might Want To Do When Staying Overnight To Test A Property

• Have someone send you a fax during the day and again at night (How long until delivery or notification took place?)

• Call housekeeping for an iron• Call the front desk at night and ask for

directions to the nearest hospital• See how soundproof the room is from

noise in the next room or hallway


• Lose your room key & ask for a replacement (Did they ask for an ID before giving you another key?)

• Valet park your car & time how long it takes to retrieve it at 8 AM & again at night

• Use something from the minibar & see if the item is replaced (& that the charge is correct when checking out)

See handout for additional details


CYA

File A Report of Findings

Make Others Aware Of Your Actions


What Questions Should You Have Been Asking All Along?

• Is the person authorizing financial commitments authorized to do so?

• Is the person signing the agreements authorized to do so?

• Will charges be applied to the correct GL category or be buried elsewhere?

• Is there a paper trail on every commitment? Was someone willing to sign their approval?


• Did you know when someone was doing something improper but looked the other way?

• Was someone given a “freebie” in order to close the deal? • Have you protected yourself from an executive who suffers

from Corporate Amnesia?• Will all expenses pass an auditor’s scrutiny?• Do you apply the same care to all details that you do to your

accounting for petty cash?


So What Is The Story SOX Wants You To Tell?


Like Any Good Story (or Recipe), It Must Have:

• A Beginning

• A Middle

• An End

Ever leave out an ingredient or skip a few pages?


The Beginning…

• Written Procedures & Compliance Standards Including A Code of Conduct

• Senior Management knowledge, Involvement & Endorsement

• Creation Of A Hotline For Anonymous Calls & Questions


The Middle…

• Communicate The Policies, Procedures, & Expectations To All Involved

• Train All Employees To Adhere To Ethical Standards

• Perform Reasonable Testing Throughout The Process


• If Problems Arise, Apply Disciplinary Action Uniformly & Fairly To All Involved

• As Problems Arise, Modify The Program To Avoid The Problems From Repeating Themselves

The End…


Were The Authors Sneaky?

What does this statement mean?

Only “reporting” companies were required to comply by December 31, 2004, but all

other companies may be legally required to live by the same standards.


Protecting Yourself From Getting Burned


Example: Are Any Of These Things On File?

• A Meeting Request Form (approved & with the purpose outlined)• A Properly Approved Budget• Expenses Properly Supported (can be audited)• A Final Project Reconciliation• Properly Approved Contracts• Properly Approved Invoices• Site Inspection Notes / Form• A Meeting Agenda• A Properly Approved & Thorough Attendee List• A Paper Trail of Alternative Sites or Suppliers• A Statement As To The Training of Staff Handling The Event

(policies, procedures, penalties)• A “Sign-off” Sheet That All Details Have been Examined &

Approved


Site Inspection: Ensuring Its Value

Overall Rating out of 5: (Considering price, location, and all listed below)

Hotel: Number of Rooms:

Address: Number of Floors:

City State Zip: Year Built:

Cards Accepted: Recent Renovations:

Check-in Times/Locations:

Room Type Dimensions Low Price High Price

Nearest Company Office:

Distance to Office:

Nearest Airport:

Distance to Airport:

Amenities: Included Extra Cost Not Available Facilities Included Extra Cost Not Available

Newspaper Fitness Center: In-room hair dryer Spa/Beauty Center: Iron/Ironing Board Pool/Jacuzzi: In-room Safe Golf on-site/Privileges: Coffee Maker Restaurants/Room Service: Bathrobe Babysitting Service: Minibar/Refrigerator On-site Shopping:

Lan Connection Laundry:

Wireless Connection Club Level/Preferred Floors:

Fax Machine Parking: Voicemail ATM: Breakfast Wake-up Service

Facility Ratings 5 4 3 2 1 n/a CommentsBreakfast Hotel Restaurant Hotel Bar Lighting

Interior Design Landscaping Fitness Center Parking Vending Machines Community/Neighborhood Security

Room Ratings 5 4 3 2 1 n/a CommentsCleanliness Lighting Bed/Matress Heating/Cooling Unit Bathroom Room Size/Use of space Furniture

TV/Entertainment System Hotel/Community guides Wake-up Service

Hotel Staff 5 4 3 2 1 n/a CommentsProfessionalism Friendliness

Knowledge Communication Skills Check-in (efficiency) Check-out (efficiency)


Did The Authors Have A Sense Of Humor?

Don’t give authority to “individuals with a propensity to

illegal activities”.


Questions?

Howard Z Brooks: [email protected]

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