New software to expose fraud risks

A group of software developers and engineers might have come up with a new way of fighting fraud and corruption in the corporate and public sectors.

Association Matrix - a web-based software application toolbox launched at the annual Association of Certified Fraud Examiners conference last year - makes it possible for any organisation to monitor every business relationship of its employees, managers and directors.

André Stürmer, software developer and CEO of information and credit bureau Inoxico, said the idea for the tool emerged when clients asked his company for data they could use to check for conflicts of interest among their employees.

"Our clients' requestmade us decide to design a tool that not only finds associations within their companies but does so with depth."

In his latest report auditor-general Terence Nombembe found that R438.1-million in contracts awarded during the 2011-2012 financial year were awarded to companies in which state employees had an interest.

According to Stürmer, the software detects conflicts of interest.

"It will give public entities transparency [and reveal] where these relationships and risks exist, allowing them to manage and monitor those risks."

With 15 clients in the private sector, including two of South Africa's biggest banks, two big law firms and a leading insurance company using it, Stürmer said the toolbox is being wellreceived.

"There has been interest from the public sector but . the use of the software on their side is challenging."

The tool requires that the user upload the identity numbers of employees, directors and managers, as well as the registration numbers of the companies with which they do business.

This information is loaded into a database and cross-referenced.

"The tool is built in a way that doesn't require our intervention," Stürmer said.

"We have extremely secure hardware and software around it to make sure the data cannot be abused."

Only one person in the client's company is given administration rights over the software.

The administrator can add other users and give them special access rights. The forensics component of the toolbox restricts access to prevent an entire organisation from knowing who is being investigated.

"If someone sits on the board of a particular company, the tool can pick that up as well as the business interests and relationships of the people who sit on that board.

"It also goes a level deeper by finding the third party with whom their colleagues share business interests."

Stürmer said clients using the software were surprised by the number of business associations their employees had.

He believes the software could be the answer to the government's corruption problems.

Department of Public Service and Administration spokesman Ndivhuwo Mabaya welcomed the idea.

"Corruption is a societal problem that requires all of us to fight."

The department is establishing an anti-corruption bureau that will investigate allegations throughout the government.