
State found $117k in double payments through data analytics - zodiacpanther
https://www.routefifty.com/finance/2019/12/ohio-found-117000-double-payments-through-data-analytics/161747/
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DoofusOfDeath
All things being equal, catching $117k in double payments sounds great.

I'm curious of it's a net win, though, once all the costs (and benefits) are
considered.

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chance_state
I'm wondering the same thing. $117K out of what total?

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gunshai
So the article is a bit confusing, as it says in a year the state processes
over 18 million dollars in transactions.

However the pilot program only analyzed transactions from Jan to Sept. For all
state agencies (which seems impressive from an aggregation and governance
stand point). With in that time period it found 117k in duplicates, so
assuming that dollar/transactions are at a constant rate through out the year
(they aren't).

117,000/(18,000,000 * (8/12)) ~ .975 % loss in state to vendor(?)
transactions.

Put another way, with in the time period they studied assuming 12 million
dollars in transactions were made, they can potentially recuperate roughly 1%
of the total value transacted.

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Mathnerd314
They process 18 million transactions per year, total, not 18 million dollars
of transactions. And they only found 56 duplicates, i.e. a 0.0004% rate. (56 /
(18e6 * 8/12))

For comparison there's a Kaggle dataset of 2 days of European credit card
transactions from 2013. It contains 284k transactions of which 0.147% are
fraudulent.

This 1000x difference can either be good since it means the state is mostly
paying appropriately or bad since the detection is not as good as the credit
card company's.

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gunshai
>18 million payment transactions

god damnit you're right. whoops

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mistrial9
A recent Masters graduate trained in data science with Pandas, and also
accounts payable work experience, got hired very very fast on good terms when
the hiring department found out how facile and fast the Pandas python approach
was to finding duplicate or other problematic payments. Maybe the novelty will
wear off, but right now, this is absolutely practical.

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toomuchtodo
Would love to see this skill set put to work automating away a lot of
accounting functions. I know too many accountants (Controllers, specifically)
doing mind numbing work.

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user5994461
The mind numbing work is what give them a salary to provide for their
families. They might not like unemployment as an alternative.

I've met certified accountants whose daily job was to take an excel spread
sheet, add 1% to every cell with a number, then return to the client. It's not
automated but not because it can't be automated.

~~~
toomuchtodo
Automation is coming regardless. Political and economic systems must adapt to
soften the blow. People will need to find purpose and meaning elsewhere than a
job that can be automated. I suggest family, community, and self development,
but to each their own.

As a disclaimer, I have recently become enchanted with automating accounting
work due to hearing about the problems accounting functions face. I'm a tad
biased.

~~~
user5994461
You'd think that but nope. Well, not as quickly or as strongly as one would
anticipate.

Large banks, automated trading shops and assimilated have automation, because
it's their jobs. Other things don't.

Recruiting chartered accountant is easy and cheap. Recruiting developers that
can deliver is not as easy or as cheap. Bear in mind that it's not a tech
environment so no source control in place, no servers to deploy to, won't be
easy to execute.

~~~
toomuchtodo
Okay. I'm still going to take a crack at it, working in tech within finance.
Worst case scenario, I fail and have a story to tell.

~~~
user5994461
I worked in finance too, trading platforms in investment banks and prop
trading shops. There hasn't been accountants there for a long time. Places
that still rely on manual labor are a very different kind.

~~~
toomuchtodo
Agreed. In those cases, where the business is stubborn, you might have to
consume the entire business [1] [2] to be able to enact automation in the
underlying functions. That's also the question, right? What tools can you
develop (Similar to Brex and Stripe) that make it exceedingly more simple for
upstarts to compete against the entrenched? If I can't sell to your internal
divisions, maybe I go get some VC and compete against your whole business.
Lots of margin hiding as inefficiencies in the economy still, just have to go
get it.

Give me a lever long enough.

[1] [https://a16z.com/2011/08/20/why-software-is-eating-the-
world...](https://a16z.com/2011/08/20/why-software-is-eating-the-world/)

[2] [https://techcrunch.com/2016/06/07/software-is-eating-the-
wor...](https://techcrunch.com/2016/06/07/software-is-eating-the-
world-5-years-later/)

~~~
user5994461
Remind me, saw a fintech company with almost a billion in VC funding earlier
this year. Basically a bank doing loans.

The whole business was based low cost labor taking whole days to evaluate
stuff manually and write risk reports. Crazy thing is they were hiring loads
of developers and data scientists, but the core of the business is all manual.

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dangerboysteve
I know the comments are all "how much money did they spend to find $117K in
duplicate payments" and I am one of them. But if this system helps in
identifying process/audit flaws then its a good thing.

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kylek
Does this mean the state isn't SOX compliant? I thought reconciliation was a
requirement

[https://en.wikipedia.org/wiki/Reconciliation_(accounting)](https://en.wikipedia.org/wiki/Reconciliation_\(accounting\))

~~~
xxpor
Are states required to be in the first place?

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ConcernedCoder
which begs the question: "how much did the data analytics cost?"

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madenine
SELECT TransactionID, Amount, COUNT(*) FROM Transactions GROUP BY
TransactionID, Amount

I'll take 10% of savings

~~~
ellisv
HAVING COUNT(*) > 2;

I'll take 9% );

~~~
madenine
HAVING COUNT(*) >= 2;

Back to 10%

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elhudy
Add a date field or you might get legitimate duplicates if the payment amounts
are the same across months.

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TheSoftwareGuy
They shouldn't have the same transactionID then, no?

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elhudy
Wouldn't think so. Each transaction ID would represent a unique transaction?

>Other double payments made by mistake included times that the state received
multiple invoices.

I would assume each paid invoice was a new transaction ID. The real problem
seems like there are two invoices being paid. Not that there are two
transactions (which seems like just a symptom). It's possible that each
invoice even has it's own ID.

