How ThirdLine is revolutionizing internal auditing at the City of Tulsa

About the City of Tulsa
The City of Tulsa has a team of internal auditors and wanted a tool for continuous auditing superpowers.

Cathy Carter’s last job title before she retired from the City of Tulsa in 2011 after more than 20 years of service was Chief Risk Officer. She advocated for a replacement, but no one was hired to fill the position after she left—or even two years later when Carter was elected City Auditor.

“So I decided to try a new route...finding an automated way to monitor financial risk,” she said.

Cathy implemented ThirdLine to detect fraud, waste, and abuse before it leaves the City’s door. Hundreds of data analytics integrate with the Tyler Munis Enterprise Resource Planning (ERP) system to flag high-risk transactions across financial processes, and the results refresh in interactive dashboards.

“What we're doing here is revolutionary, we haven't ever done this before,” Carter said.

Common roadblocks to automation for internal auditing departments:

  • Lack of Access —> “I’m unable to get my hands on the right information.”
  • Complicated Data —> “I don’t know which of the thousands of data tables I need.”
  • Lack of Resources —> My budget is tight, and data analysts are hard to find. 
  • Manual Analysis —> “My team is having to perform manual spot-checks.”

Problem: Complicated data and lack of resources make automation seem impossible

Automated detection of fraud, waste, and abuse was an exciting prospect for Carter and the City of Tulsa. However, there were many roadblocks standing in the way:

Lack of Access

Like in most municipalities, the IT department was the gatekeeper Carter and her team needed to work with in order to access the necessary data for analysis. For many auditing teams, it can be difficult to know what data to ask for and get the right information in a timely manner.

Complicated Data

Even though Carter and her team had an idea of what they wanted to audit, it would have been incredibly complex and time-consuming to wade through the thousands of data tables IT provided and identify which ones they needed for an audit.

Lack of Resources

Like most municipal leaders, Carter deals with budget cuts, obsolete technology, and administration turnover, which can affect her team’s plans and priorities. Plus, data analysts are hard to find—and keep—when jobs and salaries in the tech industry are competitive.

Manual Analysis

Even with the resources and the data, without a continuous analytics solution like ThirdLine, Carter’s team would have to perform manual spot-checks, analyzing pieces of data at a time to extrapolate answers.

These roadblocks make automation seem impossible and drag out the auditing process even further for municipalities large and small. As a result, many internal auditing departments (if the municipality has one) can complete only one or two thorough audits per year. 

ThirdLine Result:
A person outside the City of Tulsa changed a vendor’s bank account number, initiated a deposit of over $600,000 to that account, and then changed the account back to the vendor’s previous number. Just one of ThirdLine’s 400 analytics flagged this transaction, and the internal auditing team was able to intercept the deposit, saving the City time and money.

Solution: ThirdLine detects fraud, waste, and abuse automatically through simple integration with Tyler Munis

The ThirdLine team served as the translator between the City’s internal audit and IT departments and made it clear: ThirdLine was not a new ERP system; it was an analytics layer on top of existing Munis data. The only thing IT had to do was provide a backup copy of the database to the ThirdLine team. 

With every refresh of the City’s Munis data, ThirdLine analytics updated across dashboards, showing Carter and the internal auditing team:

  • Where transactions were flagged for risk in a specific financial process (e.g., Payroll)
  • Who was involved in creating and approving the transactions (employees, vendors, etc.)
  • When the transactions were created and approved depending on the preferred audit scope: last week, last quarter, or as far back as the City’s implementation of Munis.

They had the answers to create their audit plan, reduce risks and inefficiencies associated with weak processes, and test data-driven controls.

Customer Testimony:

Using ThirdLine, the City of Tulsa identified behavior that led to a revised policy. The analytics found that employees used purchasing cards to make purchases from an employee-owned business, which is against City code.

“This is one of the more helpful analytics that’s been developed as part of the dashboards created by the Auditor’s office. Once this has been made available for managers to use, we can monitor this regularly [...We] will follow up with HR to see if this could be explored as a personnel policy to ensure that we have a registry of employee-owned businesses.” —City of Tulsa Finance Department.

With ThirdLine, Cathy Carter found an automated way to monitor financial risk. Overcoming the common roadblocks to automation was just part of the City’s larger accomplishment.

Undetected financial risk can escalate into harmful fraud schemes, which can last more than a year and cost organizations 5% of their annual revenue, according to the Association of Certified Fraud Examiners. For municipalities, lost revenue translates to mishandled taxpayer dollars and results in diminished public trust.

Now, Carter and her team have the assurance of 400 data analytics running continuously to detect fraud, waste, and abuse across these 10 financial processes at the City of Tulsa:

  • Accounts Payable
  • Accounts Receivable 
  • General Ledger
  • Human Resources
  • Payroll
  • Purchasing Card
  • Purchasing
  • Separation of Duties
  • Travel & Expense
  • Vendors

ThirdLine is available to municipalities across the U.S. To learn more and request a demo, please visit our Demo page.

Note: Cathy Carter did not receive compensation from ThirdLine for her participation in this article.

How ThirdLine is revolutionizing internal auditing at the City of Tulsa

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