New validation method and IT system in DK

1. New validationmethod and IT system in DK Søren Burman Nordic meeting 2014, Tórshavn

2. Outline • The validation system • Where to make the cut… • Manage and editcases • Future plans

3. The validation system • The automaticvalidation system consistsof three procedures. • For eachenterprise, the data is testedagainstitshistoricalreportson the service item level • A score is applied to all observations basedon: • How large is the given observation compared to earliervalues for the given cell. • How large is the normal variation for the service item in question. • How large is the observation in absoluteterms.

4. The validation system • For each enterprise, the data is tested against its historical reports on the total flow • This is done in order to capture missing trade • Similar scoring system as in procedure 1, but with a lower ”impact” • Captures enterprises that suddenly report zero trade

5. The validation system • Check for use of new service items • If a new service item code is used that has never been used before, it cannot be tested against its historical reports • Captures errors where enterprises use a wrong code, but maintain the same level of trade • New reporters willnot betreated in the validationsystem untilsixreportsareapproved • All new reporters must bemanuallyapproveduntilsixapprovedreportsareavailable

6. The validation system Manual approval list Non validatedreports Lessthansix approvedreports Automatic validation system Cut off What is considered ”wrong” enough Possibleerror list – sorted by value Procedure 1 Procedure 2 Procedure 3 Possibleerror list – sorted by score

7. Where to make the cut… • Not all deviations are errors • Score gives an indication of severity • Below an estimated view of the hit-rate for the year 2012

8. Where to make the cut… • A case is defined as a report from an enterprise • Many of the suspicious lines are linked to the same enterprise, so the actual number of cases is lower • How many cases do we “usually” process Cut of from above, knowing that many suspicious lines are not errors

9. Where to make the cut… • All cases having at least one line with a score higher than 15 are handled by the case reviewers • 30 to 40 cases pr. month ~ 10 pct. of monthly reports • On top of the that: ~10 cases from procedure 3 • Ad hoc chosen levels: • Above 10.000.000 DKK OR • Above 2.500.000 and more than half of the trade • Roughly put: 50 pct. of the cases are hits.

10. Manage and editcases • All cases are stored in one system • Grouped by enterprise • Sorted by highest score across the reports • Different filtering options available • Automatically generated cases >< Manual cases • Suspicious lines >< New service codes • New reporters • Blocked or non-blocked cases • Case worker identity

11. Manage and edit cases

12. Manage and edit cases • Double clicking on a case brings up the overview of the enterprise • Errorsare marked with red • Yellow indicatescellsthatare changed • Purpleindicatesthat the reportsareblocked

13. Manage and edit cases • Edit data by double clicking on a cell • Enterprise and period • Data for given cell • Development over time • History for the given cell

14. Future plans • Simplify and enhance the filtering options in the overview of the cases • Add more automatic validation procedures • Merchanting • The geographical level (especially country codes 4A and 7Z) • Construction • Insurance

15. Validating trade in services • How is ITS data validated in your country?