TheVendor Master Filetopic in the APS Certification Program emphasizes fraud prevention through robust vendor validation processes. Key practices include confirming a vendor’s physical address, checking government sanction lists (e.g., OFAC), and requiring a W-9 to verify tax identification numbers (TINs). However,verifying that vendors are bonded(i.e., insured against financial loss) is not a standard requirement for vendor fraud prevention, as it is more relevant to specific industries (e.g., construction) and not universally applicable.
Option A (Confirmation of a physical address): Verifying a physical address ensures the vendor is a legitimate entity, reducing the risk of fraudulent shell companies. This is a key practice.
Option B (Verifying that vendors are bonded): Bonding is not a standard AP requirement for fraud prevention. It may apply to certain vendors (e.g., contractors), but it is not essential for all vendor fraud prevention programs. This is the correct answer.
Option C (Checking government sanction lists): Checking lists like OFAC (Office of Foreign Assets Control) ensures compliance with regulations and prevents payments to sanctioned entities, a critical fraud prevention step. This is a key practice.
Option D (Requiring a W-9): A W-9 provides the vendor’s TIN, enabling verification with the IRS to prevent fraudulent identities and ensure tax compliance. This is a key practice.
Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filelists “confirming physical addresses, checking sanction lists, and requiring W-9 forms” as essential for vendor fraud prevention. It notes that “bonding is not a universal requirement for vendor validation,though it may be relevant for specific contracts.” The training video emphasizes vendor verification processes, highlighting address checks, sanction list reviews, and W-9 requirements but not bonding.
