Freddie Mac

Challenge:
Freddie Mac lacked transparency in their financial reporting owing to quality issues related to their data. Their current processes also lacked effective internal data quality controls. A lot of data quality checks existed as inefficient manual processes. It was determined they needed a viable data quality management process and framework that would deliver quality data efficiently and consistently.

Solution:
ProLink’s Data Quality Team delivered a multifold strategy to address Freddie Mac data quality issues:

• Adopting Control Framework: The Prolink team created a framework of General Controls and Application Controls, mapped to COSO framework required by the Sarbanes-Oxley legislation, to be adhered to in delivering data from Operations (Transactional systems) to Finance (Accounting Units and End Reporting). The general controls, which were designed to ensure that the financial information generated from the organization’s application systems can be relied upon, include the following types: Data center operation controls, System software controls, Access security controls, Application system development and maintenance controls. Application controls are designed to be embedded within software programs to prevent or detect unauthorized transactions and ensure completeness, accuracy, authorization and validity of processing transactions.

• Establishing Service Level Agreement: The Prolink team developed a Service Level Agreement that fostered the general controls, intended as a high level umbrella agreement between Finance and Operations to ensure that the quality of data delivered is reliable. By establishing such an agreement, the concept of customer and service provider (data delivery services) was introduced in the organization. Thus ensuring accountability for data quality.

• Defining a consistent repeatable Data Quality Attestation Process: Built a framework for data quality attestations required for all data elements that Finance identifies as having a material impact on Freddie Financial Statements and disclosures. The attestation process in itself consisted of mapping Operations data across Freddie Mac applications, defining data ownership, identifying and implementing controls to assess the quality of data used by Finance.

• Redefining Meta Data Repository to include Data Quality Aspects: Helped to re-design the infrastructure of Freddie’s Business Meta Data Repository so it could also house controls as an attribute related to the data deemed critical to financial reporting. This enhancement would ensure central maintenance and tracking of controls definitions.

• Instituting a Finance Data Quality Program Office for Finance: Provided strategic guidance on the establishment of a Data Quality Program Office for Finance. Instituting such a governance body ensured that the data quality management process put together in the steps above would be fostered and monitored on an on-going basis.

Result:
By delivering a data quality management strategy and framework that encompassed various aspects of data quality, the Prolink team laid a solid foundation for Freddie Mac to build upon towards achieving transparency and traceability in their financial statements. The program was built such that it would also promote compliance with data quality provisions of regulatory requirements, including support for the corporate effort to attest to the quality of data in the Freddie Mac financial statements. Finance as part of this process will be promoting good data quality practices, providing guidance in defining data quality controls that ensure accuracy and completeness and establishment of metrics to measure data quality.

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