It is a combination of staff and automation.

The Property Management System (Opera, in this case) automatically sends multiple reports every night to IHG. One of these reports is a grouping of data that is processed by PC's network to process points.

However, the hotel itself is responsible to review this information in Holidex nightly for any discrepancies. The hotel can zero out points issued, but I have found that most limited service hotels do NOT review this regularly because they don't have the staff, so mistakes (usually in the customers favor) slip through. Unfortunately, it also means that if you have multiple rooms at a hotel, they can zero out your second room so that they don't have to pay for any points other than your primary room.

Hope this helps.