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Client Recovery Audit Summary - Edited Sample

Cover Letter

Mr. Nicholas S. Vojnovic, Treasury Manager
......
Atlanta, GA 30703

Dear Mr. Vojnovic:

The Recovery Audit of your fiscal _____, _____ & _____  has been completed. We examined a total of 2.3 billion transactions for the 3 years; those transactions added to total Accounts Payable dollars in excess of $5.3 billion.

Our staff identified, documented and verified overpayments of $2,279,774.25.  These findings confirm an A/P Dollar Accuracy Rate of 99.96%, and with only 690 overpayments found in 2.3 billion vendor payments, the A/P Transaction Accuracy rate is 99.99%.  Overpayment recovery from your vendors is progressing as expected, and the outlook for complete recovery is excellent.

The cooperation and ongoing support of the Accounts Payable staff, Purchasing Group and management are sincerely appreciated.  We particularly want to thank your Controller, ..... support staff, ....., Assistant Controller and ....., A/P Manager, for their input, assistance and follow through during the review.  All three are ...... 

Overall, the procedures and controls in place for both purchasing and payables, as viewed by our Audit Team, are good.  Although the number of claims (690) and total dollars as a percent of total payables is minimal, recoveries in excess of $2.2 Million verify the value of the effort.

The attached Recovery Audit Summary and Overpayment Analysis details each overpayment we verified, for your review.  We will continue .....

Recovery Audit Team Notes, Observations, Suggestions and Comments

Team Notes

Fiscal ..... invoice payments have been completely reviewed.  .....

We utilized the following documentation and resources made available to us to validate overpayments including: 

AP Files Contracts Receiving Reports
Chart of Accounts Purchasing/Payables Data Statements
Check Register Purchasing Files Vendor History

Each payment package included a copy of check, invoice and receiver.  Purchase orders were part of the paid invoice documentation except in cases of multiple deliveries / invoices where the hard copy of the purchase order was attached to the last shipment’s invoice.  Purchase orders were issued .....



Summary of Audit - Overpayment Discovery

Debit Memos totaling about $2,324,930 were drafted and submitted for your review and approval. Of this total, $..... composed of $..... from duplicate payments, $..... from pricing discrepancies, ..... and $..... from miscellaneous types of overpayments were approved and debit memos were issued to various vendors.

For the three-year period reviewed, we found and drafted debit memos for Sales and Use tax overpayments totaling approximately $..... These proposed debit memos were routed to Purchasing for ....


Purchase Order Management

Observation

Certain vendors grant trade discounts to ..... Company based on volume purchased or on part type, usually subject to prompt payment of the invoice. In some cases, these discounts are not ....

Suggestion

Agreements on pricing terms with suppliers should be in writing to reduce or eliminate pricing disputes and to prevent possible loss of discount through AP department’s inability to challenge invoice prices. The accounting department would do an even better job of monitoring invoices by ....



Accounts Payable Management

Observation

We uncovered one major duplicate payments of approximately $..... covering three December ..... invoices. The first payment supported by original invoices was made in .....

Suggestion

Expand the Accounts Payable program menu options to include a Vendor History report using the existing data in your A/P database. Payment data should be sorted by payment date within vendor. It should be accumulated and reported in alphabetic or vendor number order, for a ....



General Comments

Both Purchasing and Accounts Payable should have access and review contracts to ensure ABC Company receives all the cost benefits it is entitled to. An example is freight terms. Some contracts state that if the purchase orders are in excess of ....

Use Tax Overpayment Recoveries

We have provided overpayment verification documentation regarding all overpayments including taxes. We recommend retaining all overpayment documentation records regarding Use Tax for ....

Sample of Overpayment Summary - Detail Reports



CERTIFIED TO DO RECOVERY AUDITS (SIN 520-9) FOR THE U.S. GOVERNMENT (GSA)

 
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