Client Recovery Audit
Summary - Edited Sample
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
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
Fiscal ..... invoice payments have been completely reviewed. .....
We utilized the following documentation and resources made available to us to
validate overpayments including:
|Chart of Accounts
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 shipments 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
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
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
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 departments inability to challenge
invoice prices. The accounting department would do an even
better job of monitoring invoices by ....
Accounts Payable Management
We uncovered one major duplicate payments of approximately $.....
covering three December ..... invoices. The first payment
supported by original invoices was made in .....
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 ....
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)