Recovery Auditing

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• Recovery Auditing

May 13, 2009
Rod Wood, Director Sally Goetz, Supervisory
Auditor
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Overview

• VA approach to recovery audits
• Financial Services Center (FSC) recovery audit
  program
• FSC audit recovery portal demo

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VA Approach

• Aggressively pursuing recovery auditing
• Contract recovery audits
• FSC Audit Recovery Program
• Objectives
• Recovery of funds
• Enhanced internal controls

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Interest Penalty Improvements
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Financial Services Center

• Franchise Fund fee for service entity
• Supports VA and 10 other Federal customers
• Provides common financial services
• Commercial and medical claims payments
• Credit card payment processing
• Accounting services
• VA payroll processing
• Recovery audits

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FSC Audit Recovery

• Recovery Audit Program
• Hired commercial audit firm FY 2000
• Brought in-house FY 2001
• GAO best practice FY 2002
• Types of payment reviews
• Vendor credits
• Vendor/medical claims duplicate payments
• Employee awards
• Interest penalties and sales taxes

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FSC Audit Recovery (Contd.)

• Data mine high probability duplicates
• Validate/recover via collection or offset
• Payment cancellations
• Process managed via web application
• Recovery audit benchmark contract

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Audit Recovery Results
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Causes for FSC Collections

• Vendor credits
• Incomplete orders / returned goods
• Duplicate payments
• Consolidated / duplicate invoices
• Employee awards
• Duplicate inputs
• Interest penalties and sales tax
• Not authorized IAW Prompt Payment Act

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FSC Preventive Approaches

• Require original invoices for payment
• Research payment history before processing second
  payments
• Enforce contract provisions for exemptions from
  taxes claimed
• Provide staff training on root causes

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Enhancing Internal Controls

• FSC enhancements
• Transition from paper to e-invoicing
• OCR technology for invoice processing
• Centralizing VA medical claims payments

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Web Based Audit Recovery Portal DemoSally
Goetz
Audit Recovery
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Audit Recovery Portal
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Audit Recovery Portal (Contd.)
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Audit Recovery Portal (Contd.)
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Audit Recovery Portal (Contd.)
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Audit Recovery Portal (Contd.)
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Audit Recovery Portal (Contd.)
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Audit Recovery Portal (Contd.)
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Audit Recovery Portal (Contd.)
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Why the FSC

• Recognized by GAO as Best Practice
• Government employees vs. contractors
• Over 50 years of Federal experience
• More familiar with governmental operations
• Provide a variety of audit recovery services
• Use a secure web based application

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Why the FSC

• VA keys to recovery audits
• Centralized payment processing
• Leverage tools to perform/manage recovery audits
• Improve internal control posture
• FSC available for recovery audit
  consulting/recovery audit work
• FSC Director Rod Wood
• vafsc.director_at_va.gov

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Questions