Contract Management: Recovery Auditing Offers Potential to Identify Overpayments
NSIAD-99-12
Published: Dec 03, 1998. Publicly Released: Dec 03, 1998.
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Highlights
Pursuant to a legislative requirement, GAO reviewed the results of the Department of Defense's (DOD) demonstration program evaluating the feasibility of using private contractors to identify overpayments made to vendors, focusing on: (1) assessing the success of the methods used to identify overpayments; (2) determining the types of overpayments identified and the amounts recovered; and (3) identifying factors limiting the identification or recovery of overpayments and developing recommendations for improving the process.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should direct the Comptroller to focus future audit recovery efforts on the most recent purchases to maximize the likelihood that government and vendor documentation is available to support overpayment identification and recovery. |
The authorizing legislation initially limited the contracts to be reviewed to fiscal years 1993-1995. Now it covers all fiscal years after fiscal year 1993, and the focus of the demonstration program will be on more recent fiscal years.
|
| Department of Defense | The Secretary of Defense should direct the Comptroller to critically review PRGI's recommendations and implement those that are cost-effective. |
Many of PRGI's recommendations require major reprogramming to legacy computer systems and are not cost-effective at this time. However, appropriate changes have been incorporated into the new Defense Procurement Payment System.
|
| Department of Defense | The Secretary of Defense should direct the Comptroller to consider the extent to which it may be cost-effective to undertake moderate internal efforts to identify overpayments before turning audit recovery efforts over to an external group. One technique that DOD might find cost-effective is to periodically request status of accounts from its vendors. |
The position of the Defense Finance and Accounting Service is that it uses contractor support for post-audit due to lack of internal resources to perform the audits in-house. Thus, after considering the matter, further action is not intended. However, the Defense Finance and Accounting Service intends to take actions based on "lessons learned" from the contractor's findings to prevent overpayments in the future.
|
| Department of Defense | The Secretary of Defense should direct the Comptroller to establish a process for dealing with overpayments due other agencies. |
Procedures for notifying other agencies of identified over payments were issued on June 1, 1999.
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Topics
Collection proceduresContract oversightContractor paymentsDefense auditsDepartment of Defense contractorsInternal controlsOverpaymentsRefunds to governmentPayment systemsDefense budgets