Our Contract Risk and Compliance Services provide our clients with valuable insight into their contractual arrangements, assurance that contract terms are being adhered to, and identification of opportunities to recover any inappropriate payments resulting from non-compliance. Our efforts and the information provided can be leveraged in subsequent contract negotiations; providing current and future benefits.
Our auditing procedures give our clients an understanding of the vendor systems, controls and supporting documentation being generated to support costs that are billed. An audit at this end of the spectrum could be labeled a "Control Audit" as you are trying to ascertain the quality of the Vendor controls and systems for the duration of the contract. Most audit issues and recommendations relate to improving communication, streamlining processes or avoiding future overspend.
Audits executed toward the end of the cumulative cost spectrum are usually considered “Recovery Audits”. The objectives of a recovery audit are to determine whether expenses paid to vendors are valid, relate to the project, or were duplicated and paid on a prior invoice or are overstated. It is important to execute this audit at a point where the client still has leverage to collect any negotiated overpayment amounts from the vendor. Future projects or contracts with the vendor also provide opportunities for process improvement as well as negotiating recovery of overpayments. Specific areas of review include, but are not limited to: invoice preparation, sales discounts & allowances, commissions, royalties, franchise fees, inventory shrinkage, returns, credits, and sales tax & VAT compliance.
Potential benefits from a successful contract audit include:
Improved income revenue/greater cost reduction
Significant return on investment
Compliance with contractual terms
Enhanced relationships with key business partners
More effective contractual self-reporting processes
Improved protection of intellectual property