About the Author xiii
Foreword xv
Preface xvii
Acknowledgments xxi
How to Use This Book xxiii
CHAPTER 1 Benefits of Recovery Services 1
U.S. General Accounting Office Report Recommends Recovery Auditing 1
Top Benefits of Cost Recovery 2
Top Reasons for Recovery 4
Recovery Estimates-Embrace the Uncertainty 5
When Recovery Becomes Fraud 6
Sarbanes-Oxley Implications 9
CHAPTER 2 Overcoming Obstacles to Getting Recovery Started 15
Overcoming Obstacles to a No Brainer Service 15
Why Internal Audit Department Are Sometimes the Worst Resource for Doing Recovery Audits 19
Why Internal Audit Departments Are Truly the Best Resource for Doing Recovery Audits 20
Why Select a Provider for Your First Audit 23
CHAPTER 3 Assessing Opportunities and Risk 25
Focusing on the Largest Fish 25
Scattergraphing: A Powerful Tool to Identify Changes in Company Activity 27
Going Deeper and Data Auditing Vendor Accounts 30
Using Vendor Toolsets 33
The Top 10 Questions to Ask When Deciding to Do a Recovery Audit 33
CHAPTER 4 The Overall Cost Recovery Marketplace 36
How the Industry Worked in the Past 36
Recovery Consulting Today 37
The Evolving and Continuous Recovery Process at Companies 38
Why Recovery Consulting Is so Popular 39
Dimensions of Recovery 41
Recovery Categories 44
How the Recovery Areas Are Defined in This Book 47
CHAPTER 5 Accounts Payable and Procurement 49
Case Study 5.1: American Auto Runs a Tight Ship 49
Case Study 5.2: Public Utility with Staffing Problems 51
Case Study 5.3: Contract Compliance with Pinpoint Profit Recovery Services, Inc. 53
Case Study 5.4: International Personal Goods Manufacturer with Retail Outlets 54
Case Study Wrap-Up 56
Recoveries to Find 58
Questions to Ask When Assessing the Opportunity 59
Conclusion 62
CHAPTER 6 Advertising Agency Audits and Media Reviews 63
Overview 63
Case Study 6.1: Reluctant Marketing Department Hiding Its Intentional Agency Benefit 63
Case Study 6.2: Exit Audit after an Agency Transition 64
Case Study 6.3: Media Management 65
Case Study 6.4: Global Software Company 66
Case Study Wrap-Up 67
Recoveries to Find 71
Prioritizing the Opportunity 73
Conclusion 74
CHAPTER 7 Audit Firm Benchmarking 76
Overview 76
Case Study 7.1: An Auditor in Trouble? 77
Case Study 7.2: Utility Service Firm Paying too Much 81
Case Study Wrap-Up 84
Recoveries to Find 87
Questions to Ask 87
Conclusion 87
CHAPTER 8 Escheatment (Unclaimed Property) 88
Overview 88
Case Study 8.1: Accounts Receivable Overcrediting 92
Case Study 8.2: Pinpoint Profit Recovery Assists Large Services Corporation 93
Case Study Wrap-Up and Recoveries to Find 96
Questions to Ask When Assessing the Opportunity 99
Conclusion 100
CHAPTER 9 Freight Bill Auditing 101
Overview 101
Case Study 9.1: When Freight Classes and Descriptions Make a Difference 102
Case Study 9.2: Aluminum Manufacturer and Distributor Post-Audit 102
Case Study Wrap-Up 102
Recoveries to Find 107
Questions to Ask 108
Conclusion 108
CHAPTER 10 Health Benefits Auditing 109
Overview 109
Case Study 10.1: Midwest Municipality Cuts Costs 111
Case Study 10.2: Employer Takes Control 114
Case Study 10.3: Holding Company Uses Comparison to Advantage 116
Case Study Wrap-Up 117
Recoveries to Find 121
Questions to Ask 122
Conclusion 123
CHAPTER 11 Lease Audits 124
Overview 124
Case Study 11.1: The Portfolio Assessment of a National Consulting Firm 125
Case Study 11.2: Variety of Issues at a National Banking Corporation 126
Case Study 11.3: Park Avenue, New York City, with Inappropriate Cleaning and Utility Costs 127
Case Study 11.4: Multinational Corporation Audits One Lease for Big Savings 129
Case Study Wrap-Up 130
Recoveries to Find 133
Questions to Ask When Assessing the Opportunity 134
Conclusion 135
CHAPTER 12 Order to Cash Reviews 136
Overview 136
Case Study 12.1: Construction Materials Not Reporting All Cement Loads or Pricing Them Properly 136
Case Study 12.2: Too Many (Fraudulent) Fourth-Quarter Sales 138
Case Study Wrap-Up 139
Recoveries to Find 141
Questions to Ask When Assessing the Opportunity 143
Conclusion 148
CHAPTER 13 Payroll Tax Credits 150
Overview and Recoveries: Savings to Find 150
Other Federal Programs 153
State and Local Incentives and Credits 154
Questions to Ask When Assessing the Opportunity 154
Conclusion 155
CHAPTER 14 Proactive Fraud Audits 156
Overview 156
Case Study 14.1: Association of Certified Fraud Examiners Report to the Nation 158
Case Study Wrap-Up 159
Recoveries to Find 174
Questions to Ask When Assessing the Opportunity 175
Conclusion 175
CHAPTER 15 Project Fraud Audits 177
Overview 177
Case Study 15.1: California State Welfare Automation Project 178
Case Study Wrap-Up 180
Recoveries to Find 183
Questions to Ask to Assess the Opportunity 184
Conclusion 186
CHAPTER 16 Real Estate Cost Segregation 187
Overview 187
Case Study 16.1: Franchise Restaurant 188
Case Study 16.2: Apartment Complex 189
Case Study 16.3: Assisted Living 191
Case Study 16.4: Two-Story Medical Office Facility 192
Case Study Wrap-Up 193
Recoveries to Find 194
Questions to Ask When Assessing the Opportunity 195
Conclusion 199
CHAPTER 17 Research and Development Tax Credits 200
Background 200
Case Study 17.1: Engine Service Firm R&D Credits 201
Case Study Wrap-Up 203
Questions to Ask When Assessing the Opportunity 208
Conclusion 208
CHAPTER 18 Strategic Sourcing 210
Overview 210
Case Study 18.1: $1.6 Million in Annual Savings for Food Distribution Company 211
Case Study 18.2: Private College Saves More than $200,000 212
Case Study 18.3: Multi-Project Strategic Sourcing 212
Case Study Wrap-Up 214
Recoveries to Find 219
Questions to Ask When Assessing the Opportunity 221
Conclusion 221
CHAPTER 19 Telecommunications Auditing 223
Overview 223
Case Study 19.1: Refund of Local Service Charges at a Transportation Company 224
Case Study 19.2: Future Savings of Local Service Charges at a Multi-Location Retail Chain 224
Case Study 19.3: California School District 225
Case Study 19.4: Future Savings of Wireless Charges at a Media Company 225
Case Study Wrap-Up 226
Recoveries to Find 227
Questions to Ask 230
Conclusion 230
CHAPTER 20 Travel and Entertainment Reviews 231
Overview 231
Case Studies 20.1: How to Make $20,000 in One Year, Tax-Free: Specific Schemes 232
Case Study Wrap-Up 233
Automation Benefits 236
Recoveries to Find 237
Questions to Ask When Assessing the Opportunity 238
Conclusion 239
CHAPTER 21 Utility Reviews 240
Overview 240
Case Study 21.1: Fortune 1,000 Manufacturer Cuts Its Utility Costs in Several Ways 241
Case Study 21.2: Hospital Water Cost Leak Plugged 242
Case Study 21.3: Small Town Manufacturer-Electric Refund 244
Case Study 21.4: Entertainment Company with Multiple Locations Chooses Deregulation for Select Sites 245
Case Study Wrap-Up 246
Recoveries to Find 247
Questions to Ask When Assessing the Opportunity 248
Conclusion 249
CHAPTER 22 Selecting a Provider 250
Overview 250
Applying Discipline . . . It's a Good Thing 250
Step 1: Form the Team 251
Step 2: Set Requirements and Success Metrics 252
Step 3: Draft a Request for Proposals 253
Step 4: Negotiate 257
Step 5: Complete Decision Analysis 260
Conclusion 262
CHAPTER 23 Technology Used in Recovery Efforts 263
Introduction 263
Data Analysis/Mining/External Data 265
Assessing Vendors against Watch Lists 282
Making the Scattergraph 286
Continuous Monitoring 288
Pre-Formatted Workpapers/Process Workflow/Client Management Dashboards 293
Conclusion 295
CHAPTER 24 Conclusion 298
Where Do We Go from Here? 298
What Else Can You Do? 298
APPENDIX 1 Additional Publications Related to Business Cost Savings 301
APPENDIX 2 Accounts Payable 304
Risk Assessment Questions by Profit Leak 304
APPENDIX 3 Records Retention and Right to Audit 312
APPENDIX 4 Discussion Paper Continuous Controls Monitoring with ACL AuditExchange 2009 and Scripted
Analytics 314
Purchasing Payables and Payments 315
ACL AuditExchange 2009 316
Purchase-to-Payment Cycle: Critical Processes and Activities 316
ACL Analytics Technology 317
Customer Successes 319
Client Benefits 319
APPENDIX 5 Tapping the Strategic Potential of Procurement 322
Challenges 324
Key Success Factors 326
Fulfilling Potential 330
Index 331
