Contract Management: DOD Could Benefit From the Use of Internal Recovery Auditing
Abstract
The Fiscal Year 1996 National Defense Authorization Act required the Secretary of Defense to conduct a demonstration program to evaluate the feasibility of using private contractors to identify overpayments the Department of Defense (DOD) has made to vendors. The program began in September 1996, when the Defense Supply Center, Philadelphia, competitively contracted with Profit Recovery Group International (PRGI). Section 388 of the Fiscal Year 1998 National Defense Authorization Act authorized continuation and expansion of the program. In December 1998, we reported that the concept of "recovery auditing" offers potential to identify and recover overpayments through both internal DOD and external contractor efforts and recommended that DOD look into the cost effectiveness of making moderate internal efforts to recover overpayments before awarding contracts for such efforts. Although DOD concurred with our recommendation, officials from the Defense Finance and Accounting Service recently stated that they did not have the resources to do internal audits and planned no action to implement our recommendation. One of PRGI's steps in identifying overpayments government. This technique led to the recovery of $957,000 from one vendor. In addition, vendors identified another $1.75 million in overpayments that were outside the scope of the PRGI contract, either because they were not within the contractual review period or were related to another government agency.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 10, 2000
- Accession Number
- AD1167238
Entities
People
- David E. Cooper
Organizations
- United States Government Accountability Office