Recovery Auditing Cases
Case Study 1:
A large telecommunications company engaged a subcontractor to perform various installations of cable in and around new homes.
The contract allowed for a standard amount of hand-dug trenching per install, the remainder being machine-dug trenching. Any
install requiring more hand-dug trenching that standard required prior approval from the client, since the hand-dug trenching
was four times the cost per foot of the machine dug trenching. Since all of the labor sheets were manual and data was not
captured electronically, the labor sheets were reviewed manually and compared to signoff sheets. Over 680 instances of
unapproved charges for hand-dug trenching, in excess of the standard, was discovered. A total of $280,000 was recovered for
the client, and new procedures were implemented to prevent future overcharges.
Case Study 2:
A software manufacturer developed a promotional campaign where certain software was bundled with a special leather briefcase.
If a customer purchased the software during the promotional period, they received the briefcase at no additional cost. In
reviewing the documents for the purchase of the briefcases, it was found that sales and use tax was being charged on each
invoice. Since the briefcases were bundled with the software, they were not taxable. A total of $360,000 was recovered.