|
Here
are examples from industry publications, CRW archives, and AMG
archives
|
Recoveries |
|
Savings |
Defined as immediate
monetary resolutions of audit issues by means of a cash
refund, discount, credit memo, offset against a concurrent
calim from the other party, or receipt of materials or
services as compensation.
Appear in
Green in the examples
table
|
|
Defined as immediate
monetary resolutuions of issues plus quantifiable, monetary
savings arising from satisfactory resolution of the issue.
Long term savings are generally reduced to net present value.
Appear in
Blue in the examples
table
|
| |
|
|
|
Potential Savings |
|
Losses |
Issues for which savings
likely occurred, or will occur, for which the ultimate
resolution is undetermined or unsettled.
Appear in
Black in
the examples table
|
|
Issues for which avoidable
losses were incurred.
Appear in
Red in the examples
table
|
| |
|
|
 |
CONSTRUCTION MATERIALS SAVINGS |
 |
Issue
|
Finding
|
Result
|
|
The project encountered unsuitable
soils and decided to use fly ash to stabilize the soil. A local
source was chosen and hundreds of tons of material were
delivered to the site. |
The auditing consultant found a
construction industry publication that included an article on
the hazards of using calcified fly ash produced in certain power
boilers. The client was notified and payment for the materials
was halted.
|
Upon being requested to provide credit
for the undesirable material, the vendor credited the entire
outstanding balance.
$75,000
Recovery
Source: Cost Recovery Works
Archives, 1999 |
|
The site grading subcontractor was
awarded a separate subcontract for roads and paving. |
The consulting auditor reviewed the
respective scopes of the subcontracts and found that the supply
of graded aggregate, base course was duplicated. |
The subcontractor agreed to a
corrective subcontract price adjustment and progress payments
were adjusted.
$187,600
Recovery
Source: Cost Recovery Works
Archives, 1999 |
|
The project management firm had
negotiated a blanket purchase order for wire and cable with
reduced pricing based upon the purchased volumes from multiple
sites. |
Review by the auditing consultant
indicated that the pricing of releases under the blanket order
exceeded the terms of the agreement. |
The issue was turned over to
Purchasing Management for resolution.
$150,000 to
$240,000 at issue
Source: Cost Recovery Works
Archives, 1999 |
|
Modern process control valves are
frequently purchased under blanket purchase orders with supply
houses. Pricing is comprised of multiple components which depend
on valve specifications, with discounts applied to each
component. Accurate pricing may be difficult to achieve.
|
Recognizing that purchasing personnel
lacked the time to audit the pricing of the valves, the project
auditor conducted a review.
The project auditor selected a sample
of valve purchases from the 5 designated project suppliers. The
pricing was tested for accuracy. The findings were that 2 of the
suppliers had overcharged due to the omission of one or more
discount factors.
|
The suppliers refunded more than
$33,000. Savings to the project and to manufacturing
operations from correction of the suppliers' billing systems
exceeded $200,000.
$33,000
Recovery
$200,000+
Savings
Source:
AMG
Archives |
|
