Vendor audits/contract compliance audit
Companies sometimes experience project or contract cost over runs that are difficult to explain. A comprehensive contract audit strategy can help you gain control of current problems and avoid concerns in the future.
Over the last few years, the complexity of contract language and relationships with vendors has increased. Managing the execution of contracts and subcontracts requires significant resources and experience to ensure an ongoing “win/win” balance with your suppliers.
There are two types of contract compliance audit that we can provide:
- Control Audit: Typically performed in the early phase of a contract with a vendor, it gives the client an understanding of the Vendor systems, controls and supporting documentation being generated to support costs billed to the Client.
- Recovery Audit: Audits executed toward the end of the contract may be considered “Recovery Audits”. The objectives of a recovery audit are to determine whether any Vendor charges are not valid, do not relate to the project, 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.