1. 1 Recovery Auditing Department of Veterans Affairs Edward J. Murray VA Deputy Chief Financial Officer Deputy Assistant Secretary for Finance

2. 2 Overview VA approach to recovery audits Focus on Financial Services Center (FSC) recovery audit program Resulting improvements to internal controls

3. VA Approach Aggressively pursuing recovery auditing Contract recovery audits Health Administration Center In-house recovery audits VA Supply Fund Financial Services Center Objectives Recovery of funds Enhanced internal controls 3

4. Financial Services Center (FSC) Franchise Fund “fee for service” entity Supports VA and 10 other Federal customers Provides common financial services Commercial and medical claims payments Credit card payment processing Accounting services VA payroll processing Recovery audits 4

5. 5 Recovery Audit Program Hired commercial audit firm FY 2000 Brought in-house FY 2001 GAO “best practice” FY 2002 Types of payment reviews Vendor credits Vendor/medical claims duplicate payments Employee awards Interest penalties and sales taxes FSC Audit Recovery

6. FSC Audit Recovery (Cont’d.) Leverage centralized payments Data mine high probability duplicates Validate and recover via collection/offset Process managed via web application On line field station validation Automated bills of collection Recovery audit “benchmark” contract Three years of payment data ($15+B) 2 ½ years work: $82K in new collections Discontinued contract and incorporated lessons learned 6

7. FSC Recovery Audit Results 7

8. VA Focus on Internal Controls FSC enhancements Transition from paper to e-invoicing OCR technology for invoice processing Centralizing VA medical claims payments 8

9. Summary VA keys to recovery audits Centralized payment processing Leverage tools to perform/manage recovery audits Improve internal control posture FSC available for recovery audit consulting/recovery audit work FSC Director: Rod Wood, Rodney.Wood@va.gov Rodney.Wood@va.gov 9

10. Questions?? 10