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Contract Management: Recovery Auditing Offers Potential to Identify Overpayments

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Report Type Reports and Testimonies
Report Date Dec. 3, 1998
Report No. NSIAD-99-12
Subject
Summary:

Recent legislation requires the Defense Department (DOD) to conduct a demonstration program to evaluate the feasibility of using private contractors to identify overpayments DOD has made to vendors. GAO reviewed the program and found that the contractor has identified overpayments of $19.1 million and is working to identify additional overpayments. This magnitude of overpayments would likely not have been identified by the Defense Finance and Accounting Service without the demonstration program. However, government efforts to collect these overpayments have been slow--only about $1.9 million has been recovered--largely because the recovery process stopped for eight months while the Defense Supply Center in Philadelphia reviewed vendors' complaints. Although the Defense Supply Center has concluded that the government's claims are valid, it has yet to issue letters notifying vendors of the final decision about the amounts owed.

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