Why was the Post-Payment Audit Process implemented?

An initial analysis in FY 1998-99 of payment vouchers showed that over 80 percent of purchase orders and service payment requests were less than the capitalization threshold of $1,000. However, documents under $1,000 comprised only 10 percent of total dollars spent.

This was reiterated in FY 06-07 when another analysis of payment vouchers showed that approximately 75 percent of purchase orders and service payment requests are less than the capitalized threshold of $1,000. These same documents under $1,000 comprise approximately 4 percent of total dollars spent.

Implementing a post-payment audit process reduces costs, improves operational efficiencies, and enhances the payment control environment. The primary benefits include:

• Enhanced compliance with the Prompt Payment Act due to more timely payment processing
• Increased control of supporting documentation due to fewer people handling invoices, receipts, etc.
• Reduced costs to the University due to fewer resources required for pre-auditing
• Better relations among academic, research, and administrative departments due to fewer delays in payment processing