• BEACON
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• North Carolina Accounting System
• Overpayments and Recovery Audit
• PCI Data Security
• State Cash Management Plan
• State Disbursing
• Statewide Accounts Receivable
• Statewide Central Service Cost Allocation
• Training

Overpayment and Recovery Audit Procedures

To ensure claims are processed timely and efficiently, the following procedures are in effect for the Overpayments and Recovery Audit:

1. The contracted auditor will send statement letters on OSC letterhead requesting current accounts receivable statements for state vendors.
    
2. Once a claim has been identified, the auditor will contact the vendor and document the contact information for confirmation and audit trail. The auditor will make any additional information available to the vendor. The agency will be contacted by the auditor to review open credits found during the audit and insure that no activity has taken place within the last 180 days from the payment date or credit memo date. If no activity has occurred the agency must show substantial proof (i.e., dated correspondence to the vendor on the item(s) in question) that there was a diligent effort put forth to work with the vendor in closing the credit. This correspondence must be in the form of an email, facsimile, or letter. If no correspondence is made, the agency is required to process the claims collection by entering a debit or credit memorandum or by authorizing the request for a refund. It is the auditor’s responsibility to contact the vendor if a refund is applicable.
    
3. Before any monies are received, the agency and the vendor are required to give written authorization (e.g., fax, email) to OSC via the auditor regarding the credit. The agency will then complete step 4 below. If a vendor sends a refund check directly to OSC, the check must be made payable to the State of North Carolina-Office of the State Controller. These funds will be deposited in the OSC Recovery Fund as required by the legislation for this audit.

4. The agency is required to enter the credit/debit memorandum into its Accounts Payable system within five (5) working days of receipt. This credit is to be recorded to the 211270 A/P Recovery Clearing account. Once the credit has been processed, the agency will transfer monies, using the North Carolina Accounting System (NCAS) vendor named OSC-CENTRAL ACCTS (CMCS 4174) number 561611588-07, from the liability account to the OSC Recovery Fund.
    
5. The OSC is responsible for following up with agencies that are not processing claims in a timely manner or utilizing their best possible management practices.
    
6. When claims that are presented to the agency are supported by federal funds, the agency is required to inform the auditor of the federal participation rate.  The auditor should then notify OSC.  In order to ensure proper accountability of these type claims, the entire recovery will be deposited in the OSC Recovery Fund. OSC will submit the contracted percentage of the claim amount to the auditor and transfer the remaining federal portions of the claims back to the agency to distribute to the grantor agency.
    
7. The OSC is excluding from the audit, purchases of medical services and/or payments, invoices or payments already in dispute, payments made under the purview of the Department of Correction’s Cadence Utility Accounting Program, and universities’ institutional trust funds. These trust funds are not subject to the recovery of overpayments audit established by the current statute due to the restrictive nature of these funds.

Questions regarding this audit should be directed to OSC Support Services at (919) 707-0795.