Objectives
The objectives of a cash recovery effort should include the following:
- Recovery of overpayments whose value well exceeds the effort involved to recover it
- Identification of control weaknesses, in order that future corrective/preventive actions may be implemented
- Longer term solutions designed to reduce the probability of overpayments recurring in the future
Data Integrity
Duplicate items in a database or other repository of information can reduce the efficiency and effectiveness of the system. For example, a vendor with multiple assigned vendor numbers, if done unintentionally, significantly increases the risk of payment processing errors.
Assessing Effectiveness of Controls
A thorough test for duplicate payments or duplicate accounts, if properly conducted, can either identify opportunities for cash recovery or confirm that the existing system of internal controls is functioning effectively.