Cost recovery programs have substantial implications that directly impact the financial health of organizations. At Poole Audit, our attention extends beyond mere compliance; we strive to identify and optimize revenue streams that may otherwise remain obscured. This is achieved in part by our cost recovery programs that we have developed from decades of experience.
Our process involves an in-depth analysis of our client’s agreements with all parties involved in the billing processes. There are often clauses in the agreements that point to the best way to bill operator-owned equipment to partners, and these can often be misunderstood. Our goal is to find solutions for our clients that are cost effective. For example, companies often rent equipment (such as forklifts), or they pay a per barrel rate or by volume in someone else’s facility for saltwater disposal or other pipeline services. Through our analysis, we often find that it would be more financially beneficial to purchase the equipment or build the needed facility and then charge it to the wells based on the prevailing market rate rather than continuing to rent or pay other parties for the needed services.
When it comes to labor charges, there are often varied billing practices based on location of work, level of position, and work being performed. For example, a common clause in some agreements states that above first level supervisors are not billable. We frequently run across this issue during our audits and have developed plans to determine the chargeability of different positions. This plan often involves requesting and analyzing organizational charts from the entity, then meticulously reviewing each time sheet and bill to verify that the labor being charged is legitimate and allowable based on the specific agreement. If above first level supervision is being charged to our client, we compile the total cost of this overcharge, and include it in our final audit reports sent to the client and operator.
Operator-owned equipment and labor allocations are common, yet complex, components that if mismanaged, can lead to substantial financial losses. Our role is to meticulously analyze these aspects, ensuring accurate billing and, ultimately, revenue maximization for our clients. We have encountered all types of clauses and intricacies within agreements and can identify how to bill costs that our clients may have never dealt with before.
By employing a structured approach developed from decades of experience in the auditing industry and leveraging our expertise, we assist clients in uncovering overlooked revenue opportunities. Through meticulous examination of agreements, we interpret nuanced clauses, find misbilled costs, and facilitate new processes to help prevent under billing.