Ask the Auditor

As part of our Ask the Auditor programme, we recently spoke with Surinder, Head of Internal Audit for an East Midlands-based Unitary Council about how the authority reclaimed a cumulative £20,000 in duplicate payments with the built-in SmartAnalyzer FinApp of IDEA Data Analysis.

In November 2020, I decided that, in order to help my auditors make more frequent, efficient, and easier use of IDEA, we would upgrade to IDEA v11. One of the major benefits of the upgrade being the inclusion-as-standard of the SmartAnalyzer FinApp software, which provides predefined tests for a number of key financial systems. One of our first major exercises was a review of our invoice payment files for the current financial year.


We extracted the invoices payments file for the period of 1st April 2020 to 15th October 2020 from our General Ledger system and ran the predefined Account Payable tests on SmartAnalyzer which we found intuitively easy to use. In fact, I only scanned through the SmartAnalyzer guidance notes that were provided.


The built-in Duplicate Invoice Number test identified 52 records to manually review. These were all followed up and four payments, totalling just over £20,000, were confirmed as being duplicates. None of the payments were Covid related.


As part of our analysis, we discovered that in each case the suppliers had been set up twice on our system, with two different supplier accounts numbers. This resulted in the invoice validation check within the Accounts Payable system failing to detect the duplicate invoice. Upon investigation, we identified the likely cause of these errors.


Previously, in September 2019, the Council implemented Optimal Character Recognition (OCR) software which drastically reduced the number of errors occurring in invoice numbers entry and therefore we did not reasonably expect to find any duplicate payments. It appears the system created new accounts for some existing suppliers which allowed the duplicate invoices to be processed without automatically being detected and prevented.


Having identified the duplicate payments, their values, and to whom the payments had been made, we were able to expediently recall the full sum of duplicate payments and dam the revenue leakage. As of January 2021, the full £20,000+ had been recovered.


Going forward we will be running the IDEA/SmartAnalyzer software on a monthly basis as the software has more than proved its worth after a single first use and payback was immediate.

Surinder is a qualified Chartered Internal Auditor who has been working in internal audit for 20+ years. He possesses qualifications and experience in Computer Auditing and CAAT’s techniques, and has been a career auditor in Local Government. Starting off as Audit Assistant before moving into Senior Auditor & Principal Auditor roles, Surinder eventually climbed to the top of Audit ladder and has been the Chief Internal Auditor for the past 10 years.

Opinion Disclaimer

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the official policy or position of AuditWare Systems Ltd. Any content provided by our bloggers or authors are of their own opinion and are not intended to malign any organisation company, individual or anyone or anything else.

Leave a Reply

Your email address will not be published. Required fields are marked *