Purpose

The objective of our examination was to determine whether payments made by the State University of New York Downstate Medical Center (Downstate) to Collecto, Inc. (Collecto) under contract TQ00030 were appropriate and properly supported.

Background

Downstate contracts with Collecto for debt collection services.Under the $2.5 million contract, Downstate pays Collecto various commission rates based on the amount collected by account type and size.

Key Findings

Of the $29,288 we examined, we found overpayments of $14,355 and additional potential overpayments of $2,664. The remaining $12,269 was appropriate and properly supported.

The $14,355 in overpayments represented services previously billed on prior invoices. The $2,664 in potential overpayments represented charges where the contract did not include clear language to determine the proper commission for small-balance accounts.

SUNY officials are implementing desk procedures to ensure staff do not approve vouchers with duplicate billings. In addition, SUNY Downstate is working with their Counsel’s Office and Collecto to review and amend the contract as necessary to eliminate the unclear terms.

Key Recommendations

• Continue to ensure staff do not approve vouchers with duplicate billings for amounts already billed on prior invoices.
• Continue to work with counsel’s office to clarify ambiguous contract terms and amend the contract accordingly.
• Ensure future payments comply with the clarified/amended contract terms.