Policy Documents

An Act Relating to Recovery Audits for Government Overpayments of Tax Dollars: Model Language

American Legislative Exchange Council –
June 13, 2011

The Legislature finds that overpayments are a serious problem for state agencies giventhe magnitude and complexity of state operations. Overpayments waste tax dollars anddetract from the efficiency and effectiveness of state operations by diverting resourcesfrom their intended uses. An overpayment occurs when an individual, vendor or other entity receives a government payment in error or in excess of the legal amount entitled. Inorder to improve the economy and efficiency of government operations, the state shallcontract for recovery audits to recoup any overpayments made of state or federal taxdollars. The Legislature recognizes that recovery audits are a nationally recognized best practice for disbursements management and will provide insight for improvingoperational efficiency and internal controls in the state’s disbursement of tax dollars.Additionally, recovery audits will not cost the state any resources as the contractor’s costsare deducted from any dollars recovered, making the recovery audits self-funding.