Our team conducted an internal audit of a government corporation specializing in leasing commercial properties to businesses. During our examination, we scrutinized the payment schedule, which had been previously endorsed by senior officials, as the foundation of our audit to assess the timeliness of payments. Initially, everything appeared to be in order, potentially explaining the absence of qualifications in previous years’ internal audit reports.
However, as part of our standard procedures, we meticulously verified the mathematical accuracy of the schedule, irrespective of its endorsement by senior government officials. In the course of our examination, we uncovered discrepancies in the calculation of interest amounts, resulting in erroneous billing to clients over several years. Upon calculating the overcharged amount, we discovered it totaled INR 12 crores ($120 million).
We promptly brought this issue to the attention of senior management, advocating for rectification of the schedule. Subsequently, the department issued apology letters to the affected lenders and committed to adjusting the excess amount in future payments.
This experience underscores the importance of not solely relying on previous audit work, even if conducted by our own team. Each year presents new discoveries, as the passage of time between audits adds to the auditor’s experience and insights.