Audit has many meanings

The annual premium that I pay for worker’s comp insurance is based in part on the total wages paid for the year. So at the end of the year, I have to complete an audit for the insurance company, which just requires filling out a few pages of forms and sending in copies of the wage statements that I filed with the government. It’s a minor hassle, like all paperwork, but it’s a rather less intimidating form of audit than most.

I understand the insurance company’s interest in verifying that the total I give them matches the total on a tax filing, and I try to similarly audit various bills that I receive. My monthly FedEx statements typically have a number of overcharges when I compare them to my own records (charges for pickups that never happened, charges for guaranteed-on-time packages that FedEx’s own records show were delivered several days late, residential delivery charges for packages delivered to university libraries, etc.). FedEx appears to see these overcharges as a useful revenue stream, whereas I, well, don’t. So each month I audit my FedEx statement and point out some of the errors to FedEx. And each month FedEx shrugs, issues a credit to me, and keeps their profits up by continuing to overcharge other customers. (Note: this is simply my perception and opinion of FedEx, and I am sure that FedEx would disagree.)

Some bills are essentially impossible to audit, such as my gas bill. I can verify that they took $500 out of my checking account last month, and I can verify that last month’s bill was for $500, but there’s very little about the bill itself that I can verify. What should the various fees and taxes and rates be? I have to trust them. Am I even using the amount of gas that they are charging me for? I know that energy audits on my house have shown that the electric bill is clearly wrong, but there’s been nothing I can do about it. Living without electricity would be challenging.

My merchant credit card account, which lets me accept credit cards for my business, used to be through a wonderful small bank in upstate New York. They had a simple and clear set of charges, and sent me a simple and clear monthly statement that was always correct. That worked for about 12 years, until they sold their merchant accounts to Nova. Now I have to remember to retrieve a much longer and incomprehensible monthly statement. The parts of the statement that are comprehensible frequently have errors, which doesn’t offer much hope that the incomprehensible parts are entirely accurate. Yesterday I called them because the monthly statement warned that MasterCard was going to start downgrading certain transactions that don’t show a “valid” non-zero sales tax amount. (Downgrading means charging a higher percentage of the total as a processing fee. As Vantage Card Services helpfully explains on a web page, “Traditionally, most merchants only paid attention to the qualified rate, so providers have buil[t] huge margins into their mid and non-qualified pricing.” A sentence that speaks volumes about one foundation of our economy.) I called looking for some further explanation, since almost none of my sales are taxable. The phone rep at Nova, after speaking with a supervisor twice, assured me that I should keep entering zero for the sales tax amount and that those transactions will not be downgraded. She told me that I should audit this on my monthly statement, which only presents one obstacle: there’s absolutely no information on the statement showing which transactions have been downgraded or why. Hmm. So I audited the only thing I could: her claim that those transactions will not be downgraded. And, of course, she was wrong. (I’ve learned that I need to ask Nova simple yes/no questions, because then I’ll discover the true answer: it’s almost always the opposite of what they tell me.)

The other audit I read about yesterday was an audit of our local public access television station. One of the questions for the audit was whether the public access television as being provided by the station reflected the diversity of our community. This seems like an important question. But the audit surprised me by changing the question: instead of asking who was putting programs on, who was watching the programs, and who was appearing in those programs, the auditor only looked at who was on the board of directors of the station. Not the metric I would have used, though the answer to all four questions is pretty much the same: old white guys. I’m not sure why that audit took a year to complete, but I’ll be curious to see if I can take the same approach to my worker’s comp audit next year: just change the questions.