How the audit process works

On this page

The file audit process
Assessment rates
How to appeal

The file audit process

The LSC selects a sample of files for review representative work billed across the specific categories chosen for audit.

If more than one category is to be audited the number of files selected will be in the same proportion to the number of claims submitted in these categories.

The files are selected at random by computer. Firms have 14 calendar days to send the requested files to the relevant LSC regional office.

LSC auditors review each file against the requirements set out in:

the General Civil or Unified Contract (whichever is applicable)
Criminal Contract
the Specialist Quality Mark).

They will look for objective evidence to support all items claimed.

When the audit is complete files are returned to the provider. The firm will also receive a separate letter from the LSC confirming the results of the audit. Enclosed is a summary and detailed report of the specific audit findings.

Assessment rates

Overall results are based on the assessment rate:

Category 1: less than 10% reduction of claims made
Category 2: 10 - 20% reduction of claims made
Category 3: Over 20% reduction of claims made.

For category 2 and 3 outcomes the LSC will apply the initial audit findings with a percentage reduction across the firm’s other files. This is known as extrapolation. Generally there will be no extrapolation of costs assessments for Category 1 outcomes.

To minimise the cost of appeals the LSC will extrapolate at 5% below the assessment in all cases where there is no appeal.

This means a provider who is assessed at 24% overall on sampled files will have 19% recovered from its population of claims subject to audit. A provider's categorisation will continue to be determined by assessment results even where extrapolation will be at 5%.

Claims subject to extrapolation are those submitted after the date files were called for in connection with the previous audit, up to the date files were called for in connection with the current audit. This does not go back earlier than 12 months if there is a longer period between audits.

Providers in Category 3 will receive a contract notice on the first occasion during the life of the contract. This will be a formal warning that a second consecutive confirmed finding of Category 3 will result in contract termination.

The LSC will implement appropriate recoupment for Category 2 or 3 firms if no appeal is received after 28 days. This will mean a reduction in the claims to be reconciled against the contract payments.

How to appeal

Providers have the right of appeal against our assessment findings. They must appeal within the 28 day time limit or apply for a short extension before the first 21 days of the limit expire.

This includes the right to appeal on the grounds that the sample taken is not truly representative of the provider 's work over the relevant period, as well as the assessment of the individual audited files.

Specific evidence that the audited sample is not representative may lead to further files being audited.

Read more on the appeal process on the Appealing against the decision page.

>back to top

Last updated: 16 May 2007