It Pays to Check Spill-related Invoices

It Pays to Check Spill-related Invoices

Any spill requiring environmental cleanup is an expensive proposition. But spill generators often pay more than they need to by failing to closely examine invoices from cleanup contractors and emergency service providers, including fire departments, seeking reimbursement. Spill Center offers an invoice auditing service that provides expert review of charges from cleanup contractors, fire departments and others.

The Spill Center invoice auditing service seeks to ensure fair pricing by comparing invoiced charges vs. accepted standards and accuracy. Any inflated charges are negotiated down. The service is part of our comprehensive program for clients to help them control costs and limit liability arising from spills.

You may recall in a recent edition of Update I told you about a Spill Center bulk hauler client who saved more than $1,700 in spill-related charges after Spill Center audited an invoice from a cleanup contractor. Contacted by a Spill Center compliance associate, the contractor agreed to reduce the charges for several invoiced items and eliminate several others. That is not unusual in this business.

Reimbursing Fire Departments

We also find that fire departments and other taxpayer-funded emergency response agencies are becoming bolder in their demands for reimbursement from spill generators. But costs that these agencies seek to recover are sometimes reasonable, sometimes not. Empowered by local emergency service reimbursement ordinances, these agencies feel that they should be able to recoup all of their costs from spill generators, but many are operating in unfamiliar territory.

In our invoice auditing, we are seeing a broadening disparity in claims. For example, in the 400 fire department invoices we handled last year, we saw hourly charges for a pumper truck ranging from $20 to $500. Charges for other equipment and services also vary widely among fire departments. Sometimes the department is not even authorized to seek reimbursement from the spill generator.

Part of our service for our clients, which include private fleets, for-hire carriers, truck leasing companies and chemical and insurance companies, involves making requests for documentation from fire departments and other agencies which seek reimbursement. We request the department's fee schedule, copies of records showing time in and out, copies of bills for cleaning and equipment replacement - and a copy of the ordinance or law that authorizes the department to seek reimbursement.

Our role is to get the invoice to the point where it can be evaluated properly. Insurance premiums often are calculated on the amount of money paid out on behalf of the insured party, so it's in the best interest of the insured to determine the real costs and to make sure that they are driven by law.

The most common problem with emergency services invoices that we see involves incomplete documentation. A $1,200 charge for cleaning firefighters' turnout gear was included on one invoice, but the department was unable to produce a paid bill from a cleaning or decontamination service. To prevent overpayment, spill generators should always ask to see receipts to back up the invoice. For example, if an invoice includes a charge for 150 man hours, the fire department should be able to produce work logs showing time on and off or details of work performed.

Unreasonable Scope of Work

Spill Center staff, which includes paralegals and environmental and technical specialists, frequently see invoices seeking reimbursement for an "unreasonable scope of work." When half a dozen fire departments respond to a minor fuel spill and each one invoices the carrier for emergency services, that is beyond the reasonable scope of response.

Charges for damaged Level A suits in incidents that do not call for the use of Level A are also common. A Level A suit is also referred to as a vapor-protective suit or a suit that protects the
wearer from dangerous gases or vapors commonly encountered in hazardous material spills.

Unauthorized charges, such as line items that did not arise directly from the loss, often turn up on invoices. These include a labor charge with a pro-rated benefits cost or an administrative overhead charge, which might not be reimbursable under the ordinance.

Math errors on invoices constitute another common problem encountered during Spill Center audits. Never assume the math is correct. Many times the numbers just don't add up. That's why invoices should be checked carefully. And remember, any costs not directly associated with the loss can be used to negotiate down the invoice amount.

We hope you found this information useful. To learn more about Spill Center spill support and environmental claims management services, visit our website www.spillcenter.com. I also invite you to call me directly at 978-568-1922, X222 or e-mail me at tmoses@spillcenter.com.

Sincerely,

Tom Moses
President
Spill Center

22 Kane Industrial Drive
Hudson, Massachusetts 01749