R2006-137 AUTHORIZING AGREEMENT - Laserfiche WebLink

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� The Honorable Paul Osborne I � City of Decatur �, August 30, 2006 ' Page 9 ' etc.) which are beyond Segal's control. Our bi-weekly status reports will keep you informed on our project status. We will provide our draft repoR to Consociate Dansig approximately 10 to 15 days after the onsite audit for review and comment prior to presenting our final report (including a copy of their response) to the City. We believe this practice promotes a constructive process by all parties, allowing Consociate Dansig an opportunity to explain their position and identify corrective action that has or will be taken. The location and time for report presentation will be mutually determined upon completion (12 to 16 weeks from award of contract). Sampling Methodology and Audit Sample Size Sample size and methodology have a direct impact on costs. Therefore, it is imperative that we identify whether the audit objective is to confirm financial accuracy or obtain a general level of confidence in overall processing accuracy. In general, a larger sample size will give greater statistical validity to the results of the audit. If the goal of the audit is to obtain a sample of claims that are representative of all claims, then a larger sample size would be essential. In other words, if the City's goal is to have a high level of confidence regarding the overall financial impact of the audit and to have financial statistical validity, we would recommend a stratified selection of claims. However, if the primary goal of the audit is to focus on particular types of claims (for certain types of services or within certain plans) then we can select a targeted sample of claims. This process will examine only those claims that represent specific problem areas. A targeted selection of claims, however,does not offer statistical validity and is by design not representative of all claims. We recommend a stratified selection of claims from the most recent 12-month period (i.e., September 1, 2005 through August 31, 2006) that will yield a level of confidence in the overall financial impact of our audit findings. In addition, we will select 15 zero payment claims to ensure accuracy of deductible application and claim denial. Zero pay claims are classified in a separate stratum and factored into the statistical calculations for overall and procedural accuracy. Should the population of zero payment claims require more than 15 samples to maintain statistical confidence, these claims will be treated as a target sample and eliminated from the statistical calculations. The following table shows statistical confidence factors and fees for several options. We can prepare estimates for additional options at the City's request.