1. (a) The department recovers improper payments when it is verified that contractors have been overpaid because of improper billing or accounting practices or failure to comply with the contract terms. The determination of impropriety is based on federal, state, and local laws and rules; department procedures; contract provisions; or statistical data on program use compiled from paid claims.
2. (b) The contractor is notified in writing of the types of discrepancies, the method of computing the reasonable dollar amount to be refunded, and any other actions the department may take.
3. (c) The contractor may request that the department conduct an audit of 100% of the records or conduct an additional audit of the records by sampling. The contractor may also request a presentation of the audit results at an appeal hearing with the department. When a contractor requests additional audit work, he must agree to pay the cost of performing the work at current department costs. The department absorbs the cost for additional audit work if the work reduces the exception by more than 15%.

Source Note:The provisions of this §732.303 adopted to be effective September 1, 1988, 13 TexReg 3993; duplicated effective September 1, 1992, as published in the Texas Register September 11, 1992, 17 TexReg 6279.