Audit… audit…AUDITS!!!!

         The reason an audit is ordered varies with each institution. A lender can request an audit of a business account to show financial solubility before the business owner assumes the further debt.  When my daughter and I joined forces to purchase real estate, her lender requested that my business had an audit conducted so I can document all my assets, expenses, and reserves to show that the health of my business was not going to be affected by the purchase of the property.

Mortgage companies conduct an audit on 20-25% of the mortgages that are settled every month. The mortgages to be audited are randomly selected.  Most of the time the audit is done within the first two months after settlement, but the audit can be done as late as 12 months. The reason for the audit can be one of a million reasons.  When my daughter and I bought our latest townhouse, our file was flagged for an audit!  In our case, the mortgagor needed to verify I was indeed a realtor licensed in Maryland.  The audit was requested within the two months of us going to settlement.  My employer was contacted in WRITING requesting verification of employment.  A form was filled out confirming my Maryland license, and off it went.

Utility companies as well as other energy conservation companies conduct an audit; local and state government or private citizens may request the audit. The results of the audit will show the efficiency of your systems such as the HVAC, furnace, roof, window seals, frames, ductwork, insulation, etc. The more efficient the systems are, the more money you save.  The benefits of an energy audit far outweigh the cost of having one; the cost of utility audits may be around $250 while audits for tax purposes can be quite costly. Talk to your local utility company for an electricity, gas, or water audit; they may conduct the audit themselves or have recommendations for private service providers.  In the Virginia area, Comfenergy provides utility services. Dominion Power can conduct an audit for you in Virginia as well.

Water audits are usually conducted when a leak is suspected.  About 10 years ago, my mother’s water bill came in at $1500 for a 30-day period.  Needless to say, she was shocked.  The water company came out practically immediately after she contacted them, and an audit was conducted.  The water company had several devices/ tools and chemicals to evaluate the plumbing.  One device measured the water pressure while another looked for air bubbles.  A harmless dye like food coloring was also placed in certain parts of the plumbing to test where the leak was located.   The kids’ favorite test was the flashlight test.  The technician went around the entire perimeter of the house, and then under the house with a heavy-duty, black flashlight shining it against the entire plumbing fixtures.  After three hours of testing the air pressure, looking for bubbles, and confirming there was indeed a leak, the technician and his magical, super slick black flashlight found the source of the leak.  Initially, all you saw was a tiny line on a portion of the pipe, but underneath it was anything but tiny.  The crack was almost a foot long, and the pipe was about three feet underground.  My mom had not seen the water pooling around the house because the pipe was on a slope away from the house.    The technician thought the pipe was an original pipe from 1945!

Many counties conduct water audits around the country on a periodic schedule to preserve our precious assets, especially during times of drought.  The EPA gives counties guidance on how to conduct water audits and how to preserve water.

Gas companies such as Washington Gas will conduct an audit to check for dangerous gas leaks as well as to show you how inefficient equipment is costing you money. Gas leaks are probably the fastest leaks to be noticed given the notorious smell of gas.