Audit and Compliance Unit (ACU) audit process
Types of audits conducted by ACU
ACU is mandated to complete random account audits to determine the overall error rate in lawyer billings. The error rate, common types of errors made and the dollar value of those errors are used to determine if changes to policies or processes are needed.
To support the random selection process, we use recognized random selection techniques when selecting accounts for audit. All lawyer accounts have the same chance of being selected, and the same lawyer may be selected more than once a year.
A target audit typically includes more than one certificate—normally up to 12 or more. Target audits can be conducted more than once a year depending on the volume or significance of billing errors.
A target audit may be initiated for several reasons or risks:
- A random audit has identified billing issues that support expanded scrutiny of accounts paid to a lawyer, or where the nature or extent of errors suggest that there is merit to conducting a review of other accounts submitted by the lawyer;
- ACU systems have identified that several certificates for a lawyer have been flagged for potential billing errors;
- A high incidence of billing errors in the past;
- ACU has received a referral from one or a combination of the following:
- Complaints Department
- Investigations Department
- Director general
- Lawyer Services and Payments
ACU may access the Integrated Court Offences Network (ICON), a tool used to identify potential billing errors, while acknowledging that ICON is not infallible. In situations where ICON does not support lawyer billings, we may request court information or other documents to validate these.
ACU may also access Immigration and Refugee Board (IRB) data on the length of hearings conducted by the IRB. This may be used to validate billing for court time for such hearings. Where discrepancies exist, we will request additional information to validate the billing of court time.
Audit steps and what a lawyer can expect
Request for documentation and information
Rule 63 outlines the types of records lawyers are required to retain and for how long. Rule 71 sets out LAO’s authority to request information from a lawyer or service provider in support of account submissions.
Should information be required during the course of an audit, ACU will advise you, in writing via LAO’s Online Portal, what is required. We require that any information/documentation/explanations requested be provided within 30 days of the date of our written request.
If additional time is required, you must submit a request in writing to us through the Online Solicitor Portal. Outline the circumstances/reasons for your request for additional time. Reasonable requests for extensions will be granted.
If a response or request for extension is not received by ACU within 30 days, we will advise you in writing that you have an additional 15 days to provide the required documentation/information. In absence of a response, we will begin recovering the funds deemed necessary. For more information, please see the Failure to respond section.
Audit of account
Once we have all of the required information to begin, the following will be reviewed:
- Online billing details
- Dockets and invoices submitted at time of billing
- Supplemental information contained in LAO’s PeopleSoft system
- Additional information provided by the lawyer at LAO’s request
Following a preliminary review of an account, you will be notified, in writing via the online solicitor portal, should your account not meet one or more of LAO’s billing requirements. You will be provided with details of any billing error, and in the event of an overpayment, the amount to be repaid to LAO.
You have an opportunity to appeal the preliminary findings of an audit by providing the required documentation/information outlined in the letter received from ACU. In most circumstances, the type of information that must be provided to appeal the preliminary findings will include court information, transcripts, or invoices that substantiate the online billing. Deadlines for providing supporting documentation will be provided in our letter.
Potential amounts to be recovered are determined during the preliminary stages of an audit. This information is provided to lawyers so they are aware of the dollar value of potential billing discrepancies.
These potential recoveries may change should the lawyer provide the requested documentation supporting their online billing within the prescribed timelines.
The amount to be recovered is determined by the account information submitted, documentation to support entries made on the account, degree of compliance with the Tariff and Billing Handbook or Disbursement Handbook, or circumstances that may call into question the accuracy of the account information.
If a lawyer fails to respond, recoveries will be processed as outlined in the letter sent to the lawyer by ACU. Information or documentation received after the due date may be considered, but will not necessarily change the outcome of the audit and/or result in a reversal of funds recovered.
Funds to be recovered will be deducted from future payments to the lawyer. When such amounts exceed $10,000, 50 percent of payments will be applied to amount owed until all funds have been recovered by ACU.
Should no request for payment for a new account be submitted within six months, and LAO has not been able to recover funds owed, LAO may pursue the matter by other legal means. Expenses incurred by LAO to recover funds will be added to the amount owed.
What happens if a lawyer fails to respond to an audit
If a lawyer fails to respond to requests for documentation or refuses to provide the documentation required, ACU will initiate steps to recover funds.
You will receive 30 days’ notice for providing documentation, information or explanations. Should you not respond within 30 days of the notice, a second attempt will be made to contact you, and an additional 15 days to respond.
A lawyer’s failure to provide any required documentation may result in a full or partial recovery of the amount paid on the account.
Failure to respond to two or more ACU requests may result in the matter being referred to LAO’s Investigations Department. The lawyer’s Director General will be advised, and the file forwarded for roster management’s consideration.
Failure to respond to ACU requests is another common reason for initiating recoveries of funds paid to lawyers. To avoid this, it is recommended that you check the LAO Online Portal on a regular basis for messages. If set up for email/text notification, you will be notified if ACU sends you a letter via the portal.
ACU’s appeal process
We provide, in writing, the results of any audit that may result in a recovery of LAO funds. Lawyers may submit an appeal via the online solicitor portal within 30 days of the date on the ACU letter.
You are required to provide supporting documentation or information requested by ACU; not providing this information may result in your appeal not being considered.
An analyst will review your appeal and relevant documentation/information provided. You will be advised of the results of your request for appeal, including an explanation of the decision and any change in the amount recoverable.
Your request may result in additional documentation or explanation being requested by ACU.
Failure to fully or adequately respond to a request for additional information, documentation or explanation at any stage of an audit within the prescribed deadlines may result in the request for appeal to be deemed abandoned.
Analyst decisions on appeals may be further appealed to the ACU manager. You must then provide documentation to support your appeal and be in compliance with the relevant section of the Tariff and Billing Handbook. The ACU manager will then review the appeal and either confirm or reverse the analyst’s decision.
ACU manager decisions are final.
Referrals to other LAO departments based on audit results
Based on the results of an audit or information reviewed, the ACU manager may refer audited results to the Investigations Department or Director General. In such circumstances, the lawyer will be notified. The manager may also recommend that a lawyer be placed on a billing suspension. The ACU manager will advise the Director of Lawyer Service and Payments (LSP) in such a case, and the lawyer may then be subject to LSP billing suspension guidelines.
Common billing errors identified by ACU
Over the last several years, we have identified some common billing errors which often result in recoveries. A number of the most common are listed below:
- Missing or incomplete invoices
If a lawyer has not provided required invoices for disbursements, we will proceed to recover these funds. If invoices do not meet LAO requirements, we may recover funds where these do not clearly validate the services provided by a third party vendor.
- Vague or unclear docket descriptions
Dockets must be detailed enough to determine what occurred in court. For example, noting “court trial” or “attendance in court” is insufficient. Include the purpose of each court appearance, the stage of the trial, the justice presiding and other details to substantiate the hours billed.
Be clear in your descriptions of service how much time is spent on each service that takes more than half an hour to perform. Do not bill for blocks of time. LAO must know how long it takes to perform an individual service. If not, we may proceed to recover these funds.
- Services completed more than 30 days prior to effective date
ACU will recover funds when a lawyer has billed for services performed 30 days prior to a certificate’s effective date. The effective date is the date that LAO authorizes a lawyer to begin billing for services.
- Incorrect billing of court time
ACU will recover funds if it is determined that wait times/adjournments have been billed as court time contrary to rules outlined in the Tariff and Billing Handbook.
- Billing for in-house staff as third party disbursements
Disbursement invoices can only be billed to LAO when a third party vendor has performed these services. Should in-house staff perform these services, they must be billed as preparation time at the law clerk rate. This applies to staff that act as interpreters for the purpose of lawyer/client meetings.
- Billing for clerical/administrative services
Criminal certificates do not allow for account preparation. Failure to provide time of day for services of 30 minutes or more, including start and end times, may result in recovery of these funds.
Rule 63(1)(a)(i) requires lawyers to maintain a record all services of half an hour provided, including time of day.
- Incorrectly summarized trials, hearings, conferences and subsequent case conferences
Calculating tariff maximum
If the tariff item allows for billing of actual time at a case conference, settlement conference, trial management conference, LAO scheduled conference, trial, appeal or hearing, enter the number of hours in court or at hearing in the Hours in Court field. Please ensure that your dockets are detailed and accurately describe the nature of each court attendance. Where the tariff allows additional preparation time for subsequent hearing day(s), additional hours can only be billed online after the subsequent hearing is conducted. If the matter is adjourned or is resolved prior to the subsequent hearing day, no additional tariff is paid. If the value of the tariff is exceeded, counsel must request discretion for additional preparation time.
Trial and hearings
For first day of trial, enter only the court time in the Hours in Court column—preparation for the first day is covered by the initial authorization or trial authorization.
For the second and subsequent days, enter the number of days of trial in the # of Extra Days column and trial attendance time in the Hours in Court column.
Case/settlement conference authorizations
Do not enter the first pre-trial conference, case conference or settlement conference in either the # of Extra Days or Hours in Court column as both preparation and attendance are included in the initial authorization.
For the second pre-trial conference, enter only court attendance time as preparation time is included in the two-hour authorization for subsequent pre-trial conference, case conference or settlement conferences.
For third and following pre-trial conferences, each attendance is entered in the # of Extra Days column and court attendance time is entered in the Hours in Court column. Each extra day entered adds 2 hours for preparation to the tariff.
- Billed for incorrect vendor—use of agents
When submitting online bills, the acknowledging lawyer must identify in their online accounts who has performed the services and the number of hours attributed to those services. A lawyer may not bill for services using their vendor number when these have been provided by an agent, law clerk or student.