Is It Time for an Audit Tune-Up? Why Your Vendor Oversight Program Needs a Checkup

A strong audit program is like a finely tuned engine. It may be running smoothly today, but without a regular checkup, hidden issues can go unnoticed — and small inefficiencies can grow into bigger risks. That’s why an annual review of your audit program isn’t just a good idea; it’s essential. It ensures compliance, mitigates risk, and keeps your third-party collection vendors performing as expected.

Even the best programs benefit from a periodic tune-up.

Having audited collection vendors for many years, I’ve found an annual checkup isn’t just valuable for evaluating vendors — it’s just as important for evaluating your own audit process. A yearly review gives you the opportunity to ask: What worked well? What might have been missed? Did I incorporate new regulations or address changes in technology that affect my accounts and consumers? Am I auditing the same way I always have, or am I adapting to capture new risks and insights?

There are always more potential audit areas than time or resources allow, so it’s important to focus where it matters most — maximizing your oversight without wasting effort.

Lessons Learned

Over the years, I’ve experimented with different ways to conduct audits and strengthen vendor oversight.

One key lesson stands out: a single annual audit isn’t enough.

If significant issues are uncovered, waiting until the next audit cycle to detect them means you’ve already lost valuable time. Whether the challenge involves performance, compliance, or security, I’d rather know early and act quickly. That’s why I plan multiple touchpoints throughout the year. These may include interim reviews, performance check-ins, or targeted testing. I still consolidate everything into an annual summary — but I don’t wait a full year to engage.

Understanding the Vendor’s Processes and Policies

A true tune-up means looking under the hood. That includes understanding your vendor’s approach to hiring, training, and account management — as well as their communication policies and controls.

Ask about how emails and texts are handled. Can collectors freeform messages, or are templates used? What safeguards exist to prevent errors or inappropriate contact?

It’s perfectly reasonable to ask for strategy details — after all, these are your accounts. And don’t overlook technology. Understanding how a vendor uses automation, analytics, or even AI provides insight into both efficiency and risk.

Evaluate the Vendor’s Testing and Controls

Another area worth reviewing is how your vendor tests and monitors itself. What internal audits or controls are in place for compliance, cybersecurity, and accounting? How do they ensure staff integrity? How do they handle complaints?

And I definitely want to understand how they conduct oversight on their third parties!

Recent cases of internal fraud at financial institutions serve as a reminder that risk doesn’t just come from the outside. Ask how your vendor tests both new hires and trusted employees to maintain strong internal controls.

Spotting Gaps and Emerging Risks

Changes in regulations, portfolio composition, or vendor operations can all introduce new challenges. That’s why your annual review should include a clear-eyed look at what’s changed since the last checkup.

I like to add new tests to my audit process each year and be prepared for the unexpected. For example, even if your vendors aren’t permitted to use text messaging or email, you might still find a few instances during testing. If that happens, be ready with follow-up questions: How do they handle opt-outs? What controls prevent this from happening again? How do they ensure these practices don’t impact your consumers?

Industry shifts can surface quietly but have wide effects. New technologies, communication methods, or consumer expectations may alter how vendors operate — and how you need to oversee them. Building awareness of these changes keeps your audit program aligned with today’s realities, not last year’s assumptions.

One effective way to stay informed is by staying connected. Join your peers at industry conferences or in professional groups such as the Recovery Management Network. Discussing audit challenges, techniques, and emerging risks with others in the field often uncovers ideas you can apply directly.

And don’t hesitate to seek outside perspective. I rely on a mechanic for oil changes because I don’t expect to be an expert on every part under the hood — and the same principle applies here. Draw on the experience of trusted professionals, industry articles, and news sources to strengthen your oversight approach.

A good tune-up combines experience, insight, and a willingness to make adjustments. By staying curious and informed, you’ll keep your audit program performing smoothly no matter how the road ahead changes.

Enhancing Efficiency

A tune-up is also about optimizing performance.

Take time to evaluate whether your audit methods, tools, and schedules are still serving you well.

Look for the small adjustments that can yield big gains in effectiveness and efficiency — keeping your audit program running smoothly without unnecessary strain on resources.

Practical Steps for Your Checkup

Review last year’s audit outcomes and lessons learned.

Reevaluate your audit scope and frequency based on current risks.

Engage key stakeholders across compliance, operations, and vendor management.

Incorporate emerging risks such as new regulations or technology use (AI, texting, digital communications).

Schedule multiple oversight checkpoints throughout the year instead of relying on one annual review.

Don’t try to do it all alone. Consider third-party resources to assist or provide guidance.

Keeping Your Oversight Engine Running Smoothly

A strong vendor oversight program is never “set it and forget it.” It needs attention, reflection, and the occasional tune-up to stay effective. An annual audit checkup helps you identify what’s humming along — and what might need tightening — so your program remains resilient, proactive, and ready for whatever challenges the coming year brings.

Just like any finely tuned engine, consistent maintenance keeps your audit process performing at its best — protecting your institution and keeping your vendors running in sync.

Author: Judy Hammond

judy.hammond@resourcemanagement.com

Judy Hammond is founder and President of Resource Management Services, Inc. The corporation was founded in 1986 and specializes in auditing and consulting, serving the collection and recovery industry. As President of Resource Management Services, Inc., she has more than 35 years of experience with an emphasis on operational reviews for compliance and operational eﬀectiveness of collection operations, both for creditors’ internal collection and recovery operations as well as collection agencies and attorneys. She has worked with top banks and financial institutions, utilities, credit unions and telcoms, (and their vendors) and has conducted many Best Practices projects. She is author of various industry publications: “Comprehensive Agency/Attorney Usage Study,” “Comprehensive Agency/ Attorney Usage Study II” and “Collect More From Collection Agencies”. Her work with creditors who were looking to sell debt for the first time, and subsequent Buyer/Seller research was the foundation for the second corporation, The Debt Marketplace, Inc. She worked with Dennis Hammond as co-founders of the Debt Buyers’ Association, (now RMAi), building the foundations for industry standards, as well as the original code of ethics. She developed and produced two industry conferences, Collection and Recovery Solutions and Debt Connection Symposium & Expo, from their inception in 2002 and 2006, respectively, to 2022. Prior to starting her own company, she worked with two large collection agencies.

Resource Management Services, Inc. provides consulting on collection and vendor management topics.

With expertise and experience in collections, oversight and compliance, we understand the challenges faced by creditors in managing collections and recoveries while adhering to ever-evolving regulatory standards.

That’s why our team of seasoned experts is dedicated to providing tailor solutions that address your unique collection and compliance requirements.

From comprehensive consulting services to specialized training programs and meticulous oversight of third-party vendors, we offer a comprehensive suite of services designed to empower your team and optimize your compliance strategies.

We also offer third-party call monitoring oversight programs for creditors!

Contact our blog authors or Write to us at info@resourcemanagement.com for more information.

www.resourcemanagement.com

The Recovery Management Network(SM) (RMN) is a unique networking organization, strictly for creditors, providing collection and recovery professionals with the peer contact, resources and information they need to succeed in their jobs.

There is no fee to join this peer group, but creditors must be involved in the collection, recovery
or auditing departments at their organizations, and be interested in sharing experiences and ideas with other RMN members. For more info, see More Info on RMN.

Or, write to info@resourcemanagement.com

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