Completed an audit for a client in Boise 6 months ago. Found a rate error, got it corrected, collected my fee. Now the client calls me because Idaho Power just issued another round of refunds — apparently the rate error went back further than the initial 24-month lookback and the PUC ordered the utility to extend the refund period. Client got an additional $14,000 check they weren't expecting. Am I entitled to a contingency fee on this additional refund?
Does your contingency cover savings you find AFTER the initial audit period?
Depends entirely on your engagement agreement. If it says your fee applies to all recoveries 'resulting from findings identified during the audit' then yes — the additional refund is a direct result of the error you found. If your agreement was scoped specifically to the initial 24-month period then it's less clear. This is why I include a 'tail provision' in my agreements: any additional recoveries arising from findings identified during the audit, received within 24 months of the audit completion date, are subject to the contingency fee.
Frank's tail provision is smart and I recommend it for everyone. Without it, you identify the error, the client benefits from an extended refund, and you get nothing for the additional recovery that your work made possible. The tail provision fairly compensates you for your original work product while putting a reasonable time limit on your ongoing claim. 24 months is standard. Some auditors use 36 months for larger engagements.
Reviewed my engagement agreement and it does say recoveries 'resulting from audit findings' without a time limit or a specific billing period restriction. Sent the client a polite invoice for 40% of the additional $14K. He paid it without argument because the language was clear. Adding a formal tail provision with a 24-month window to my template for clarity going forward.