MacrosLM
Audit & Controls
THREE-WAY MATCH / PROCURE-TO-PAY /
CASE: PEABODY PROPERTIES
AUDIT TEARSHEET · THREE-WAY MATCH TESTING · FY2024
Peabody Properties · Three-way match anomaly testing
10,442 procurement transactions tested across the PO × receiving
× AP triangle. 9,891 clean matches, 551 exceptions, 14 escalated
to control deficiency memo.
CLIENT PEABODY PROPERTIES LLC · PERIOD FY
DEC-2024 · ENGAGEMENT Y2024-AP-03 · TEAM
MacrosLM Audit
Population
10,442
Transactions in scope
Match rate
94.7%
9,891 clean matches
Exceptions
551
5.3% of population
Control deficiencies
14
Escalated to memo
01POPULATION
02MATCH RESULTS
03EXCEPTION TAXONOMY
04VENDOR DRILL-DOWN
05CONTROL DEFICIENCIES
§ 01Population and scoping
The three-way match procedure tests whether every disbursed dollar can
be traced to a properly authorized purchase order, a documented receipt
of goods, and a vendor invoice with matching terms. Testing was
performed across the full population — no sampling — using MacrosLM's
reconciliation engine.
Engagement scope
- Procedure
- Full-population three-way match
- System
- NetSuite ERP + Coupa AP
- Period
- Jan 1 – Dec 31, 2024
- Match keys
- Vendor ID, PO#, Item, $
- Tolerance
- ±2% qty · ±$25 price
- Materiality
- $45,000 per transaction
- Sample method
- 100% test, no sampling
Population segmentation · $ value
| Spend category |
Txn count |
Total value |
% of pop. |
Avg ticket |
Risk band |
| Property management |
3,841 |
$18.4M |
36.8% |
$4,789 |
Standard |
| Capital improvements |
621 |
$14.2M |
28.4% |
$22,866 |
Elevated |
| Utilities & services |
4,108 |
$9.8M |
19.6% |
$2,386 |
Standard |
| Professional services |
487 |
$4.5M |
9.0% |
$9,240 |
Elevated |
| Tenant fit-out |
912 |
$2.8M |
5.6% |
$3,070 |
Standard |
| One-time vendors |
473 |
$0.3M |
0.6% |
$634 |
High |
| Total |
10,442 |
$50.0M |
100.0% |
$4,789 |
— |
§ 02Match results · the triangle
Each transaction was tested across all three legs of the PO–GR–Invoice
triangle. A clean match requires all three documents present and
reconciled within tolerance. Below: the dispositions and the breakdown
of where each exception type fell.
Match disposition
| Disposition |
Count |
% pop. |
$ value |
| Clean match |
9,891 |
94.74% |
$47.3M |
| Within tolerance |
312 |
2.99% |
$1.4M |
| PO retroactive |
141 |
1.35% |
$0.6M |
| No PO |
62 |
0.59% |
$0.4M |
| No GR |
28 |
0.27% |
$0.2M |
| Above tolerance |
8 |
0.08% |
$0.1M |
| Total population |
10,442 |
100.00% |
$50.0M |
Where the triangle breaks
Read: 42% of breaks happen at the PO↔Invoice leg —
typically retroactive PO creation after invoice receipt, indicating
procurement bypass. The most material weakness is the
9% with a missing third leg entirely — these
escalate to the deficiency memo.
§ 03Exception taxonomy and root cause
Each of the 551 exceptions was tagged to a root cause and re-validated
against management's compensating controls. 537 cleared under
compensating evidence; 14 did not.
Exception drill-down · root cause analysis
| Root cause |
Count |
$ value |
Compensating control |
Disposition |
| PO created after invoice received |
141 |
$612K |
Manager sign-off email |
Cleared |
| Quantity received < quantity invoiced (≤2%) |
187 |
$842K |
Within tolerance + GR confirmed |
Cleared |
| Price variance (within ±$25) |
125 |
$561K |
Vendor master price-list |
Cleared |
| Recurring services (utilities) |
28 |
$184K |
Blanket PO + monthly cert |
Cleared |
| Emergency repairs (after-hours) |
14 |
$94K |
After-fact PO + property mgr memo |
Cleared |
| One-time vendor · no PO |
42 |
$248K |
CFO approval letter on file |
Cleared (mfg) |
| Duplicate vendor master entries |
6 |
$41K |
Pending vendor consolidation |
Open |
| No PO, no compensating evidence |
8 |
$73K |
None found |
Open |
| Total exceptions |
551 |
$2.66M |
— |
— |
§ 04Vendor-level concentration in exceptions
86% of unresolved exceptions trace to 4 vendors. These are high-volume,
low-ticket service providers where procurement discipline has
historically been weakest. Engagement letter recommends a re-onboarding
sweep.
Top exception-contributing vendors
| Vendor |
Profile |
Txn / yr |
Exception rate |
$ at risk |
Open items |
| Northpoint Property Services |
Recurring maintenance |
412 |
8.7% |
$31K |
4 |
| BlueBrush Painting Co. |
Capital improvements |
38 |
26.3% |
$22K |
3 |
| Stonewall Plumbing & HVAC |
Emergency & scheduled |
156 |
11.5% |
$19K |
3 |
| Foster Landscape Group |
Recurring services |
82 |
14.6% |
$10K |
2 |
| All other vendors (167) |
Mixed |
9,754 |
4.0% |
$32K |
2 |
| Total |
172 vendors |
10,442 |
5.28% |
$114K |
14 |
§ 05Control deficiency memo — preliminary
findings
The 14 unresolved exceptions cluster into two control gaps. Both are
material in design — not yet material in magnitude. Recommendation
pending closing meeting.
Finding 1 · No-PO disbursements
8 disbursements totaling $73K were
made to one-time vendors with no purchase order and no written CFO
approval letter — the standing compensating control for one-time
spend.
-
Avg ticket size $9.1K · all below $45K materiality individually
- Aggregate above procurement-policy threshold
- Process owner: AP Manager · 2024 turnover at this role
Significant deficiency · proposed
Finding 2 · Duplicate vendor master
6 disbursements totaling
$41K processed against duplicate
vendor master records. No evidence of fraud — but design gap allows
split-payment circumvention of approval limits.
-
2 vendor pairs identified: Northpoint Property Services A/B;
Foster Landscape Group A/B
- Created in 2022 by different procurement team members
- Vendor master de-duplication project on roadmap for Q2 2025
Control gap · process remediation