The inventory check conducted by a private contractor (name of the contractor) has revealed a 20 percent discrepancy which goes in a downward direction. The warehouse ledger shows the total inventory's (crude oil) worth to be 1 million US dollars, however the inventory check report provided by a private contractor shows the total inventory's worth to be at around 800 thousand US dollars. The internal investigation of embezzlement has been initiated as of the 4th of may.
The phase which goes in a downward direction is where the rubber meets the road and where the shoe pinches, for it is a Russian idiom written in English words. I personally think that with the context at hand one can easily infer what it means.
PS: If it is incomprehensible to native speakers, I’d like to know how it should be phrased to be comprehensible.