Baltimore City's finance department sent $2 million to wrong company, inspector general report says – Baltimore Sun

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The Baltimore Department of Finance erroneously refunded the wrong company more than $2 million, of which nearly $60,000 has yet to be recovered, according to a report Tuesday from the city’s inspector general.
Through a vendor that handles payments, the Bureau of Revenue Collections made a payment of about $1 million toward the wrong organization’s property tax bill in June 2021. Inspector General Isabel Mercedes Cumming’s summary report of the investigation did not name the parties.
Director of Finance Henry Raymond wrote in a response to the Office of the Inspector General that the city’s payment vendor had accidentally transposed digits in the two parties’ account numbers.
Next, the city’s vendor-provided software system duplicated the payment when the finance department attempted to reverse the incorrect payment in March 2022, instead issuing a $2 million check that the company’s owner deposited into an account in April.
“To date, the vendor has been unable to recreate or explain the duplication,” Raymond wrote in his department’s response.
The owner then spent about $58,000 of the wrongly issued funds, which the city cannot recover, according to Cumming’s report. A criminal investigation into the company’s owner is ongoing. After the bank placed a hold on the account, the remaining $1.9 million was wired back to the city in May, the report said.
The inspector general’s report recommended that the Department of Finance examine the contracts with both the software and the payment vendor that made mistakes “to determine if any financial loss protection exists.”
The report also suggested that the finance department work with the software vendor to create better refund processes to prevent future errors. In his response, Raymond wrote that the Department of Finance had updated its policies to require a review before refunds over $10,000 are issued.
Copyright © 2022, Baltimore Sun
Copyright © 2022, Baltimore Sun

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