Posted on August 12, 2022

Baltimore Finance Department Sent $2 Million Refund to Wrong Party, Inspector General Reports

Emily Sullivan, Baltimore Banner, August 9, 2022

A series of cascading errors by Baltimore’s finance department and city vendors led the Bureau of Revenue Collections to inadvertently send the wrong entity a check for $2 million, nearly $60,000 of which has not been recovered, according to a new report from the Office of the Inspector General.

The chronicle begins after a third-party vendor responsible for processing numerous city payments bungled a payment meant to satisfy a company’s roughly $1 million property tax bill, accidentally paying Baltimore on behalf of a different organization, the owner of which held about $1,600 in outstanding property tax. A public synopsis of the report, published Tuesday morning, does not name the parties involved.

The finance department attempted to transfer the payment from the organization’s account to the original company’s account — but instead applied another nearly $1 million payment to the organization, which received a check for $2,014,571.63. Rather than alerting the city, the organization’s owner deposited the check into their bank account on April 1.

The report synopsis blames the duplication error on “the city’s software system for property tax bills, provided to DOF by a contracted software vendor.”

The Bureau of Revenue Collections sent five demand letters on April 28 to the owner, organization and other addressees associated with them. The OIG sent subpoenas to the organization’s bank, which provided documents showing that the owner spent $58,355.55 of the funds and had an overdrawn balance. None of the money went to the organization’s $1,600 property tax bill, which remains outstanding.

The bank placed a hold on the owner’s account and wired the remainder back to Baltimore, but could not recover the spent money. The OIG alerted “appropriate law enforcement agencies,” which are conducting an ongoing investigation into the owner.