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Accountabilityby Mark Reutter9:18 pmAug 9, 20220

A $2 million check goes to a delinquent taxpayer

Software from an outside vendor blamed, while Baltimore’s Department of Finance now promises to review refund checks over $10,000

Above: Baltimore City government officials are trying to explain an “erroneous refund” caused by “a key-in error” compounded by an as-yet-unexplained software glitch. (Mark Reutter)

Not manna from heaven, but something filled with dough – a seven-digit check from the City of Baltimore was mailed to a business that actually owed the city money.

Issued last March, the refund check for $2,014,571.63 was immediately deposited by the business owner, who proceeded to spend $58,355.55 of it before the city caught wind of the mistake.

That was four weeks later, according to a synopsis report issued today by Baltimore Inspector General Isabel Mercedes Cumming, whose office was brought in to investigate.

Director of Finance Henry Raymond is calling the incident an “erroneous refund to the incorrect party” caused by “a key-in error” compounded by an as-yet-unexplained software glitch.

After issuing five “demand letters” to the owner to no avail in late April, the city was able to freeze the bank account and retrieve $1,956,216.08 in mid-May.

The $58,000 spent by the owner and organization, both unnamed in the report, are the subjects of an ongoing criminal investigation, according to Cumming, who declined further comment.

Transposed Digits

It all started in June 2021 when the city’s outside vendor transposed the account digits of a company paying a $1,008,905.89 personal property tax bill, sending the money to an organization that was $1,613 in arrears on their own taxes.

There the matter lay for about eight months – as an internal billing error – until the Bureau of Revenue Collections decided to fix the problem by applying the funds in the wrong account to the right one.

Rather than move the money, the vendor’s software “duplicated” the credit in the wrong account (to $2 million) and then processed a refund check for the full amount.

“To date, the vendor has been unable to recreate or explain the duplication,” Raymond explained in response to the report.

Nor could Raymond explain why BRC released a $2 million check to an organization that owed the city back taxes.

From now on, Raymond said, his department will verify that all personal property tax refunds over $10,000 are valid and that no outstanding bills exist on the account.

What’s more, his agency “will continue to follow up with the vendor to obtain an explanation” of the software snafu that sent money raining down from City Hall.
• To reach a reporter: reuttermark@yahoo.com

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