The state Department of Revenue overpaid $22.6 million in refunds to two companies, and the only reason the mistake was caught was because the businesses returned the money, according to an audit released today.
As The Associated Press reports, Legislative Auditor Daryl Purpera’s Office says the overpayments during the last budget year went through five levels of state review before they were sent. One company received an improper refund of $20.8 million and the other $1.8 million, according to the auditors. Neither of the companies are named in the audit.
“In both cases, the department was unaware of the errors until the taxpayers recognized the mistakes and returned the overpayments,” the audit says.
The revenue department says the complicated refunds were from legal settlements involving multiple tax periods and tax types. In a written statement, the department says the mistake was corrected, no money was lost to the state treasury and greater controls have been put in place for handling these “extremely rare types of settlements.”
Purpera’s office also criticized the agency as having lax controls over state-issued credit cards and says it lacked a proper internal audit structure to detect errors and fraud. The audit recommends ways to beef up its oversight.
Revenue Secretary Tim Barfield says he agrees with most of the auditor’s recommendations, but adds: “It is also important to note that none of the findings resulted in any loss of revenue for the state or agency and prior to the (auditor’s) findings, the Department had already proactively begun taking actions to address the matters.”
