Because of an administrative foulup, the District of Columbia government over the past year spent about $3 million for services it had already paid for, city officials say.
Most of the double disbursements were discovered and the money recovered within 10 days, according to the city controller, Alfonse G. Hill.
But as of this week, the city is still owed $66,878.06 as a result of the extra payments, Hill said. Most of this sum was disbursed nine months to a year ago, and the city is contemplating legal action to get it back.
Hill said the city is still "in the talking stages" in an attempt to retrieve the money, but may soon refer some of the cases to the corporation counsel for collection.
The amounts misspent and still outstanding range from $19,000 for an architect's fee to $185 to a city pensioner. Most of the 11 checks outstanding were duplicate payments to leaseholders.
Hill said the city is aware of the factors that led to this problem and has taken corrective steps.
Most of the $3 million erroneously disbursed was sent out in October, November and December of last year, the first three months when the city switched to its new Financial Management System (FMS) computerized accounting operation.
The double payments were just one of a series of problems that the city has encountered in trying to make the FMS system operable. American Management Systems Inc., the consultants who designed and installed the $38-million system, told the city earlier this week that it cannot work in the "operating environment" of the District government and will no longer help the city run the computers.
The duplicate payments occurred because city employes were unfamiliar with the new system and it was taking up to six weeks to process the paper-work and issue a computer check, Hill said. Consequently, some vendors pressed for prompter payment and city officials issued some of them checks by hand.
Problems arose when these officials failed to tell the computer system that a check had been issued manually, and the computer subsequently issued a check for the same service, Hill said.
Thus the federal government, for instance, received two checks of $1.6 million from the District government for payroll withholding taxes last November when only one check was required.
This error was quickly discovered during reconciliation work, Hill said, and the extra payment was applied to the obligation for the next two-week pay period.
About 95 checks were involved in the double disbursements, almost all of them in last three months of 1979, Hill said.
Since then the city has cut down dramatically on the number of checks that are issued manually, to about 10 a month, and each has to be approved by him in advance, Hill said. Further, any check written by hand must be reported to the computer system within 24 hours to avoid duplicate payment, he said. The amount of time it now takes to process checks through the computer has been "reduced signigicantly," he said.
Hill said he did not know how much interest on the $3 million might have been lost, but he said he did not think it amounted to much.