Audit finds vendor overbilled Town of Chapel Hill more than $200,000

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CHAPEL HILL, N.C. (WNCN) – The Town of Chapel Hill was overcharged more than $210,035 by a local auto supply company, according to a state audit.

According to town officials, an employee with Walker Automotive Supply billed the town for auto parts not associated with work orders from January 2016 to March 2017.

For instance, $130,810 of the money the town was overbilled was spent on parts that did not even fit the town fleet vehicles, according to the audit. In addition, $75,923 was spent on parts that did fit the vehicles, but that did not match the work that was done.

While the vendor has fired the employee who did this and paid the town back  $130,000 for the wrong parts, the state auditor said the town is also to blame for what happened.

The state auditor said the town didn’t catch these errors because of a lack of systems interface and the town’s fleet manager did not sufficiently review the invoices from the vendor.

No one with the Town of Chapel Hill would speak on camera on Wednesday about what happened.

But officials did say that they are taking steps to prevent something like this from happening again.

A town official said they will be developing and implementing new fleet parts accounting procedures, evaluating current contracts on a regular basis, and reviewing documentation from vendors on all invoices.

Late Wednesday, town manager Maurice Jones released the following statement: 

“The Town of Chapel Hill has worked closely with the Office of the State Auditor since November 2018 to investigate an allegation that the Town was improperly billed for vehicle parts. The Town uses a local parts vendor to purchase and manage the parts inventory for our fleet management division.

We appreciate the State Auditor’s thorough review and guidance throughout the investigation. Although we have recouped a significant amount of money from the vendor, our internal investigation will continue.  As a result of this review, the Town has implemented additional accounting safeguards and internal controls to help ensure this type of incident does not occur again.”

The town has also renewed their contract with this vendor through next year and they are going through invoices to see if any more repayments are needed.

According to the report, the Orange County District Attorney’s office is going to determine if they will pursue any criminal charges for improper billing.

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