La. governmental agencies point fingers over accidental $26M issued in double tax refunds

La. governmental agencies point fingers over accidental $26M issued in double tax refunds
At the center of the issue are duplicate files released by the Division of Administration – Office of Technology Services (OTS). LDR officials argued the issue was solely the responsibility of OTS personnel. OTS officials responded by saying the blame should be shared among both agencies.

(WAFB) - The Louisiana Department of Revenue and Division of Administration (DOA) sparred over which agency was at fault over $26M of accidentally issued tax refunds in March when responding to a report released by the Louisiana Legislative Auditor (LLA).

At the center of the issue are duplicate files released by the Division of Administration – Office of Technology Services (OTS). LDR officials argued the issue was solely the responsibility of OTS personnel. OTS officials responded by saying the blame should be shared among both agencies.

The LAA report identified an unprecedented computer issue leading to the creation of duplicate direct deposit files. Neither personnel from LDR or (OTS) were aware the specific issue was possible, LAA found.

OTS staff did not recognize the duplication and released files to the bank. LDR was unaware of the duplicate files until taxpayers and financial institutions began reporting duplicate direct deposits, the report states.

“The failure to detect the duplication caused 66,780 individual income tax refunds totaling $26.9 million to be processed and refunded to taxpayers twice,” according to the report.

The LAA report states neither agency had effective controls in place to prevent duplicate files or to provide another layer of review before the files were released.

However, LDR Secretary Kimberly Robinson objected to the agency having any role in the error. In a response to LAA’s report, Robinson wrote, "the process of monitoring and releasing the direct deposit files in question was the sole responsibility of the Division of Administration – Office of Technology Services” and that “LDR did not have a role in approving the direct deposit files for release to the bank.”

OTS Chief Information Officer Richard Howze argued against that assertation. In a response letter, Howze stated, "while OTS acknowledges their part in the duplicate tax refunds having been generated, this responsibility was shared with LDR.”

Both agencies have since established new procedures to prevent the error from happening again.

Around 6,230 Louisiana taxpayers have yet to return double tax refunds accidentally sent out in March. LDR was still attempting to collect $1,895,749 as of Monday, Dec 23.

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