City of Charlotte overpaid $617,000 for road work

By  | 

CHARLOTTE, MI (WILX) -- The city of Charlotte is working to get back nearly $617,000 it overpaid to a road contractor.

The State-Lincoln street reconstruction project was completed in October 2018, but officials discovered the mistake just three weeks ago.

City Manager Gregg Guetschow said the consulting engineer they used to oversee the project made the error.

"The engineers used the same progress payment number and they failed to recognize a payment had been made prior to that in September. We did not catch it at that time," Guetschow said.

The smaller contractor that performed the work also didn't catch the mistake.

"From their accounting standpoint, they were working from the report that they received from the consulting engineer. They said yep, this the amount owed to us. These are the quantities that were used. The payment came in and they never then added those all up and said, wait a minute, this project is $2,000,000 and yet, we received $2.5 million in payment. They did not do that."

Guetschow said that he found the error three weeks ago when he looked for funds for next year's street reconstruction program. As far as why he didn't catch the mistake sooner, he said they were in the midst of completing an audit and converting their accounting records.

"We weren't seeing financial statements prepared on the same regular basis as we'd previously seen. All of those things were a perfect storm internally here with other things we had going on related to our finances that caused us not to see them. "

Guetschow said last month was the first chance he had to dig into that part of the budget. Although he said that auditors would've discovered the error eventually.

The contractor has until August to pay the city back.

The city is waiting for a final report or analysis from the consulting engineer to see how this happened.

Charlotte hasn't had an issue with the company in the past. It will wait for the results of the report before deciding if it will keep doing business with the company.

Copyright 2019 WILX. All rights reserved.