The District of Columbia’s finance office will scrap a $120 million computerized tax system that has been the subject of a lacerating audit, The Examiner has learned.
Chief Financial Officer Natwar Gandhi told D.C. Council members Monday morning that the system will be put out to bid. Stephen M. Cordi, Gandhi’s new deputy in the troubled tax office, told The Examiner it may take up to four years to get a new system in place.
On Monday, The Examiner reported on a scathing audit, paid for by the finance office, that condemned the automated tax system as “a failure.”
The system was sold to the city by Accenture LLP, an international conglomerate that specializes in government systems.
Gandhi has been damaged by allegations that two low-level employees stole upward of $40 million through a series of phony property tax refunds. It’s believed to be the largest public corruption scandal in city history.
Auditors did not make direct reference to the tax scandal, but said that the current system left room for corruption and cost the city untold millions in uncollected revenues.
Accenture’s spokesman, Peter Soh, hotly disputed the audit’s findings.
“To us, it’s a draft report from a vendor that hadlittle interaction with us or input from us on a highly complex integrated tax system,” Soh said. “They spent less than four hours total with Accenture to learn about a complex project that included more than 1,200 deliverables and milestones.”
Soh said that the auditors hired by the city had little experience working with high-tech systems, which he said led them to critical errors, including examining the wrong contracts.
Cordi said that the Accenture system was put together in a time of “crisis” for the finance office, when tax documents sat moldering on office floors for weeks and months. Since putting in the system, the city has collected — or saved in labor expenses — nearly $113 million, he said.
Accenture has had trouble in other states. In 2000, Ohio canceled a tax office contract because Accenture couldn’t adequately address the needs of Ohio’s property tax division. And in 2007, the Department of Justice joined a false-claims suit against Accenture and two computer companies, alleging that the three defendants were sharing kickbacks on government contracts.
Soh said that Accenture is cooperating with the Justice probe.
Got a tip on the finance office? Call Bill Myers at 202-459-4956 or send him an e-mail, [email protected].
