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Poor accounting costs city $1.4 million

Baltimore and its taxpayers had to pay an additional $1.4 million in fiscal 2011 due to faulty accounting procedures, auditors told the Board of Estimates on Wednesday.

The City of Baltimore Single Audit found “numerous material errors and misclassifications in financial statement balances.”

The city’s overall operating budget in fiscal 2011 was $2.26 billion, meaning the $1.4 million makes up less than 0.1 percent.

Comptroller Joan M. Pratt criticized the city’s spending practices and said her office warned city agencies during that fiscal year of a lack of controls in certain cases.

“They did not take our suggestions,” Pratt said.

When asked why, Pratt said: “I guess they had a different theory.”

Pratt said her office first detected problems with certain accounting practices in 2009 and auditors from her office brought them to the attention of city officials in various departments.

“These are recurring findings and the Department of Audits has made recommendations and they were not implemented. It has caused the city to spend money.”

The review released Wednesday showed a lack of controls in accounting for leases, cash, grants receivables, fleet management transactions and records for work-related absences in the Police Department, State’s Attorney’s Office, Sheriff’s Department and the Circuit Court.

The review listed a series of fiscal recommendations to prevent further auditing errors.

Pratt said a private accounting firm was hired to help monitor the review, adding to the overall “waste” to taxpayers.

“When there is a lack of internal controls, it can lead to fraud, waste and abuse,” she said.