KARE 11 Investigates: Second dealership admits double-billing errors

KARE 11 Investigates: Dealer admits to double-billing

HIBBING, Minn. - A Hibbing Ford dealership with a master state contract to sell sedan police interceptors admits it overcharged law enforcement agencies 67 times in the last three years, but contends it was accidental.

KARE 11 has been investigating the complex, little-examined, but high-dollar realm of police car procurement for months.

We’ve discovered missed warnings, a state buying system with virtually no checks and balances, and tax dollars ripped off with impunity.

Officials launched an ongoing criminal investigation after KARE 11 exposed Nelson Auto of Fergus Falls overcharging taxpayers for equipment on specially equipped Ford SUVs sold to police departments across the state.

The overcharges continued for years, even though a whistleblower told KARE 11 he warned state officials in 2015.

When KARE 11 expanded the investigation to look at other police vehicle contracts we found examples of over-billing by a second dealership. Records showed Ford of Hibbing overcharged Hennepin County, Lakeville and Bemidji.

Ford of Hibbing holds the contract to sell Ford Taurus sedan police interceptors statewide.

The master contract spells out items the vehicle “must include” in the standard base package, including an incandescent bulb spotlight and full color-matched carpeting.

But when KARE 11 reviewed Hennepin County’s purchasing records, we discovered Ford of Hibbing charged taxpayers an extra $112 for carpeting that was supposed to be included. And when the County upgraded to an LED spotlight, it did not receive a $187 credit for the incandescent light that comes standard.

“Whether it was malicious or whether it was shoddy booking keeping, I don’t know,” said Curtis Haats, the finance director in charge of purchasing vehicles for the Hennepin County Sheriff when KARE interviewed him about the double billing back in April. “We’ll let the legal minds figure that out,” he added.

Ford of Hibbing declined to do an interview, but Bob O’Hara sent us a statement that that said in part, “We were deeply concerned when we heard about the KARE 11 report. We wanted to identify what happened and why it happened, so we launch (ed) our own internal audit.”

Ford of Hibbing says their internal audit revealed 67 errors and they are refunding $10,450.

The dealership blamed the double-billing on customer mistake, claiming that law enforcement agencies did not fill out their purchase orders correctly.

“We have taken corrective action by adding another step in the review process so this does not happen in the future,” the dealership said.

The Minnesota Department of Administration is the state agency that oversees the police car contracts.

Commissioner Matt Massman says he agrees the overcharging by Ford of Hibbing appears to be isolated errors rather than the widespread double-billing KARE 11 exposed at Nelson Auto. That case remains under criminal investigation.

“They appear to be different at this time,” said Massman. “They appear to be very different, but I think they both demonstrate some of the fundamental flaws that we’re trying to fix in the system.”

To help detect double-billing, Massman and Governor Dayton’s administration have been calling for a massive upgrade to the state’s procurement system. But the legislature rejected the Department of Administration’s request for $10 million to move away from paper-based records to a modern “eProcurement” electronic system.

© 2017 KARE-TV


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