Updated to add list of the top 10 recipients of payouts.
About 260 state and local government agencies and nonprofits soon will get their share of a $4 million pay out by Ricoh Americas Group to settle liability for overcharges by its subsidiary IKON Office Solutions, the state Department of Enterprise Services announced Thursday.
The biggest recipient of a windfall is King County, which is scheduled to get $736,000 when the payouts are made May 15, DES spokesman Jim Erskine said in a news release. No. 2 is the state mega-agency, Department of Social and Health Services.
“Settlement amounts for each account will range from $100 – $140,000, with most being for less than $1,000,” the announcement says. “The agreement follows a review of IKON’s billings under the state’s master contract for copier equipment.”
Here is a list of the 10 largest payouts and recipients:
$735,698 – King County – finance office
$343,135 – Department of Social and Health Services, Financial Services Administration
$155,455 – state Employment Security Department, financial office
$145,202 – Central Kitsap School District
$126,316 – state Office of the Superintendent of Public Instruction
$122,298 – Seattle, city finance department
$118,561 – state Department of Labor and Industries, fiscal department
$112,966 – Issaquah School District
$112,824 – University of Washington, financial-accounting office
$80,645 – Washington State University
Joyce Turner served as director of Enterprise Services and its predecessor, General Administration, during the period of time the overcharges were being sorted out.
As we reported here last year, the settlement was based upon a sampling of contract sales by an independent auditor – hired in response to an anonymous complaint to the state Attorney General’s Office in 2009. The settlement, announced last July by the state Department of Enterprise Services, covers over-payments to Ricoh subsidiary IKON Office Solutions that date to 2007.
Agency spokesman Steve Valandra said last year that Ricoh “inherited the issue” after purchasing IKON in 2008. Ricoh has a $17 million a year contract with the state for supply of copiers and service, which had been set to expire in April. But the company still has the contract with the state.
The company had paid for the review of charges by PricewaterhouseCoopers LLP after the issues were raised to the attorney general. About $3 million of the settlement payments are related to equipment charges and $1 million is related to copies and maintenance.
“Once they were made aware of it they took care of it,” Valandra said last year about Ricoh’s inherited problem. He explained that companies have an opportunity to “cure the ill” before the state acts against a contract.
Last year DES and Ricoh USA put out a joint press release in which Ricoh’s national director of state and local government sales, Steve Bissey, said they felt “confident that we have taken the steps necessary to provide greater transparency to our sales and invoicing procedures in the future.”
A spokeswoman for the company in Pennsylvania declined to comment further at the time.
Contracts for providing services to the state are big money, and Ricoh and IKON are not the only firms accused of overcharging.
A state audit faulted Office Depot three years ago for $306,000 in overcharges it said it found in spot checks of office-supply sales to DES’s predecessor – the former Department of General Administration – in 2009.
Our report at the time is here and links to audit documents are here and here.