Cites Datacorp Audit by Independent Law Firm : BSD Bancorp Says Overbillings Are Corrected

An external audit conducted by a law firm has determined that BSD Bancorp “properly and expeditiously” corrected overbillings generated by a BSD Bancorp data-processing subsidiary, BSD Bancorp said Wednesday.

The review was sparked by the discovery late last year that the San Diego-based holding company’s BSD Datacorp subsidiary was overbilling customers, the company said. At the time, BSD Datacorp was servicing BSD Bancorp banking subsidiaries and other, independent financial institutions.

BSD Bancorp has sent a copy of the independent review to the Federal Deposit Insurance Corp. and “consider(s) the matter to be closed,” according to BSD Bancorp Chairman James S. Brown.

BSD Datacorp reported a $191,000 net loss in 1986, contrasted with a $63,000 net profit during 1985. BSD Bancorp blamed the loss in part on a “temporary freeze on the addition of new clients for the purpose of allowing improvement in the quality of service to existing clients.”

BSD Bancorp conducted an internal audit to determine the amounts of overbilling and subsequently made “adjustments” to customer accounts, a company spokesman said.

The San Diego-based bank holding company then hired an “outside law firm” that used an “independent national accounting firm” to review the overbillings, according to the spokesman, who declined to name the two firms.

The external audit concluded that BSD Datacorp made proper adjustments to customer bills in a “timely manner,” the spokesman said.

BSD Bancorp, the parent company of the Bank of San Diego, American Valley Bank, Coast Bank, Bank of La Costa and Borrego Springs Bank, had assets of $371.9 million on Dec. 31. It reported a $54,000 net profit for the fourth quarter ended Dec. 31.