City in Tennessee mistakenly overpaid worker $44,000 for mileage. Now it’s suing her

A clerical error led to a city in Tennessee accidentally reimbursing an employee $44,000 for gas mileage — more than her annual salary. According to media reports and court documents, it took nearly seven months for officials to realize the mistake.

City officials said the employee stopped cooperating and submitted her resignation. Now the city is suing to recoup taxpayer losses.

Eulena Danielle Davis, former outreach coordinator for the Homeless Outreach program in Chattanooga, is accused of failing to inform officials after she mistakenly received $44,010.27 for mileage reimbursement in a February paycheck, according to a lawsuit filed last month in Hamilton County Circuit Court and shared by WTVC.

Chattanooga sits on the Tennessee-Georgia state line, about 50 miles from the North Carolina border.

Davis could not be reached for comment by McClatchy News, and a spokesperson for the city directed a request for comment on Friday to city auditor Stan Sewell.

Sewell attributed the mistake in part to the pandemic, saying a payroll staff member entered the wrong amount for reimbursement into the payroll system.

“At the time this error occurred, staff were working from home due to the COVID-19 pandemic. In addition, the Payroll Supervisor was out on FMLA and the staff were working on implementation of a new system,” Sewell told McClatchy News in an email. “Thus, the Payroll Division was understaffed, handling an additional workload and working from home.”

According to the complaint, Davis has worked for the city of Chattanooga since December 2019. As an outreach coordinator, her base salary was $31,548.

In January, Davis reportedly submitted a request for mileage reimbursement totaling $432.17. Sewell said that request was verified and approved by payroll staff. But on Feb. 11, court filings state, the amount was incorrectly entered as $44,010.27, resulting in Davis receiving a paycheck for more than $45,000.

Human Resources didn’t discover the over-payment until Sept. 1, according to the lawsuit.

Davis was immediately placed on administrative leave and called in for a meeting with HR on Sept. 7, where she reportedly told officials she knew nothing about the bloated reimbursement payout.

According to the complaint, the city asked Davis for copies of her bank records to see if the money was ever deposited — but she never responded. City attorneys then gave her until the end of the business day on Sept. 13 to return the funds.

Davis submitted her letter of resignation instead, court filings state.

The city of Chattanooga filed its lawsuit seeking repayment of the $44,000 on Sept. 30. Sewell said his office didn’t find any other glaring mistakes after reviewing the city’s financial transactions for the fiscal year that ended June 30, and he said Chattanooga has since switched to a new accounting system that generates employee expense reimbursements electronically.

Previously, those reimbursements were manually entered by a payroll division staff member, Sewell said. A second staff member was required to check behind them for errors.

“Anytime you insert a human input process, the opportunity for human error exists,” he said.

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