SAN FRANCISCO (KCBS) - Office Depot has agreed to pay the city of San Francisco over four million dollars after accusations it systematically overcharged for supplies according to City Attorney Dennis Herrera.

The settlement offer has to be approved by the Board of Supervisors.

KCBS' Anna Duckworth Reports:

Herrera said the vote will likely happen after the holidays, but the discrepancies were discovered by a city controller's audit.

Now the goal is to recover millions of taxpayer dollars from Office Depot.

San Francisco had a five year $18 million contract with Office Depot, but the audit found the company failed to give mandated discounts for a full range of supplies and services.

Herrera said the office supply chain was found to have bilked $5.75 million dollars though the settlement isn't quite that much.

After a year of negotiations Office Depot will be returning $4.25 million to the city in a combination of cash payments and products.

"Municipal and state governments have to be vigilant to make sure they're getting the services that they contract for and that taxpayer dollars are being protected to the greatest degree possible," said Hererra.

He added that Office Depot had earlier similar settlements with the state of California and the state of Florida.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)