(AP) — Nebraska officials are canceling their contract with a Lincoln-based paper recycling firm after auditors found that the state failed to collect more than $60,000 from the company.

Auditor Mike Foley tells The Associated Press that Shredding Solutions, Inc. was required to pay a market rate for the paper that it picked up from state offices and sold for other uses.

Foley says the company paid a flat $25 per ton under a “verbal agreement” when the market rate ranged from $55 to $100 per ton. Auditors found that, over time, the company’s required monthly payments became increasingly late and sporadic.

Nebraska has since recouped more than $27,000. A state administrator says Nebraska is soliciting new bids under a simpler contract.

Shredding Solutions Inc. declined to comment.