Audit Finds Over $160,000 in Taxes Collected in Error

By Lura Jackson

 

The most recent audit revealed that the city has inadvertently collected just over $160,000 extra in taxes from Calais residents. The discovery was revealed at a city council meeting on March 9th when RKO auditor Hank Farrah relayed the findings of the audit.

Farrah explained that the budgeting error occurred when a large surplus from the school was accidently put into appropriations in fiscal year 2015-2016. Along with a few other similar budgeting errors, the total amount that was mistakenly collected from taxpayers was about $160,000. The same error occurred in fiscal year 2016-2017, meaning the error happened at least twice. However, Farrah said that it has now been noted and it will no longer be an issue going forward.

City Councilor Mike Sherrard noted that $160,000 is approximately equivalent to 1 mil, and he suggested that the city would be able to lower its tax rate by 1 mil without any negative consequence. However, as Farrah explained, the additional funds have put the city in a better financial situation. Mayor Billy Howard said that this would enable it to proceed with much needed public works projects such as road repairs. 

The city will decide whether it will lower the mil rate or keep the additional funds at an upcoming budget meeting.

Other findings in the audit were generally not significant and all-in-all Farrah reported that the city’s audit looked clean, adding that he was very pleased with how it had been shaping up over the course of the past year and a half. He said that the city would be moving from having two major deficiencies in its report to having nothing, something that Councilor Artie Mingo said was unprecedented in his memory for the city.

Major issues in the past included the city and school reconciliation process, which was inefficient and produced various errors. When Farrah began working with the city, the existing process for city and school reconciliation was the first issue he wanted to address. As of July 1st, 2016, that issue has been resolved thanks to the creation of a separate checking account for the school. With the new procedures in place for reconciliation, the difference in reconciliation between school and city dropped from $70,000 in fiscal year 2014-2015 to $30,000 in fiscal year 2015-2016, and Farrah said that he anticipates it will decrease further still for fiscal year 2016-2017. There were a few minor issues in the creation of the new account including the school transferring upwards of $600,000 to the city in error, although this will soon be reconciled by the city. 

City councilors and Mayor Howard expressed their appreciation of how easy the new auditing reports are to read, and also were grateful that the audit has been increasingly timely. Farrah said that the majority of the work has been done by City Finance Director Crystal Galina and School Finance Director Julie Murray. Farrah said that the audit for the current fiscal year should be on time with a projected completion date of December 31st, 2017.