APS tax penalties of $666K are totally inexcusable

One would think an organization of 15,000 employees that’s been around since 1891 would have its house in order concerning taxes. And that the largest public school district in the state — which is totally reliant on tax revenues to operate — would be paying its fair share of payroll taxes, and on time.

But apparently not at Albuquerque Public Schools, which faces tax penalties totaling $666,379 for late payment of payroll taxes and missing W-2 forms.

In the district’s audit report for the fiscal year that ended June 30, 2020, reviewers highlighted overdue submissions of W-2 forms for 2018 and late payment of payroll taxes for the fiscal year that ended Sept. 30, 2019, in their findings. “The school district is not in compliance with state of New Mexico statutes and is considered (to have) lost funding that should be used for education,” the audit report said.

To say the findings are inexcusable would be an understatement.

The executive director of accounting at APS, Ben Lubkeman, says the late payment of payroll taxes was caused by human error when a “process-level report was ran at a wrong level at the payroll site.” In layman’s terms, the report didn’t include all APS employees, and payroll taxes were not paid. That’s a big no-no to the IRS, which relies on periodic payroll tax deductions to fund government throughout the fiscal year. Churches have lost their properties for such violations.

Lubkeman says APS didn’t discover the error for about four weeks. Whatever happened to the classroom principles of checking your math and showing your work?

Lubkeman says the late filing of W-2 forms was a result of a law changing the due date. Well, we haven’t yet heard of other school districts overlooking the due date change. Why did APS?

APS has paid the payroll taxes owed, and Lubkeman says APS has appealed the $666,379 of penalties, but the school district hasn’t heard back from the IRS.

We hope the district does receive some grace from the IRS, because that $666,000 would likely be money taken away from students. Just think of the number of teacher salaries that money could cover.

But how could this happen with an army of accountants at APS? With such a huge bureaucracy, it’s downright unfathomable.

Board of Education President David Peercy says he wants the administration to ensure APS doesn’t face massive tax penalties again. The public also deserves such an assurance, just as the IRS deserves its money.

The taxpayers who fund APS have a right to expect better than this.