AUDIT: TAX COLLECTION, ACCOUNTING PROBLEMS IN COUNTY OFFICE

KING WILLIAM — The full audits from King William County’s financial probes into the Commissioner of the Revenue’s Office and Treasurer’s Office found improper tax collection and shoddy bookkeeping within the departments.

The county initiated a performance review of the revenue office in mid-June when Commissioner of the Revenue Sally Pearson refused to participate in the property reassessment process, a key function of her office, and several residents came forward expressing concerns regarding their assessments.

The county also ordered a performance review on the Treasurer’s Office after it found the department had not collected $2 million in delinquent taxes on 400 properties dating back 30 years.

Finance Director Natasha Joranlien presented the full audit reports to nearly 150 resi

dents, online and in-person, at the Board of Supervisors’ Sept. 28 meeting.

Among the firm’s key findings for the Commissioner of the Revenue’s office:

■ Annual personal property filings are not sent to taxpayers as required by the state.

■ Penalties were not charged on several meals tax accounts and business licenses accounts.

■ The Commissioner of the Revenue’s Office was collecting taxes for the Treasurer’s Office.

■ Newconstruction and improvements to buildings were not added to tax rolls on a timely basis.

The firm’s key findings for the Treasurer’s Office:

■ The treasurer consolidated reconciliations from three accounts on a bimonthly basis in pencil with no formal review.

■ There was a lack of support documentation for wire transfers. ■ All transactions, penalties and interest can be voided by treasurer employees.

■ All treasury employees can issue single signature checks.

■ There are no security cameras to monitor cash registers and all treasury employees have access to the safe.

According to Virginia State Code, every locality must send personal property statements, detailing properties and their value, to taxpayers to confirm that the property is on file. The firm found that the office is not sending out the information.

This could help ensure properties aren’t over or undercharged each year, the audit stated.

The office has not been adding new construction and improvements that residents make to their properties to the tax rolls in a timely manner. As a result, these properties are not being properly taxed.

The firm found that the office was not adding penalties and interest on meals and business license taxes on some businesses.

With limited scope, the firm looked at 11 meals tax receipts. Of those, four receipts did not show a penalty or added late fees. Additionally, some delinquent business license payments had not been assessed, according to the audit.

According to the final audit, there are times the revenue’s office is collecting taxes that are supposed to be collected by the Treasurer’s Office.

The firm stated in the audit that it recommends the Treasurer’s Office collect the taxes directly to ensure proper, secure handling of funds.

“It’s kind of amazing to me that you could release this preliminary audit before it was over,” Treasurer Harry Whitt said Monday. “I’ve looked at the final audit, and I really don’t have any problems with it.”

While most of the preliminary audit findings were upheld in the final audit, there were some points in the first one that were not included in the final version, including that Whitt conducts banking on his personal cellphone.

According to Whitt, he has never used his personal cellphone to conduct county business.

“There has never, ever been a time I did any transactions with my personal phone,” Whitt said.

The audit reported the treasurer handles reconciliations — the process of showing the amount spent matches the amount leaving the accounts — bimonthly in pencil.

According to the final report, Whitt consolidates three accounts when performing reconciliations.

The firm recommends the reconciliations be reviewed by an individual outside of the office to ensure funds are properly maintained and that each bank account is handled separately.

“That’s not a problem, anybody who’s in my office can come look at them,” Whitt said.

Overall, the final audit recommends adequate training within the two offices and proper documentation of procedures.

Pearson and Whitt will decide what to do with the audit’s recommendations.

With Whitt’s Oct. 1 retirement, the Treasurer’s Office will undergo a turnover audit in order to get the office ready for the interim treasurer, who will run the office until after the February special election.

When the new treasurer takes office, the county plans to implement a financial board consisting of one supervisor, one citizen knowledgeable with finances and the treasurer. The board will meet every month to review the Treasurer’s Office, and the treasurer will present financial reports at every board meeting.

To see the full audit, visit bit.ly/3kP4Huq.

Audits ordered

Tassinari ordered performance audits for the Commissioner of the Revenue’s Office and the Treasurer’s Office, a first for the county.

“The board was made aware of the outstanding amount of delinquent taxes, which raised red flags concerning processes and procedures within both the Treasurer’s Office and the Commissioner of the Revenue’s Office,” Chairman of the Board Stephen Greenwood said. “The purpose of this review was to look at operations, internal controls and policies and procedures.”

In mid-September, the firm was preparing to perform a two-day audit on the revenue’s office.

But Pearson announced, nearly six weeks after she declined to participate in the reassessment, that she and her office would not take part in the audit.

Pearson said in an email that the performance audit was a waste of taxpayer dollars and her office’s time and would not allow the auditors into her office, despite County Attorney Andrew McRoberts’ feedback that her refusal ran contrary to state law.

Pearson’s pushback came after the county released a preliminary report on the Treasurer’s Office, which revealed 21 problem areas, including nearly $2 million in uncollected delinquent taxes, multiple bank accounts open at different banks and poor bookkeeping.

At the board’s September meeting, Pearson said she did not participate in the audit because the county is looking to find faults in her office.

“It seemed like it was more of a witch hunt in this case, looking for things to find about our office and after I saw the way the treasurer was treated at the last meeting, I definitely didn’t want those preliminary audit findings reported,” Pearson said. “I think if someone is paid to come in and find something, they’re going to find something.”

Without Pearson’s cooperation, the firm had to alter its information gathering process, pulling information from previous employee interviews from the Treasurer’s Office audit and documents obtained from the Finance Department.