Missouri State Auditor Nicole Galloway has released an audit report that was conducted regarding the Madison County Collector. The overall result of the audit was a “poor” rating.
The first part of the audit regards missing monies and other questionable deleted transactions. According to the report, between Jan. 1, 2017 and Oct. 31, 2018, monies totaling at least $13,263 were receipted and the transactions were then deleted from the property tax system.
In addition, two other receipts were deleted from the system totaling $1,108 and the said taxes showed as delinquent. Three more deleted transactions totaling $948 were for Kelcey Gresham-Skaggs, the former deputy collector’s personal property taxes, including 2016 taxes that were entered and deleted on two separate occasions.
These issues were brought to light in October 2018 when County Collector Debby Boone was notified by a taxpayer that when he attempted to sell a piece of real estate he was advised that his taxes were delinquent. On Nov. 2, 2018, Boone requested a report from the tax system vendor showing deleted transactions and after review, noticed several items that raised her suspicions at which time she brought her concerns to both the Madison County Commission and Prosecuting Attorney.
Deputy Collector Gresham-Skaggs took leave on Nov. 3, 2018 and voluntarily resigned on Jan. 14.
On Nov. 6, 2018, the Madison County Prosecuting Attorney recommended that the office change its passwords, no longer accept cash, cease deleting any computer transactions, and not to re-hire any of the part-time staff who assisted during the 2017 tax season. The collector and presiding commissioner signed an agreement to abide by these recommendations.
On Nov. 7, Associate Circuit Judge Robin Fulton ordered that the office was not to dispose of any electronic or physical records in the custody of the County Collector’s office and not to accept any cash for any reason.
According to the audit report, when a tax payment is received in the office the receipt of payment is recorded in the tax system and a paid tax receipt is issued to the taxpayer. At the end of the day, cash drawers are counted and reconciled to system reports. Office personnel prepare separate deposit slips for each cash drawer and make deposits at a local bank the following morning. Deleted transactions are not reported on the daily batch reports leaving that money available for possible theft.
The audit reports that between Jan. 1, 2017 and Oct. 31, 2018, 39 personal property transactions and 29 real estate bills were deleted and considered to be “delinquent."
According to the report, 37 of the 39 taxpayers were able to provide receipts showing that their taxes had been paid. Also, 20 personal property and 17 real estate tax bills had been paid and should not have been listed as delinquent. A total of 25 taxpayers have advised that they had paid their taxes in cash.
The audit report also addresses issues with controls and procedures. The report states that the collector has not adequately segregated accounting duties and does not perform supervisory review of detailed accounting and bank records.
The report indicates the collector did not review or approve deleted transactions in the tax reporting system nor did she obtain a report from the computer system’s vendor for review. In addition, the collector’s office does not account for numerical sequence of receipts slip numbers assigned by the tax system or manual receipt slips issued for partial payments.
Furthermore, the audit report cites that the office does not prepare monthly lists of liabilities for the office’s two bank accounts causing liabilities to not reconcile with bank balances. Also, the collector does not adequately monitor tax payment balances in the partial payment account.
The final area of concern in the report involved electronic data security. The audit report states that employees in the office share user identifications and passwords for the property tax system and the office does not store back-up files at an offsite location.
The county collector was able to make responses to the report. First, the collector has established supervisory reviews of all procedures, the county commission reviews the reports weekly, and a monthly distribution report is also reviewed.
Second, the office no longer has the ability to delete any transactions from the tax system but can only make adjustments that can not be deleted making it impossible for receipts to skip numerical sequences.
Third, the collector will continue to reconcile monthly bank statements and will immediately report any discrepancies. Fourth, the collector reports that she has already put in a new measure to track the current balance of each customer.
As for the data security portion of the audit, the county collector said that individual unique user identifications and passwords are provided for each employee and passwords are required to be changed every 90 days. Computers in the office lock after five failed log-in attempts and lock after inactivity of three minutes. In addition, computer data is now being stored offsite by the tax system vendor.
A Missouri State Highway Patrol investigation into any criminal activity involved with the audit period is underway at the request of the Madison County Sheriff's Department. At this time the investigation remains open and therefore, no details of the investigation have yet been released.