State freezes $102K in county tax revenues because of overdue audit

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Until an overdue 2012 year-end audit is submitted to the state, Elbert County's treasurer has been ordered by the state auditor's office to freeze more than $100,000 in tax revenues.

The county did not publicize the information concerning the order from the state, which came to light because of an open records request submitted by county resident Susan Shick.

In an Oct. 21 letter addressed to County Treasurer Rick Pettitt, a representative of the Local Government Audit Division at the Office of the State Auditor states: “This letter is to notify you that Elbert County has not filed an annual audit report with the State Auditor as required by Section 29-1-606 CRS for the year ended December 31, 2012.”

Because of the missed deadline, the letter directs Pettitt to “hold all funds generated pursuant to the taxing authority … until you are notified in writing by this office.”

In a written response, also dated Oct. 21, the treasurer stated: “I have been notified of the delinquent audit status … and will hold all funds generated pursuant to the taxing authority … until further notification from the Office of the State Auditor.”

In the same letter, Pettitt reported “as of this date” his office was withholding a total of $102,486.42.

BOCC chair Robert Rowland characterized the situation as “embarrassing.”

“But we'll get it fixed,” Rowland added. “Our objective has been and continues to be to get this county back on a sound fiscal footing. We need to get our act together and quit doing this.”

When questioned on Oct. 31, Pettitt said the county “has enough money to pay our bills and operate.”

So far, the treasurer added, the order from the state has not impacted the county's day-to-day cash flow. “Making payroll this month will not be a problem,” he said.

The action by the state resulted from the county missing multiple deadlines to submit its year-end audit for 2012.

A similar situation occurred last year when the county also missed repeated deadlines to submit the year-end 2011 audit — and for a period of nearly two months between Oct. 17 and Dec. 11, 2012, more than $117,000 in county property tax revenues were ordered frozen by the state auditor's office.

In addition to the $102,486 currently frozen, the treasurer said all new property tax revenues coming into his office also will have to be held until the state releases him to spend the funds.

Asked if the situation could become a problem, Pettitt said, “It depends on how long it takes to complete the audit and how much more money has to be withheld.”

“Our goal is to finish the (2012) audit by the end of the year,” said Commissioner Kurt Schlegel, which is the time frame Poysti & Adams LLC, an outside accounting firm recently hired by the county, has said it will take to complete the 2012 audit.

During a number of meetings earlier this year with commissioners, Schlegel said that former finance director Stan Wilmer assured the board his staff was “on track” to finish the overdue audit.

“But he (Wilmer) just kept missing deadlines and making more excuses,” Schlegel added. “That's part of the reason he was fired.”

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