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Audit committee warned of long-running reconciliation gaps in county tax system; IT to produce reports
Summary
The county auditor told the Davis County Audit Committee Sept. 19 that unreconciled differences among CoreTax, bank records and the general ledger have produced parked receipts dating to 02/2006, inconsistent monthly distributions and at least one double distribution; staff and IT will stabilize the error and report back in November.
Curtis of the auditor's office told the Audit Committee on Sept. 19 that Davis County faces a persistent reconciliation problem among three systems: the tax system (CoreTax), the county's bank records (Wells Fargo) and the general ledger (Munoz). "We have a three-legged stool: CoreTax, the bank and the general ledger," Curtis said, arguing the systems must be reconciled to produce accurate monthly distributions to taxing entities.
Curtis described several concrete issues he said staff found when running new reports: long-standing "parked receipts," including at least one entry back to "02/2006," inconsistent month-to-month variance (he cited an example mismatch of about $174,000 when comparing July and August), and at least one double distribution that credited both the health department and cities. "We have an infinite money loop," Curtis said, explaining that continuous incoming payments can mask cumulative distribution errors.
Committee members and other participants pressed on operational fixes. Multiple speakers recommended daily reconciliation of receipts to bank deposits rather than waiting until month-end; Tracy said that daily checks of deposits against CoreTax receipts are standard practice in comparable operations. Curtis said the county's programmers and IT staff are developing reports that will show CoreTax balances and allow daily reconciliation; he said the auditor's office will work with IT and the treasurer's office to stabilize a consistent error amount before the committee determines corrective steps.
Curtis recommended two policy changes: separate the tax receipt system from escrow/banking to avoid commingling, and follow state statute by distributing amounts received in the prior month (instead of shorting distributions across the year). He warned that until there is a stabilized error amount, it is unclear whether past distributions were net overpayments or underpayments to taxing entities; he said last year there were about $640,000 that could not be accounted for and were distributed on a percentage basis.
The committee asked for concrete follow-up. Chair Lorraine Kamalu offered to observe working sessions; Curtis said he would notify the committee when the IT-driven reports provide a stabilized error range, and he committed to report back at the committee's next regular meeting on Nov. 4, 2024. Several members stressed that the treasurer's office should be prepared to implement daily reconciliation practices effective Jan. 1 so the county starts the new calendar year with ongoing daily controls in place.
The committee did not take a formal vote on policy changes at the Sept. 19 meeting; members directed staff to continue the IT work, provide a stabilization report and return with recommendations.
