Nye County approves focused audit of transient lodging taxes after Tonopah waiver allegations

Nye County commissioners voted to authorize a focused audit into transient lodging tax collection and the handling of late fees and penalties, approving a contract with auditor Dan McArthur in a not-to-exceed amount of $29,800. The motion passed 4-0 with one abstention.

The audit will review all components of Nye County's transient lodging system (towns and unincorporated areas including Amargosa, Beatty, Gabbs, Manhattan, Round Mountain, Pahrump, and Tonopah) to determine whether late penalties and interest were assessed, waived, recorded and remitted correctly. County staff said the request follows a treasurer notification and a sheriff's-office request for an investigation.

The item drew sustained public attention after Tonopah residents and activists alleged that the county treasurer's office allowed independent waivers of penalties and interest over a multi-year period. Karen Waldman told the commission she was "recently made aware of missing monies in the town of Tonopah" and has submitted a letter for the public record asking the sheriff and district attorney to "guarantee that a full investigation into this matter is done and prosecute all criminal actions regardless of the status, employment, or position of anyone involved." Mary Ann Hollis urged a forensic audit and documented history of the decisions to waive penalties.

Assistant county staff explained the timing: the county's regular fiscal audit work had priority and the focused engagement was scoped once staff could schedule the specialized review. The engagement letter on the agenda names Dan McArthur as the auditor and sets a not-to-exceed cap of $29,800 for the focused procedures; staff corrected an earlier posted amount during the discussion.

Members of the public asked for specifics about the audit scope and data access. Questions included whether the audit will examine treasurer and staff correspondence, whether late-fee and penalty amounts will be separately tracked, whether reports or supporting invoices will be made public, and whether the audit will produce a roadmap for restitution if funds are found missing. County staff said the audit will examine all components and that supporting records are large but should be made available on request; commissioners directed staff to ensure appropriate public access consistent with redaction requirements.

The board recorded the vote as 4 in favor, 0 opposed, and 1 abstention. Staff said any findings that suggest potential criminal conduct would be forwarded to the district attorney and sheriff for further action.

Next steps: the auditor is to begin the focused review as scoped, produce a report to the board when complete, and staff will provide information to the public about how to request supporting documentation and any follow-up timeline.