Auditor: Data-entry and vendor errors left Smithville-area seniors underbilled; $272,165 remains to collect

Clay County Auditor Victor Hurlbert told the commission on Thursday that a taxpayer tip led his office to find a typographical error in the 2024 base levy rates used to calculate the senior tax credit created by Senate Bill 190. The mistake affected parcels in the Smithville School District (TCA 11) and created larger-than-intended credits that reduced bills for some seniors.

Hurlbert said the error occurred after the county manually produced tax bills in Excel because the countys tax-collection software could not perform the necessary calculations. The audit found 271 parcels in TCA 11 were affected (1.6% of the 17,114 parcels reviewed). The correct 2024 levy should have produced $1,283,768.78 in charges for the Smithville School District; the county billed $840,064.62, leaving a shortfall to the district of about $443,704.16. Following settlements and some payments, Hurlbert said $272,165.02 remains outstanding.

Why it matters: the county collects taxes on behalf of school districts and other taxing jurisdictions. Hurlbert recommended the county bill the missed amounts; he also said the county can waive penalties and interest where appropriate but does not have clear statutory authority to refuse to collect principal owed to other jurisdictions.

Hurlbert described multiple contributing problems. The 2024 levy rates were manually entered on a per-parcel basis rather than driven from a single formula, multiplying the chance of typographical error. He also said some distributions were misrouted because checks were sent to the banks lockbox instead of processed and matched by county staff; vendor distribution logic compounded reconciliation problems. He gave a high-level estimate that the countys aggregate base charge across the senior tax credit population should have been about $64 million and said the county has already distributed $56,462,085.73 to taxing jurisdictions for 15,683 parcels.

County staff and the collector, Barbara Riley, told commissioners they are meeting weekly with the vendor to test fixes; Riley said the vendor had at one point thought it had a fix but found additional bugs when they ran it internally and pulled it back for further work. The county has also placed a roughly $298,000 payment hold on the vendor in light of outstanding problems, Riley said.

Commission response: several commissioners said they were sympathetic to affected seniors and pressed staff on remedies. Commissioner Lawson urged the county to "eat" the mistake rather than saddle residents, saying the error was caused by county processes and the vendors failure to deliver promised functionality. Other commissioners cautioned that treating taxpayers differently could create legal or fairness issues. An unattributed county official in the discussion cited statutory duty to collect taxes for taxing jurisdictions and said the countys main discretion is whether to waive penalties and interest.

Next steps: staff told the commission an RFP for a new collector software produced five responses and will go to a technology committee review on May 6; commissioners asked the administrator to invite representatives from the current vendor, Ascend, to appear before the commission (in person or by Zoom) and requested regular updates on remediation progress. Auditor Hurlbert said he expects reconciliation and more-complete resolution by June 30 if staff and the vendor can produce the necessary reconciliations for taxing jurisdictions.

Quotes that capture the debate: "This is our mistake. We've got to eat it," Commissioner Lawson said, arguing the county should absorb the harm to taxpayers. Hurlbert summarized the discovery as "a taxpayer tip" that led to review and the identification of an input error in the base levy rates. Collector Barbara Riley said vendor fixes are being tested and "they hope to have it first thing tomorrow" when asked about a near-term patch (staff later reported the vendor pulled a proposed fix after finding bugs).

What remains uncertain: Hurlbert provided parcel counts and dollar totals but called his aggregate estimates high level; he said the remaining outstanding amounts vary parcel by parcel and may be influenced by changes in assessed valuation and other local levies. Commissioners supported inviting the vendor to explain failures, continuing weekly staff-vendor calls, and pursuing a software replacement while completing reconciliation work so taxing jurisdictions receive funds they are owed.