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Indiana issues call for external audit of tax agency

May 17, 2012

Indiana budget leaders are looking for an external auditor to review the state Department of Revenue after workers discovered $526 million in errors in recent months.

The Republican-controlled State Budget Committee is set to meet June 4 to consider the responses, which must be submitted by next Wednesday. Democratic gubernatorial candidate John Gregg called this week on the state to speed up the audit.

Senate Appropriations Committee Chairman Luke Kenley said state lawmakers consulted with state budget director Adam Horst in drawing up the formal request last week.

The audit will aim to find out how the department lost track of $320 million in corporate tax revenue that was collected over four years along with another $205 million in income taxes, said Kenley, a Republican from Noblesville who is a member of the State Budget Committee.

"My understanding is they are moving as fast as they can," he said.

The lawmakers' request says the state needs a company to assess the information technology department at the tax agency and internal financial controls designed to catch errors before they balloon.

The overall review is expected to be a two-step process starting with a risk assessment taking between three weeks and six weeks that will help determine the scope of the audit, followed by the audit itself.

While it's not clear how long the audit will take, political leaders will be watching for results ahead of the Nov. 6 election between Gregg, Republican Mike Pence and Libertarian Rupert Bonehom to replace term-limited GOP Gov. Mitch Daniels

Gregg has been trying to make hay out of the Daniels administration's troubles, bringing textbooks like "Accounting for Dummies" to various news conferences at the Statehouse.

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