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Audit of $526M in state tax errors could take months

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It could be months before there are definitive answers on how Indiana lost track of a total of $526 million in taxes, with questions possibly pending well past the November election.

Representatives of the international account firm Deloitte told members of the state budget committee Wednesday they are still developing a plan for what would be audited, saying it could take through the end of August to complete the task.

Gov. Mitch Daniels announced last December that the state lost track of $320 million in corporate tax collections from 2007-2011. And in April, State Budget Director Adam Horst said Indiana owed $206 million to its counties. Three top Indiana revenue officials resigned following the revelations.

The broad strokes of the problem — in both cases, state workers did not properly enter changes in the state's tax collection system — are well-known following an internal review led by Horst. But specifics, such as why the $320 million mistake was not discovered for four years, are still unanswered.

Bari Faudree and Kathi Schwerdtfeger told lawmakers Wednesday that they have been working with other Deloitte auditors over the last few weeks to determine what should be reviewed. Once the assessment is completed, Schwerdtfeger said Deloitte will deliver a "detailed audit plan."

"This is not simply an audit issue, this is not simply an accounting issue, this is hitting a whole variety of other areas," Faudree said of Deloitte's preliminary work.

Asked by Budget Committee Chairman Jeff Espich if she expected the state to adopt their recommendations, Schwerdtfeger said "absolutely."

She said the audit could take "months" after the plan is approved by the panel, but said it was hard to give a specific timeline.

The timing of the audit has already factored into the governor's race. Democratic candidate John Gregg has asked for an expedited audit, while his running mate, state Senate Democratic Leader Vi Simpson, has said the focus on the revenue department is too narrow.

It's unlikely the audit results will be available before the Nov. 6 general election.

While Democrats called repeatedly for an independent audit after the first mistake was discovered in December, it was not until the second mistake was discovered that Republicans signed off on the idea.

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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