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Indiana hires Deloitte to assess $500M in mistakes

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Indiana's state budget leaders picked international accounting firm Deloitte on Monday to determine the scope of an external audit looking at how the state lost track of more than $500 million in tax revenues.

The five-person State Budget Committee announced its pick during a meeting at Vincennes University, but the terms of the review won't be signed off on until the next budget committee meeting in July.

"Clearly everyone has a desire to start as soon as possible," said state budget director Adam Horst, a member of the committee.

Deloitte now will determine what the audit will cover and most likely will be chosen to conduct the actual work once the parameters are set. Ten companies bid for job.

The review follows the disclosure in December that $320 million in corporate tax money that the Department of Revenue collected over several years hadn't been properly deposited in the state's general fund. State officials then announced in April that $206 million in local income tax revenues had been mishandled and not distributed over the previous 14 months to Indiana counties.

An initial review of the first error by the State Board of Accounts showed that the state lacked the auditing capabilities to have discovered the problem on its own. Since then, Republican legislators agreed to an external audit.

That agreement marked something of a vindication for Democrats, who tried twice during a December budget committee meeting to authorize an external audit but were voted down both times by the three Republican committee members.

State officials intend for the audit to review information technology at the revenue department and the state's overall tax collection system.

Democratic gubernatorial candidate John Gregg has called on the state to speed up the process. But leaders of the budget committee say they are moving as fast as they can.

"This audit is a major undertaking, and one that must be done right," said Republican Rep. Jeff Espich, the committee's chairman. "Time is of the essence, but there is no benefit — only pitfalls — to rushing unnecessarily."

Horst, an appointee of Republican Gov. Mitch Daniels, cautioned at the committee's April meeting that more errors will likely be uncovered but said he wasn't ready to disclose them.

The budget committee, is made up of Horst, two Republican and two Democratic legislators.

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  • He Cooks We Stew
    Gotta leave it to "the Blade" and his merry band of incompetents. They have cooked the books and now the proof is the failed dish they've served up to Hoosiers. We've all had to stew in misery these past few years. Yet another way to force us all into austerity "we don't have the money" when they have "lost" it. No one you won't see these little bites of info in the Blade's next book about what a great financial manager he is.
  • Independent Audit
    I thought they hired Mike Alley to straighten up this mess. Every second or third year, the state ought to have an independent audit of its financials. Take politics out of it. Those who blame Daniels know better, but are just in denial because we are doing well compared to the Democratic states like Illinois, which are broke because of bad fiscal management. He doesn't control compilation of the data.
  • $120 Million Question
    Rockport Decision Could Rest With Department of Revenue

    http://www.insideindianabusiness.com/newsitem.asp?ID=52617
  • Very Tip Of Large Iceburg
    Indiana Department of Revenue Rivals the Ministry of Silly Procedures in Tax Refund Case

    http://taxfoundation.org/blog/indiana-department-revenue-rivals-ministry-silly-procedures-tax-refund-case
  • Conflict of Interest
    Why is the Indiana OMB Director Adam Horst leading an audit of his own work after legislators discovered he has given them false financial statements?

    Why doesn't the elected State Auditor, Tim Berry, demand to take over this independent state audit by international accounting firm Deloitte since he is clearly responsible for the being the legislatures watchdog and his executive branch office exists to avoid this current conflict of interest with Mitch Daniel's OMB Director Adam Horst?
  • Indiana Finance Is Broken
    Take a look at annual audit of the State of Indiana Comprehensive Annual Financial Report (CAFR) which is prepared by the Tim Berry's Office of the Indiana Auditor of State.

    It is obviously factually incorrect with the discovery of massive billion dollar errors and reads more like a political document than a useful report any corporation would demand of it accounting firms audit.

    It does not highlight any computer or financial control problems or errors.

    http://www.in.gov/auditor/2370.htm
  • Chapter 1
    I wonder if this will make it into Daniel's book about great leadership?

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