Indiana panel set to start review of $205M tax error

Back to TopCommentsE-mailPrintBookmark and Share

A leading legislator said he expects the State Budget Committee to take some time reviewing a second computer programming mistake made by the Indiana Department of Revenue that short-changed local governments by about $205 million.

Senate Appropriations Committee Chairman Luke Kenley said he didn't anticipate immediate action during Friday's budget committing meeting and that the panel would seek more information about the error disclosed last week and another mistake found in December where the state had lost track of $320 million in corporate tax revenue.

"The question is whether this is indicative of a deeper technology problem, or a deeper audit problem. Or is it the result of a management issue?" Kenley, R-Noblesville, told The Indianapolis Star. "Until we found out the answers to those questions, I'm not sure how far we want to go."

The revenue department's commissioner and two top deputies resigned or retired following disclosure that the $205 million in local income tax money had been mishandled and not distributed over the past 14 months. The state is sending that money with interest to the 91 of Indiana's 92 counties with local income taxes.

The budget committee already had been scheduled to hear a report from the State Board of Accounts on a mistake the Department of Revenue acknowledged in December. In that case, an unrelated programming error left $320 million in corporate tax that had been collected over several years but not properly deposited in the state's general fund.

After the second mistake, Republican Gov. Mitch Daniels' administration and GOP legislative leaders said an outside audit was necessary.

But State Budget Director Adam Horst said that hiring the auditor now would be premature, before state officials had a chance to answer questions from the budget committee.

The committee, made up of four legislators and Horst, is to meet at the Ivy Tech Community College campus in Madison.


  • No Confidence in State Finances
    "The question is whether this is indicative of a deeper technology problem, or a deeper audit problem. Or is it the result of a management issue?" Kenley, R-Noblesville, told The Indianapolis Star. "Until we found out the answers to those questions, I'm not sure how far we want to go."

    Isn't that what an audit determines?

    Clearly the state finances are completely out of control and the checks and balances system is broken.

    The true question is who conducts this outside audit.

    Doubt the State Board of Accounts is up to the task considered they have not uncovered either of these massive errors.

    Perhaps a private firm with legal consequences for inaccuracy like non-partisan Big Four Firms, Deloitte & Touche, Ernst & Young,Pricewaterhouse Coopers, or KPMG.

    Half a billion dollars of errors typically results in someone going to jail.

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. The $104K to CRC would go toward debts service on $486M of existing debt they already have from other things outside this project. Keystone buys the bonds for 3.8M from CRC, and CRC in turn pays for the parking and site work, and some time later CRC buys them back (with interest) from the projected annual property tax revenue from the entire TIF district (est. $415K / yr. from just this property, plus more from all the other property in the TIF district), which in theory would be about a 10-year term, give-or-take. CRC is basically betting on the future, that property values will increase, driving up the tax revenue to the limit of the annual increase cap on commercial property (I think that's 3%). It should be noted that Keystone can't print money (unlike the Federal Treasury) so commercial property tax can only come from consumers, in this case the apartment renters and consumers of the goods and services offered by the ground floor retailers, and employees in the form of lower non-mandatory compensation items, such as bonuses, benefits, 401K match, etc.

  2. $3B would hurt Lilly's bottom line if there were no insurance or Indemnity Agreement, but there is no way that large an award will be upheld on appeal. What's surprising is that the trial judge refused to reduce it. She must have thought there was evidence of a flagrant, unconscionable coverup and wanted to send a message.

  3. As a self-employed individual, I always saw outrageous price increases every year in a health insurance plan with preexisting condition costs -- something most employed groups never had to worry about. With spouse, I saw ALL Indiana "free market answer" plans' premiums raise 25%-45% each year.

  4. It's not who you chose to build it's how they build it. Architects and engineers decide how and what to use to build. builders just do the work. Architects & engineers still think the tarp over the escalators out at airport will hold for third time when it snows, ice storms.

  5. http://www.abcactionnews.com/news/duke-energy-customers-angry-about-money-for-nothing