FLINT TWP. — An employee in the Flint Township Treasurer’s Office has resigned over a failure to capture and pay taxes on time to three township taxing authorities, according to Treasurer Lisa R. Anderson.
Auditing firm Plante & Moran presented its audit findings at the July 1 Board of Trustees meeting, where auditing partner Pam Hill explained taxes for the Downtown Development Authority and the two Corridor Improvement Authorities created in 2018 had not been captured and paid on time, as is required by state law.
The board held a special meeting July 9 where it voted 4 to 1 to authorize legal counsel to prepare a notice of termination of an employee and to negotiate extension of health care insurance through July 31, 2019, to permit health coverage during the employee’s preplanned medical leave. Anderson voted against firing the employee.
“I know people do make mistakes,” Anderson said. “More than one person dealt with this, and it was just an oversight. When we talked with the county, they said it was a normal oversight that happens when you set up a new DDA. It’s just a piece of the puzzle that gets overlooked.”
Anderson said the employee was informed that the board was moving to fire her, and she was given the opportunity to resign.
During the Plante & Moran audit presentation, Hill referred to a June 13 letter to the board identifying weaknesses in internal control-related issues found during the audit. The letter stated that during 2018, the township established a downtown development authority (DDA) and two corridor improvement authorities (CIAs). It was determined that property tax revenue would be generated through tax increment financing (TIF) captures and paid to the three authorities.
Anderson said the township learned before the audit that the DDA’s and CIAs’ tax revenue for the summer and winter 2018 taxes had not been captured. As a result, other taxing entities received too much money, and the township had to work with the county to call back the amounts that were overpaid.
The letter went on to state the DDA and CIAs did not receive their money during fiscal year 2018. The summer 2018 tax revenue should have been paid to the DDA and CIAs in the summer/ fall of 2018. Most of the winter 2018 tax collection should have been remitted to the authorities by March 2019, but as of the June 13 letter, they still had not been paid. The letter noted that according to state law, all taxes collected by the treasurer’s office must be remitted to the taxing authorities in the correct amount and within 10 to 15 days of being collected.
Anderson said no one from the DDA or CIAs questioned why they hadn’t received the money because they had been given loans by the township in order to operate during the first year.
“The township actually loaned them upfront money to be able to work from,” she said. “In the first year, it wasn’t going to be a huge amount collected. That’s another reason it slipped through the cracks. They were aware, and the county recommended the process to settle up all accounts to keep it a little easier.”
Anderson said the July 1 to Sept. 15, 2018, period was when the taxes weren’t collected, and the township started to collect them during the winter tax season. She said the employee who resigned was on leave part of that time, and someone was filling in for her, so Plante & Moran had to determine when the errors were made. The firm also worked with the township to determine the amounts other taxing entities were overpaid and to help put a new system in place to ensure such a mistake doesn’t happen again.
“The good news is, as of now, the township worked with the county and everything was squared away by the end of the fiscal year in terms of who’s owed what and making sure everybody ended up with the right pot of money they were supposed to end up with,” Hill said at the July 1 meeting. “The township also has implemented new processes and procedures, which I think are being tested right now as the July tax roll heads out. We’re hopeful that with these new processes and procedures going forward this won’t happen again. But there were definitely some issues with the tax collection and remittance process.”
Anderson said she has not seen a final bill from Plante & Moran, but the extra work required to reconcile the tax errors cost the township an additional $8,000. At the July 9 special meeting, the board voted to have legal counsel request a final bill for all the work. Anderson said this was done because the township needs to know the final full amount in order to make amendments to the budget.