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Audit Finds Oversight Issues In Collector’s Office

Missouri State Auditor Nicole Galloway released a report on the Crawford County Collector’s office, triggered by Pat Schwent’s resignation in March 2018.

Schwent tendered her resignation February 22, 2018 after it was discovered that she had hired her sister to help prepare 2017 tax statements.

Wenner filed a complaint with the Missouri Ethics Commission. Schwent claimed in her resignation letter that she erred in interpreting the law and left office March 15, 2018.

Deputy Collector Linda Hamilton assumed office and was sworn in April 24, 2018. Schwent was hired as a clerk the day after her resignation. 

Schwent, whose term was expiring in 2018, filed to run again and won handily against Allen Teal in the August 2018 Republican primary.

The audit found that between October 2014 and October 2017, Schwent hired and paid her sister $1,346 as a contract employee to assist with the preparing and mailing of annual tax statements. Article 7, Section 6 of the Missouri Constitution says any public official who names or appoints to public office a relative within the fourth degree must resign.

Property Tax System Controls

Te audit found that “neither the County Clerk nor the County Commission adequately reviews the financial activities of the County Collector.”  

The clerk does not prepare or verify the accuracy of the current or delinquent tax books and did not prepare the land and personal or back tax aggregate abstracts in a timely manner. The clerk and the commission do not adequately review changes entered in the collector’s property tax system and the audit identified discrepancies. 

“The county has not adequately restricted access to the property tax system,” it said.

According to the audit, the 2017 land and personal aggregate abstract was not prepared until June 13, 2018, “although the information needed to prepare this aggregate abstract was available at the beginning of November 2017.”

The 2017 back tax aggregate abstract was not prepared until December 5, 2018 and the 2016 back tax aggregate abstract was not prepared. The information needed to prepare the abstracts were available at the beginning of March 2017 and 2018.

Additions and Abatements

“The county clerk and the county commission do not adequately review changes (e.g., additions and abatements) entered into the county collector’s property tax system” the audit said. Discrepancies were discovered with additions and abatements. The county assessor “initiates changes to the county collector’s property tax system records by importing individual tax record changes from the county assessor’s assessment system to the property tax system.” 

The audit found that the assessor’s office does not provide documentation of those changes so the collector’s office can ensure they are imported correctly into the property tax system.

The audit claims that the commission does not review and approval actual changes. Instead, the assessor submits a monthly report of changes made to the property tax records in the assessment system for the commission’s review. 

“Neither the clerk nor the commission compare the monthly report of changes prepared by the assessment system to the actual changes made in the property tax system,” the report said. “As a result, changes to the amount of taxes the county collector is charged with collecting are not properly monitored and errors or irregularities could go undetected.”

The audit found that in 2018, the assessor’s office processed an addition for a vehicle not previously reported by the taxpayer, “thus increasing the assessed valuation for a taxpayer for tax years 2015, 2016 and 2017.” The vehicle addition for the 2016 tax year did not get imported into the property tax system and 2016 property taxes were not assessed or collected on this vehicle.

Tax System Access

“The county has not adequately restricted access to the property tax system,” the audit found. “The county collector has access rights allowing her to enter additions and abatements into the system.”

The audit found that the collector and her staff “have access to void receipt transactions after they are completed.” The property tax system does not provide a report of transactions deleted and documentation was not always maintained for voided transactions. As a result, there is an creased risk of unsupported or unauthorized changes being made to the property tax system after they are approved for the year. 

Recommendations

In three prior audits, a similar condition to the county’s lack of adequate reviews were noted. Issues with the tax books and tax system access were also noted in previous audits. 

The auditor’s office recommends that the county clerk maintain an account book with the collector and that the clerk and commission use the book to review the accuracy and completeness of the collector’s annual settlements.

The clerk should prepare the current and delinquent tax books, or at a minimum verify the accuracy of the tax books prior to charging the collector with the property tax amounts to be collected. Procedures should be documented.

The clerk should prepare and timely file current and delinquent tax aggregate abstracts with the Department of Revenue and State Tax Commission.

The clerk and commission should ensure changes made to the property tax system are supported by court orders approved by the commission and an independent reconciliation of additions and abatements between the assessor’s system and collector’s property tax system is performed.

The collector should work with the commission to ensure property tax system access is limited to only what is needed for users to perform their job duties and responsibilities.

Response

The commission and clerk’s response was that they “recognize the issues presented by the State Auditor’s report and will give each issue the attention they deem necessary.”

Schwent said in her response that she agrees that access to the property tax system should be limited, but said as long as her office and the assessor’s utilize different systems, the collector’s office “will need access to the assessment module within the property tax system” to ensure adjustments to real and/or personal property records initiated by the assessor’s office have been updated “and/or imported accurately” into the system.

Receipt Controls

The collector “does not account for the numerical sequence of receipt slip numbers assigned by the property tax system.” The cash drawers all share the same sequence of receipt slip numbers” and “no one in the office accounts for the numerical sequence.” The audit states that this allows for “possible manipulation of receipt data.” Schwent said that she has reached out to the programmer to determine the best way to implement the recommendation. 

Tax Maintenance Fund

The audit also found that the collector used $1,000 from the tax maintenance fund to pay for legal fees to represent her in a Missouri Ethics Commission inquiry.

Schwent responded that legal fees related to the issue totaled $2,480 and she personally paid $1,480. Schwent said the other $1,000 “did not have any direct correlation to (her) personal representation.

Schwent also said she reimbursed the fund on January 16, 2019.

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