A scathing state audit of Spokane County government suggests hundreds of thousands of dollars are being lost through botched property assessments and failure to collect the aquifer-protection fee.
Cash and checks are subject to theft through shoddy record-keeping and the existence of virtually secret bank accounts that violate state law.
“There are some real problems,” said county Commissioner John Roskelley.
The audit covers 1994, but the lack of internal controls that led to the deficiencies still is a problem today, state Auditor Brian Sonntag said.
The 30-page report knocks the county in 10 general areas, most dealing with the assessor’s office. Some of the assessor’s problems were discovered at least two years ago by the county’s own internal auditor, Vicky Dalton, but never were addressed.
“I’m really pleased about the audit, and I’m really pleased that it brought some things to light for us. I was really grateful for that,” Assessor Charlene Cooney said Sunday.
“I just want to do a better job for the people.”
A major problem is segregation, the process in which property is subdivided and sold. There is an “enormous backlog” of segregated property requests, depriving the county of tax revenues, the audit states.
When property is split, its value often shoots up.
The assessor’s office also does not verify that changes made to assessments are accurate. Computer security is so lax that even employees outside the assessor’s office conceivably could alter property values undetected.
And employees authorized to change property values often overstep that authority.
In 1994, commercial appraiser Dick Weber changed the values of 397 properties that were not even assigned to him, the audit states.
Tax exemptions are granted to senior citizens without verification of income, the report continues. And property once owned by the government and then sold to commercial interests has remained tax-exempt, cheating the county of revenues.
In all, $3 billion worth of property - or 23 percent of the county’s total assessed land - is shielded from taxes. But there’s no way to know if it all should be.
“Weak internal controls increase the potential for the occurrence of fraud and undetected accounting errors,” the audit states.
The assessor’s office also is violating state law by not physically inspecting all properties at least once every six years. Annual reassessment valuation notices are not completed and mailed to taxpayers on time, and property owners have no way to know whether their values are fair.
The assessor’s written reply to the audit says all recommendations will be heeded and notes that Cooney asked the state Department of Revenue last year to help get her office in order.
The audit also calls for more cooperation between the assessor and the county treasurer, who collects taxes.
“I was very pleased,” Treasurer Linda Wolverton said of the report. “I feel like they zeroed in on the problems that I have seen for a long time and found the truly big risk areas.”
Outside the assessor’s department, millions of dollars collected by the county lie around for days instead of being deposited.
Bank accounts are created by various departments without the consent or knowledge of the treasurer, a violation of state law. Some checking accounts don’t even specify Spokane County’s name.
When state auditors asked the county for a comprehensive list of bill-collection sites and bank accounts, managers could not provide one.
“The above weaknesses increase the risk of theft,” the audit states.
Wolverton moved last year to address the audit’s preliminary findings on cash controls, but county commissioners have not adopted her recommendations.
County Commission Chairman Phil Harris said that will change.
“If we’re wrong, it’s going to be taken care of,” he said. “I’m going to insist on it. We have got to safeguard the moneys that we’re entrusted to care for by the taxpayers. Maybe this report gives me, if you will, the tool I needed to shake at somebody and say, ‘There, we’ve got to correct it.”’
The audit also found that $62,226 in illegal payouts were made to three planning managers fired last summer. County policy did not allow severance payments at the time, so the payouts were billed as contracts by the Public Works Department.
The fired managers were required to be on call for 90 days in case questions arose. But the money was paid in advance, a violation of state law.
The audit also criticized the Public Works Department for the way it administers the aquifer protection area fee. That fee averages $15 per homeowner and is to be used to protect the region’s major source of drinking water.
But the utilities division does not deposit money upon receipt and holds up to 2,000 checks worth $30,000 daily.
A bundle of aquifer-protection money is not even collected. Homeowners who refuse to pay are not pursued.
As of Dec. 31, 1994, the county was owed nearly $1.3 million in back payments. More than half that was 18 months or more overdue.
The county has agreed to have the treasurer collect the fees and attach them to real estate taxes. Liens would be placed on non-payers’ property. But the county estimates it might have to write off $200,000 incurred by prior homeowners who have moved.
Calls to Public Works Director Dennis Scott were not returned.
The audit is advisory and does not have the force of law, Sonntag said. But repeat violations found to involve fraud can be referred to the attorney general’s office.
, DataTimes MEMO: This sidebar appeared with the story: ASSESSING THE PROBLEMS According a state audit, problems with the Spokane County assessor’s office include: An “enormous backlog” of segregated property requests, depriving the county of tax revenues; Computer security is so lax that even employees outside the assessor’s office conceivably could alter property values; Tax exemptions granted to senior citizens without verification of income; Property once owned by the government, then sold to commercial interests remained tax exempt, costing the county money. The office violates state law by not inspecting all properties at least once every six years.