North County Times
February 4, 2010
EXCLUSIVE: Tax collector still lags in paying refunds
By Mark Walker
Dan McAllister vows changes being implemented to correct years-old problem
The San Diego County Treasurer-Tax Collector’s office continues to take in millions of dollars more in property taxes than is owed and then lags in returning the money to taxpayers, according to a 2009 audit.
The examination of the treasurer’s property tax refund account concluded that nearly $8 million needed to be refunded or funneled to the county’s general fund if the person or entity who was owed the money could not be located.
It’s been a problem that stretches back to 2003 and has dragged on, despite a series of examinations in the years since.
The most recent independent audit, conducted over nine months by the firm of Kessler International, found a variety of problems in how the treasurer’s office manages what is known as the Property Tax Trust and Refund account.
That report was issued in March but never shared with the public.
Dan McAllister, the county’s nonpartisan treasurer-tax collector who is running unopposed for re-election this year, said Thursday that 34 of 35 recommendations stemming from that audit, three other audits, and a 2005 county grand jury examination have been implemented.
Of those, 12 weren’t instituted until August. The final recommendation should be in place by the end of the month, McAllister said.
“There’s no question that we have established and strengthened our policies to make sure people get their money back,” McAllister told the North County Times. “The message should be real clear that the goal from all of these audits is that we have nothing to hide.”
Compliance to be checked
McAllister also asked county Auditor and Controller Tracy Sandoval on Thursday to conduct an assessment to verify that his department has complied with all the various audit and report recommendations.
He also asked Sandoval to make sure that appropriate measures are in place so that refund amounts are accurate and that his workers are “taking the appropriate actions to reunite possible refunds with the taxpayers of record.”
“We want to make sure taxpayers get back every dime they are owed,” McAllister said.
Sandoval said her office will conduct the review and would have done so even without the request.
“We think they are making pretty good progress toward taking care of the issues,” she said.
McAllister said of the approximately $8 million identified as owed in the Kessler audit, that number has since been reduced to about $6.9 million.
McAllister said that reasons the money piles up include people mistakenly overpaying their taxes or paying them twice, and because the tax bill is often reduced through appeal or reassessment.
The treasurer-tax collector is responsible for collecting more than $4 billion annually in property taxes.
That means the $6.9 million in current overpaid taxes makes up less than two-tenths of 1 percent of all the tax collected.
Last year, the county processed about 225,000 property tax appeals and agreed to lower about 216,000, McAllister said.
The county sent out about 981,000 tax bills this year.
By state law, the county has four years to try to identify and locate anyone who is owed a refund. After that, the money is diverted to the county’s general fund.
Supervisor Bill Horn said he spoke with McAllister on Wednesday and asked that he extend the four-year deadline for refunding money.
“I think a little grace should be extended to people who haven’t been notified because there is some kind of glitch in the system,” said Horn, whose supervisory district includes much of North County.
But McAllister said state law mandates that the money be transferred to the general fund.
In its executive summary, Kessler auditors said they found many “discrepancies, irregularities and user errors” that included the deletion of data.
That deletion, their report said, was an indication that fraud may have occurred.
Current and former employees of the department told auditors that lack of management oversight and failure to follow proper procedures may contribute to the refund problems.
The audit also found that the treasurer’s office had problems in converting its database to a new system and that at least one employee had forged a check in his or her own name.
That worker is no longer with the county and was referred to the district attorney’s office for prosecution, McAllister said. He was not certain of the outcome of that case.
The issues identified in the Kessler audit are akin to those disclosed in a 2003 audit.
That report was followed by a 2005 county grand jury examination that concluded tax collectors had taken in $8.59 million in overpaid taxes and had inadequate policies to return the money.
Jim Vlassis, who served as the foreman on the 2005 grand jury, said Thursday that he was surprised the problem persists.
“When Dan met with us then, he recognized there were problems and was planning changes to rectify them. We were impressed with his response, so I am really surprised that this continues,” Vlassis said. “I just don’t understand why they can’t send the money back.”
The audits conducted since the 2005 grand jury report have been treated as internal documents and not generally shared with the public, McAllister acknowledged.
He urged taxpayers who believe they are owed money to contact his office or see its Web site at www.sdtreastax.com.