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Galloway’s follow up review of New Madrid County finds county making progress after 2020 audit found unpaid payroll taxes cost county taxpayers more than $50K

  

JEFFERSON CITY, Mo. — State Auditor Nicole Galloway released today her follow up review of New Madrid County, located in southeast Missouri. The review was the result of a report issued in December 2020 of a regularly scheduled audit of the county that resulted in a rating of “poor” – the lowest possible. The most significant finding from that audit was that monthly reports and state payroll tax withholdings totaling $382,047 were not received by the state for more than five years, resulting in more than $50,000 in interest costs to the county.

The follow-up review determined the county has corrected the payroll tax problem, improved procedures to help prevent it from happening in the future and has begun implementation of other recommendations in the 2020 audit.

“New Madrid County officials have begun the process of ensuring adequate checks and oversight in their processes so that mistakes like this are less likely to occur in the future,” Auditor Galloway said. “I urge the county to complete the implementation of all of our audit recommendations to give taxpayers confidence in their government.”

Auditors found that lack of oversight over the County Clerk’s payroll duties and records allowed the payroll tax issue to occur and go undetected from 2013 until 2018. The County Clerk indicated his office prepared payments for payroll tax withholdings, but mailed them to an incorrect address. The County Treasurer did not routinely follow up on outstanding checks and 31 outstanding checks totaling $209,945 related to state payroll tax withholdings. By 2019, when the payroll tax issue was resolved, the county had accrued $51,333 in interest charges from the state Department of Revenue (DOR).

In their follow up review, auditors found that the County Clerk is performing documented reviews to ensure state payroll tax withholdings are remitted and monthly reports are filed timely with the DOR. The County Treasurer has implemented procedures to investigate and resolve outstanding checks, and the County Clerk and County Commission are reviewing and signing the monthly bank reconciliations and monthly settlements prepared by the County Treasurer.

The review also determined that some steps have been taken towards implementing recommendations relating to the offices of the Sheriff and the Prosecuting Attorney. Of the 18 audit recommendations reviewed as part of this report, 12 have been implemented or partially implemented, another three are in progress, and three remain not implemented.

A copy of the audit can be found here.