State Auditor Glen Gainer says more and more municipalities are refusing to pay his office for financial audits that are required by state law.
Gainer told members of the House Finance Committee Tuesday something must be done about noncollectable debt.
“The problem we do have is the entities not paying for their audits,” Gainer said. “And at some point we’re going to have to start doing some withholding of other public funds flowing through those entities.”
State law requires Gainer to audit each municipality in West Virginia once every three years. He says the law caps the cost at $4,000 for Class III and Class IV cities. He says the bills are just being ignored.
“We’re getting into a position where we’re not collecting enough revenue in order to support the audit requirements. We can underwrite and survive on the audit (fees) but this uncollected or bad debt is something that is really beginning to take a toll,” Gainer told the committee.
The debt is listed at about $1 million. Gainer says most of that is because many municipalities haven’t paid.
“By far the largest amount of our uncollected debt is coming from our municipal section,” Gainer said.
Gainer also updated the committee on his office’s fraud unit that began in 2010. Gainer says just last year the unit uncovered $1.6 million in fraud. He says there have been a number of convictions connected with people stealing public money. Gainer says the fraud unit has a difficult job trying to uncover the crimes.
“The ($1.6 million) is a very low, low number,” Gainer said. “That’s what we were able to document to reconstruct those records. Trust me, they burn, shred and destroy everything they can destroy. You have to do a lot of subpoenas to try and recreate those records.”
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Comments
j
if it is a state requirement........then maybe it should cost nothing to the cities
February 19, 2013 at 12:03 pm | Report comment
JT
It is a financial burden to do these audits, $4000 is way over board for the time and effort on these audits. Absolutely the state should pay for them or drastically lower the cost.
February 19, 2013 at 12:16 pm | Report comment
WV Patriot
Publish the list of cities please. And yes, make them pay up or pay penalty. Publish the list next.
February 19, 2013 at 1:34 pm | Report comment
WV Patriot
The audit money payments support a self sustaining program. So until it is changed, the cities owe the bill. Pay the bill so the tax payers don't have to as I'm sure that is next. Pay the delinquent bill!
February 19, 2013 at 1:36 pm | Report comment
WVIRGINIAN FOR LIFE
If the law or process is already established, then the cities need to pay their bill. Until legislation changes the current process, they are delinquent. So how about Metronews obtain a list of cities and amount owed and publish it. The taxpayers have a right to know.
February 19, 2013 at 3:22 pm | Report comment
sam
publish the list and amount they owe....is burnsville wv on the list?
February 19, 2013 at 7:41 pm | Report comment