Forensic audit continues in Madison as city cuts deal with IRS

MADISON, W.Va.¬†—¬†State Auditor J.B. McCuskey confirmed Friday his office’s fraud unit has been investigating the finances of the Boone County town of Madison since last August through a forensic audit.

State Auditor J.B. McCuskey

The Coal Valley News reported Friday the town owes several hundreds of thousands of dollars in back taxes and that the city has cut a lump sum payment in a deal with the IRS totaling $230,000. MetroNews has learned McCuskey’s financial fraud unit investigation is a separate but related probe.

McCuskey said the situation in Madison is not unlike what’s happened in some other small towns in West Virginia as revenues have decreased but the cost of city services has increased.

“My office is proactively seeking solutions to the financial problems facing our municipalities through legislative action,” McCuskey told MetroNews Friday afternoon. “We will use technological advancements to monitor the cities fiscal health in real time to ensure we can find problems when they are small and solve them before they are catastrophes.”

McCuskey had a similar message for members of the House Finance Committee during his budget presentation Friday morning. He said his office will introduce two bills with the support of the West Virginia Municipal League.

“This will enable cities to monitor themselves, place themselves on a fiscal watch list and gives us the ability to help them in any way possible to overcome these transparency issues,” McCuskey told lawmakers.

McCuskey’s office already operates “Project Mountaineer” which is an overarching program.

“It uses these transparency sites for us to create a real-time auditing system,” McCuskey told the committee. “This will give a digital window into their finances in real-time so we’re not seeing the issues four years later but two days later or three days later.”

McCuskey’s fraud unit has been momentum behind criminal charges in a few other towns in recent years. It’s work in Madison has not yet been completed. The goal of a forensic audit is to find out where the money has gone and who is responsible.

Madison has suffered a significant drop in revenue in recent years mainly because of the reduction of coal severance tax funds.

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