Losing Track: Accounting Problems Dog Arkansas Cities, Agencies

by Kate Knable  on Monday, Jun. 11, 2012 12:00 am  

Bruce Engstrom, a state lottery commissioner and partner in accounting firm EGP PLLC of North Little Rock, says accounting errors by cities and state agencies are caused by a breakdown of oversight and controls. (Photo by Hannah Pfeiffer)

June Barron, the state’s deputy legislative auditor for cities and counties, said mistakes at the city level often reflect ignorance of state Municipal Accounting Law.

Cities or towns fail to reconcile bank accounts, don’t maintain invoices for disbursements and don’t keep current records of assets, she said.

Not all errors result in penalties, but failing to remit payroll taxes or paying late does cost.  “They become very expensive once the IRS tacks on the penalties and interest,” Barron said.

Blytheville found that out the hard way. It didn’t file forms correctly and didn’t pay payroll taxes in 2009 and much of 2010 and ended up owing $2.3 million in unpaid taxes plus $1.4 million in interest and penalties, Barron said.

That’s nearly $240 for each of Blytheville’s 15,620 residents.

 

 

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