Forensic accountant hired to look into $600K discrepancy in Madison Co. Tax Collector’s Office

Madison Co. Board of Supervisors
Madison Co. Board of Supervisors(Madison County)
Published: Jul. 3, 2023 at 12:24 PM CDT
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MADISON CO., Miss. (WLBT) - A forensic accountant will help the county get to the bottom of a $600,000 bookkeeping discrepancy in the Madison County Tax Collector’s Office.

On Monday, the board of supervisors approved an open-ended agreement with GranthamPoole PLLC to provide forensic auditing services related to findings found in the 2021 audit.

The measure was approved on a unanimous vote and comes about a month after the county administrator first presented the discrepancy to the board.

“This is very important for us to get started and get this resolved,” said Board President Gerald Steen. “I know, Ms. Pace, [it’s] very important to her as well, because there are some numbers there that are very disturbing.”

Tax Collector Kay Pace introduced the accountant to board members but did not offer specifics about what happened.

“I have a spreadsheet in my office for my bookkeeping,” she said. “It gives every little detail... every little detail, and the money that’s deposited and the way that it’s distributed.”

Pace, who is not seeking reelection, told supervisors she’s required to have the books audited before she steps down.

“The law requires that I bring in an auditor before I resign completely on December the 31st,” she said. “And I have to have those books audited for the county of Madison and let them know that everything is OK.”

Supervisors had several questions about the agreement, including the fact that there was no set time for the contract to wrap up. They also questioned how much the contract would cost the county overall.

GranthamPoole is charging $140 an hour for each staff member working on the project and $350 an hour for each partner.

Stephanie Smith, a partner with GranthamPoole, said it’s too early to know the overall cost, but said she could provide an estimate to the board in the next 30 days.

“The first 10 hours probably would just be me because I’ve got to get my hands in there and look at the processes and things like that,” she said. “But then, we’ve got a good bit of bench depth and I think I can bring in some staff people to help.”

County Administrator Greg Higginbotham first reported the bookkeeping issue in June. The discrepancy was discovered by the county’s contract auditor, Bridgers, Goodman, Baird, and Clarke, PLLC, and dates back to at least 2017.

“During the cash count, the auditor was unable to tie the reported numbers from the tax collector to the source documents provided, which draws into question the accuracy of the amounts settled by the collector to the county and other external entities,” Higginbotham said.

He told the board the findings will result in the county receiving a “qualified opinion” from the Mississippi State Auditor’s Office, which could mean higher interest rates when the county borrows money.

Three types of opinions are issued by the auditor’s office, including “qualified” opinions, which mean “the financial statements may contain material misstatements or omissions,” Higginbotham said previously.

He said this is the first time, based on his knowledge, the county has received a qualified opinion for an entire county department.

“There is an argument that it should have been found sooner. It’s something we’re looking into to see why it wasn’t,” he said.

For her part, Smith says she’s going to review the tax collector’s books month by month to find out where the discrepancy originated.

“In its purest form, a tax collector’s office is a revenue-neutral entity. What comes in is dispersed out,” she said. “There are timing differences, but those should be able to be accounted for. And so, if we just kind of go month-by-month for a while to find this discrepancy... I think we’ll be able to narrow it down.”

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