A forensic accountant who has focused on explaining a $600,000 shortfall that came up during an audit of the Madison County Tax Collector’s Office for the fiscal year that ended Sept. 30, 2021, provided the Madison County Board of Supervisors an update about her work.
There was no missing cash, said Stephanie B. Smith, a certified public accountant and partner with GranthamPoole, one of Mississippi’s largest regional accounting firms.
“Interlocal agreements with cities were not being handled correctly and that caused this shortfall in cash,” she said during the Jan. 18 board meeting. “There was no missing cash.”
Former Madison County Tax Collector Kay Pace and the supervisors retained GranthamPoole to provide forensic accounting services related to the audit findings for the fiscal year ending Sept. 30, 2021. Pace initiated the audit because the law required it before her retirement in 2023.
The cities of Madison, Ridgeland and Canton have interlocal agreements with Madison County on ad valorem tax settlements.
Smith reviewed the operations, receipts and disbursements for the three locations of the Madison County Tax Collector (Canton, Madison and Flora) and issued a report in November 2023 about her findings and recommendations for improvements for the operations of the office.
The report indicated that “the responsibilities of the office have grown significantly during the last 10 years but the attention to detail has not.”
A number of employees were interviewed, according to the report, which found them to be “helpful, customer oriented, and loyal, possessing a wealth of institutional knowledge about the tax collector’s office.”
Smith, who went over the findings with the board during the December 2023 meeting, reiterated them during the Jan. 18 meeting.
“The second thing I addressed was the state of the accounting in the tax collector’s office,” Smith said in reference to what she told the board in December.
“The bank accounts had not been reconciled in months, months. The cash journals, which tie to the bank accounts, were not posted timely. The system used was subject to errors, many adjustments.”
Smith uncovered hundreds of refunds that should have been issued.
“Several hundred (refunds) went out in November and December,” she said. “Part of what I’m to do in the next two weeks is to verify that every refund has been issued. I’ve been told that, but I have not verified that.”
Smith recommended the tax collector’s office consider using an accounting service for the cash disbursements journal and the bank reconciliation process.
She also recommended that one person be designated as the refund processor with the goal of issuing refunds within 30 days of a taxpayer overpayment.
Smith said that she has met with C.J. Garavelli, the current Madison County tax collector, several times.
Garavelli told the board that “Stephanie and GranthamPoole will hold us in place until we get the right people in place.”
