Shelby County receives "good" rating in new report from Auditor Fitzpatrick

While a mistake made by county officials led to Shelby County levying approximately $188,000 in excess property taxes, a new report from State Auditor Scott Fitzpatrick finds the county is otherwise well managed and on track to implement recommendations made by his office. The audit report gives the county a "good" rating, which is the same rating the county received from its last performance audit in 2017.

"The fact the county levied excess property taxes is unacceptable and unfair to taxpayers, but I'm glad to see county officials are willing to correct their mistake and make sure it does not happen again," said Auditor Fitzpatrick. "The other issues uncovered by the audit are less severe but still need to be corrected so taxpayers can be assured the county is operating accountably and transparently. The recommendations we have given county officials give them a roadmap to improve the effectiveness and efficiency of their government. Now it is on them to follow through and adopt the recommendations."

The report found that for the 2023 tax year the county incorrectly reported its property tax levy reduction as a voluntary reduction instead of a sales tax reduction. As a result, the county did not take a sales tax reduction in 2023 and levied approximately $188,000 in excess property taxes for 2023 through 2024. Additionally, the County Clerk was unaware the 2023 reduction was incorrectly reported as a voluntary reduction and the County Commission indicated it is confused by tax levies and certified at a higher reduction rate than calculated.

The County Commission also failed to have proper budgeting procedures in place as it did not monitor budget-to-actual receipts and disbursements. For the year ended December 31, 2024, actual disbursements exceeded budgeted disbursements for 4 different funds by a total of $51,878. The County Commission did not prepare or approve budget amendments before the budgets for these funds were overspent.

Other findings in the report include a failure by the Sheriff's Office to charge sales tax on the sale of e-cigarettes and nicotine pouches sold to inmates, a mid-term salary increase to the Sheriff totaling $28,864 that violates constitutional provisions and state law, and the lack of a records management and retention policy that includes electronic communication.

You can read the complete report here.