State Auditor Mike Harmon released the audit of the 2021 Sheriff’s Tax Settlement for former Caldwell County Sheriff Stan Hudson that included one finding.
According to Harmon’s office, the former Caldwell County Sheriff’s tax settlement that was presented and approved by the fiscal court was not a complete and accurate reporting of the taxes collected and disbursed as of June 30, 2022, which was the former sheriff’s last day in office. The audit found that the former sheriff’s tax settlement misclassified gas franchise taxes of $257,602 as gas property. This reportedly caused property tax collections to be overstated and franchise taxes to be understated by the same amount. Additionally, auditors said May 2022 franchise collections totaling $282,851 and the corresponding tax payments to districts of $266,163 were omitted from the former sheriff’s tax settlement.
The auditors say, according to the bookkeeper, the sheriff’s office was unaware of how to handle the franchises collected by the sheriff before to his retirement. Due to the errors above, the former sheriff’s tax settlement gave an inaccurate accounting of the taxes collected and remitted to the districts.
Harmon’s office recommended the Caldwell County Sheriff’s Office review future tax settlements to ensure the settlement is complete and accurate, including franchise taxes collected and taxes paid, before being submitted for approval.
In former Sheriff Hudson’s response to the finding, he said the material adjustments being required for this audit were due to, historically, no franchise bills being collected in the timeframe and past settlements being settled through May; therefore the “final” settlement for the outgoing sheriff was conducted in the same manner. He went on to say the sheriff’s office was unaware the auditing standards are changed with practices and has made immediate note of this change. He also noted that while the wording was misstated, the funds were deposited and dispersed from the correct accounts. As this was the first year having an outgoing sheriff settlement, Hudson stated notations for future settlements have been noted to ensure no material adjustments will need to be made to future settlements.
The auditor’s reply explained that there were no changes in auditing standards that affected the former sheriff’s tax settlement. According to the auditor, franchise taxes were erroneously reported as property taxes and the omission of May 2022 franchise taxes collected and remitted by the former sheriff’s office caused the former sheriff’s final tax settlement to be materially misstated.
