Missing Bills Pointed to Bigger Problems

       A review of procedures in the East Hampton Town tax receiver’s office after a chaotic property tax bill season revealed that not only had nearly a quarter of the town’s tax bills never been printed and mailed, but that many tax payments sent to the office sat for two weeks in bins of unopened mail, neither logged nor deposited.

       In one case, a $3.8 million check from a mortgage clearinghouse for taxes on numerous properties remained in a FedEx envelope for three weeks, Charlene Kagel, the town’s chief auditor, told the town board this week.

       It was only after landowners began calling as the deadline for payment without penalty approached that the town realized that more than 5,000 of its approximately 23,000 2013-14 tax bills had not even been printed late last year.

       The original Jan. 10 deadline for payment of the first half of 2013-14 taxes was ultimately extended until Jan. 30. The second half is due by the end of May.

       This is the second year in a row that scores of residents have complained of not receiving their tax bills, even as the deadline approached. Their calls and emails deluged staffers, causing delays not only in providing bills but also in depositing payments that had been made.

       The remittances languished well beyond the three business days the town is given under state law to deposit residents’ checks.

       The situation was only exacerbated by the need to respond to the numerous complaints, until Ms. Kagel and other town staffers were sent in to take matters in hand. Neide Valeira, another town accountant, was appointed interim tax receiver on Jan. 14, and the next week, Monica Rottach, who had been the tax receiver, was granted a leave from her job under the Family Medical Leave Act.

       A glitch in the software used to sort and print the property tax bills resulted in several hundred of each batch failing to print, Ms. Kagel said at a board work session on Tuesday.

       Then, a lack of oversight and controls resulted in the errors going unnoticed, Ms. Kagel said. “There are multiple ways that you can check,” she said, including reviewing a computer report, tallying the letterhead and envelopes used, and checking the pieces of mail sent out under the town’s bulk mailing permit.

       Another problem that arose during tax season, Ms. Kagel said — this one prompting 600 or 700 calls from property owners looking for their tax bills — was a nine-month delay in entering data about new owners after a property sale took place.

       An account overdraft prompted an internal audit of the tax receiver’s office in October. Three problems unrelated to the tax bill issues were identified in the October review, conducted by the town’s in-house auditors along with Nawrocki Smith, an outside auditing firm, Ms. Kagel said yesterday.

       Two recommendations were made surrounding the procedures being used to reconcile accounts on the town’s computerized system, including one requiring that daily accounting take place.

       Another issue was the acceptance by the tax receiver of signed blank checks from taxpayers expecting to be out of town when tax bills were prepared. They were kept in a safe at the tax receiver’s office, which was opened at various times of the day, and were to be filled out with the proper amounts as payments became due.

       That practice was to have been stopped, Ms. Kagel said. The audit results were presented last fall to the former town board in an executive session called, she said, because personnel issues were involved. The board asked that the auditors perform a routine follow-up and re-check the practices followed by the department in six months.

       But when tax season arrived, Len Bernard, the town budget officer and head of the Division of Finance, said yesterday, “everything sort of snowballed and dominoed.” The audit team, headed by Ms. Kagel and other town accountants, was sent back to the tax receiver’s office on Jan. 6, along with other staff.

       “We’re going to get this straight,” Town Supervisor Larry Cantwell said Tuesday, “to ensure this does not happen again.”

       He recommended increased training for town staff across the board on the Govern software program, which is used for multiple purposes. Ms. Kagel suggested that the board look into creating a way for property owners to access and pay their tax bills online.

       Mr. Cantwell took pains to thank Ms. Valeira for her work. “You stepped right in,” he said to her. “You worked six or seven days a week doing that, and I just want to applaud you for your effort.”

       The “personnel aspects” of Ms. Kagel’s report to the town board were to be presented in an executive session following the open portion of Tuesday’s meeting.