Ex-manager blamed for errorsPublished 12:09am Friday, October 5, 2012
VIDALIA — A federal tax lien against the City of Vidalia was released Thursday after the city used funds from two certificate of deposits to correct mistakes Mayor Hyram Copeland said were caused by former City Manager Ken Walker.
The charges due to the Internal Revenue Service totaling $635,412.76, were a result of a series of financial errors on the part of Walker that continued to gain interest and penalties over nearly six years, Copeland said.“I had an employee who did not do his job,” Copeland said. “Ken made some financial mistakes that I didn’t know about, and my staff didn’t know about until the IRS lady came in and told us about it.
“Ken Walker left one week, and she was there the next week.”
Walker, whose last day was Sept. 18, said Thursday evening that all comments on the situation should come from Copeland.
“I would prefer that any questions be answered by the city,” said Walker, who is now the city planner in Sultan, Wash. On Monday, Walker answered questions from The Natchez Democrat about any potential fault of his that could have led to the situation involving the IRS and the city.
“I knew that I would be blamed for all the problems of the city,” Walker said on Monday. “Quite frankly, that doesn’t surprise me.
“I will say in good conscience that if that’s what they’re implying, that’s incorrect.”
On Thursday, Walker briefly stated that The Democrat “misunderstood” his comments and, again, directed all comments to the city and Copeland.
The Concordia Sentinel reported Wednesday that Walker said he had been “trying to work through the tax matter with the IRS prior to his departure” and took “full responsibility.”
Walker would not answer questions about the discrepancy in comments Thursday night.
The unpaid payroll taxes included amounts withheld from employee paychecks beginning in 2006 and continuing sporadically until 2012 for income taxes, Social Security and Medicare.
Despite a notice of federal tax lien being filed at the Concordia Parish Clerk of Court’s office on Sept. 18, Copeland said he remained unaware of any unpaid balances to the IRS until last Thursday. “Nobody called me from the courthouse, so I didn’t know about the notice or anything until that lady walked into my office and went over the details,” Copeland said. “I am responsible for any action of any employee that is employed with the city, but those were strictly (Walker’s) responsibilities.”
Copeland said IRS Revenue Officer Sonya Broussard arrived at Vidalia City Hall Thursday and left Friday with a check for the full $635,412.76.
Those funds came from two CDs, one for $350,000 and another for $610,526, that Copeland said were part of reserve funds the city keeps for emergency situations.
“The CDs are in there for emergencies that we never know what we’re going to use it for,” Copeland said. “I didn’t want to use it for this, but at least we have the money to pay the people.”
The remaining $325,113.24 will be reinvested into another CD, Copeland said.
“That’s money we keep in a rainy day fund for some issues that may happen,” Copeland said. “We made a mistake, and we had to correct the mistake.”
The total unpaid balance owed to the IRS, Copeland said, was made up of thousands of dollars in penalties and interest fees that he hopes can be reimbursed by the IRS.
“Due to the fact that we explained to her that we immediately paid it and other financial issues, I asked if they take a look at it and hopefully they’ll reimburse us some of that,” Copeland said. “I do believe in my mind that they will work with us, but I won’t know until we get a check.”
A federal tax lien is the government’s legal claim against an individual, business or government entity’s property when a tax debt isn’t paid.
The lien arises automatically when unpaid balances aren’t paid within 10 days after an initial notice is sent, according to the IRS website.
After the 10 days, a notice of federal tax lien is filed, which publicly notifies creditors that the IRS has a claim.
Once a lien arises, the IRS generally cannot release the lien until the taxes, penalties, interest and recording fees are paid in full or until the IRS may no longer legally collect the tax, the site stated.
A spokeswoman for the IRS said Tuesday she could not answer questions regarding the Vidalia situation.
A certificate of release of federal tax lien was filed at the Concordia Parish Clerk of Court’s Office on Thursday.
“This is a bump in the road, and we’re going to get over it,” Copeland said. “I’m embarrassed about this entire situation.”
To ensure a similar situation doesn’t occur in the future, Copeland said he would become more involved in all aspects of the procedures, and ensure that the city’s certified public accountant is working closely with other staff members.
“What we’re going to do is bring a consultant in here on a consultant basis and go over all our issues,” Copeland said. “I’ll be more involved, and we’re going through everything to prepare us for our audit.”
The 2011 Vidalia audit, conducted by Silas Simmons Certified Public Accountants and Advisors of Natchez does not include any findings regarding payment of federal taxes.
Silas Simmons does note in the audit that auditors did not review internal controls over finances in the City of Vidalia and could not comment on whether such controls were appropriate or not.
“In planning and performing our audit, we considered Town of Vidalia, Louisiana’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of Vidalia, Louisiana’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Town of Vidalia, Louisiana’s internal control over financial reporting,” the audit says.Wes Gore, a CPA and partner at Silas Simmons, said Thursday he could not answer questions about the Vidalia audit, but did say income taxes are something the company analyzes during audits.
“That’s something we look at it,” Gore said. “We really aren’t at liberty to talk about (the audit.)
“I realize that Vidalia is a public entity and it’s public record, but all that has to come through them.”