Ex-manager blamed for errors

Published 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.”

 

  • Anonymous

    $325,113 profit from investing in CDs rather than paying payroll taxes.

  • Anonymous

    Copeland told the Concordia Sentinel that roughly half the payment to the IRS was interest and penalties. That money is down the drain.

  • i2bdun

    There is no doubt now that Walker is lying through his teeth!!! One story one day (admitting he was to blame) then changing his story the next day claiming no fault! Keep digging, there is yet MORE dirt. That man has been doing some book juggling in other areas too, I bet! Poor Copeland, been duped.

  • Anonymous

    This might be Copeland’s swan song.

  • Anonymous

    But…What happened to the “original” money?

  • Anonymous

    Of course, everybody is going to point the finger to someone else. That is just the way it happens. But the truth is, it’s not just one mans fault.
    There is several .
    This is going to hurt for a long, long time. They keep digging, and they are, finding much more, THAT IS A FACT !!!!
    Vidalia is going threw something like the area of a nuclear war. The quality of this city is quickly self-destructive !!!
    From Law Enforcement Corruption and leadership that is just not there, to financial
    troubles,( which the finger is pointed to the hydroelectric plant — GOT TO BLAME SOMETHING ), to the six year series of errors with the IRS.
    So they had a “lay-off”, they paid the IRS. What in the heck are they going to do with the problems of the VIDALIA POLICE DEPARTMENT.
    They just had three more quit.
    Sorry, but Vidalia is going to have to live with the so called, ” NUCLAR FALL-OUT ” for awhile. The aftermath is what kills, alway remember that !!!
    Hold on Vidalia.
    GOD BLESS AMERICA !!!!

  • southerngal8964

    I thought the city clerk was in charge of payroll? if thats the case, then that person would have known what was going on.. If not then the city did not have a checks and balance system going… I have never heard of a business or company especially a city to not have a proper checks and balance system!! Seems like if the mayor was worried about the city rather than hiring and keeping his friends then this wouldn’t have happened.. Seems like the recall that people are pushing on the police chief should be refocused towards the top… Mayor can blame anyone he wants and say he knew nothing, but just with that statement alone, He SHOULD be embarrASSed… Lead and run the city stop making it a popularity contest copeland get with it!

  • http://www.facebook.com/stacytr Stacy Thornton Roberts

    While Walker is ultimately responsible, there is probably a lower man on the totem pole responsible for actually doing things like making payroll tax deposits and that person did not do their job. So I want to know who that person is and what action is being taken with them if they are still employed with the city? But the fact that Silas Simmons did not find this ‘oversight’ is a major red flag that some Enron accounting may very well have been going on.

  • Anonymous

    It would have been shown as an unpaid liability on the books until last Friday. The unremitted “money” would have remained in the town bank account and most likely was spent on normal operating expenditures. That’s why you have an audit.

  • lagirl318

    Since the unpaid tax started in 2006 and Walker didn’t become employed with the
    City of Vidalia until 2008. how could he be responsible for ALL of the problem?
    In most businesses the payroll clerk is responsible for making tax payments, why
    hasn’t Vickie Byrne been interviewed? She had to have known about this. Silas
    Simmons audits the records, there should have been a balance in the taxes
    payable account since 2006. How is it they didn’t catch this? I do not for one
    minute think that all this has passed unnoticed under Copeland’s nose. If so,
    it’s time for a full federal audit. There’s some shady dealings going on here.

  • i2bdun

    Remember: K.W. is a C.P.A. and he KNOWS how to manipulate numbers! Ever wonder WHY he didn’t pay the Feds? The money was being taken from the employees, and what was being done with it? Where did it go? He didn’t even buy flood insurance for the Riverwalk! Where else has he fallen short? Anyone investigate any of his business dealings? Why did the city attorney lie about the payment?

  • Teresa Burnette

    I also think it’s really funny that the blame is being placed on a FORMER employee. Walker looks to be made into the scape goat. Very convenient for the current employees, so no one has to fess up and
    get fired. Cover up?

  • i2bdun

    Don’t you wonder why he REALLY left? After all he was making $100,000+ per year. More than the mayor.

  • Peyton Johnson

    Questionable bookkeeping practice has been going on since the federal grants for the Riverwalk Projects started to roll in with no accountabilty, now with Vidalia being being being in a financial crisis for the past seven years and with cover-ups running their course, so the next thing is to start the blame game, the end result or fall man will be with the one that pulls all the purse strings and guess who that would be. He told me several years ago that Vidalia was his Town and he would do as he pleased. Beware of the bulldog that has a SHORT MAN COMPLEX. Now the timing is right for the Feds to do an audit that would bring down the short man mayor.

  • Anonymous

    IRS would sent numerous notices via certified mail. If those notices are nowhere to be found, who disposed of them?

  • Peyton Johnson

    All the answers will “LIE” with the current mayor, good luck in getting the truth.

  • Peyton Johnson

    All answers to the many questions ” LIE ” with the current mayor, good luck in getting the truth

  • Peyton Johnson

    The feds will have to audit all employee bank accounts in every state and offshore accounts, just follow the money, it will be amazing the accumalation of wealth by the mayor

  • highroler

    When people start lying there is a hidden agenda. There need to be a fbi investigation.

  • Anonymous

    I think there is way more to this story….someone needs to push to have it looked into by outside source. Looks like there are some good of boys hiding something. Mayor is quick to place blame which makes one wonder but K.W. leaving the job and moving so far away right before this all breaks makes you wonder also. It sure seems like more than one person would have had a idea this was going on over the years. Fishy fishy story in my opinion!!!