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Performance Audit of Individual Income Tax Return Processing

Receives AOPTA Award for Six-Month Period - Ended December 31, 2006

Scott Strong, Deputy Auditor General, is pleased to announce that the performance audit of Individual Income Tax Return Processing, Department of Treasury, is the winner of the Audit Operations Project Team Award (AOPTA) for the six-month period ended December 31, 2006. The audit team consisted of Mike Ventura, supervisor; team members Renee Johnson-Maybee, Andy Mitchell, and former employees Tom Kuslikis and Julie Manning; Mark Freeman and Therese Regner, Audit Division Administrators; and Gerry Schwandt, Audit Manager.

The effectiveness of income tax processing and tax collections is of key concern to the executive and legislative branches. The confidentiality of tax processing procedures made it difficult to draft a report that was clear, concise, and informative, while avoiding the disclosure of confidential information. The audit supervisor met numerous times with the agency during report processing to ensure that confidential tax processing information was not disclosed in the report.

The findings in this report received attention from the Legislature and the media. The report contained 2 material findings and 6 reportable conditions and identified over $20 million in estimated savings. The Department of Treasury agreed with the findings.

The audit crew worked well as a team and with the agency. In addition to the normal processing of the report, the team had to coordinate details of the findings with the agency that could not be printed in the public version of the report due to the confidentiality of tax processing procedures. The audit crew worked with several years of electronic State and federal tax records to complete the audit. The Department of Treasury processes five million income tax returns annually. The records contained confidential tax data, contributing to the sensitivity of the audit. In addition, the audit team also had to work with complex State tax requirements and processing procedures.

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