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Forensic auditor says DDA wasn't shorted tax funds

March 13, 2013 - A forensic audit report shows the Oxford Downtown Development Authority (DDA) was not shorted $8,550 in property tax funds back in 2006 and 2007 as was previously believed.

"We find no funds 'do to' or 'do from' between the ODDA component unit and the Village of Oxford," according to the March 8 report filed by Certified Financial Examiner Karl Haiser, co-owner of the Ann Arbor-based Michigan Forensic Accounting, Inc.

In June 2008, the Auburn Hills-based Whall Group presented a forensic audit report to the DDA that showed the entity did not receive $8,550 that it should have gotten based on Oakland County tax records.

Since then, there have been lingering questions from both current and past DDA board members about what happened to that money.

Haiser's investigation was different from the Whall Group's forensic audit in one key respect.

He utilized township and village financial reports that showed the amount of tax funds actually paid to the DDA as the standard for making his comparisons, instead of the county treasurer's annual report, which represented the projected amount of taxes "to be collected."

"I looked (the county report) over and I considered it (to be) what I call an unadjusted figure – an amount that was reliable, but could be subject to changes," Haiser said.

The Whall Group's report used the county's report to make its comparison to what the DDA actually collected. That's how the $8,550 shortfall was determined.

Haiser made it clear he's not casting stones at the Whall Group.

"Their conclusion is not faulty because they said here's what I'm measuring and it doesn't reconcile," he said. "Theoretically, they're right. But what I'm saying is (mine is) a more accurate standard."

"I had to step back and use a different standard of measurement, otherwise I end up with the same results," he explained. "If I use everything everyone (else) did, I would come up with the same number."

That's why he decided to employ the township and village's financial reports to make his comparison. "I used what I consider (to be) a more accurate report on actual cash pay-outs (to the DDA)," he said. "I felt that was the best measurable standard to (reach) a conclusion."

Using this new standard, he discovered a much larger discrepancy than what was contained in Whall Group's report and this time the difference was in the DDA's favor.

Haiser's report indicated that, on paper, it appeared as though the DDA had collected $16,363 more than what the township and village records stated. The DDA's records showed it collected a total of $804,220 for 2006 and 2007, whereas the township and village's records showed the authority was paid a combined $787,857.

Haiser was able to account for this difference. He determined it consisted of $10,478 in unpaid personal property taxes and $5,885 in delinquent (or late) property tax payments and penalties. "I was actually able to reconcile everything," he said.

The end result was DDA received all the money it should have – no more, no less.

Although he hasn't closely examined the county treasurer's report to determine why it showed the DDA collecting more than it did – that's beyond the scope of what he was hired to do – Haiser suspects the difference would come down to unpaid personal property taxes and any retroactive changes, made by the Michigan Tax Tribunal, to property values.

CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.
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