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Town finds out county funds must be repaid

SoVaNow.com / April 01, 2021
South Boston Town Council was taken aback to learn that Halifax County has overpaid the local share of sales tax revenue to the town and now wants the money — $265,302 in all — sent back.

The error by Halifax County Treasurer Ruth Oakes stirred grumbling by Council members at a work session Monday at the Washington Coleman Community Center. In a phone interview after the meeting, Oakes acknowledged the mistake, which also affects the towns of Halifax, Scottsburg and Virgilina.

“I apologized in the letter to the towns for my error,” said Oakes. “I am human and can make errors.”

Town Manager Tom Raab explained what happened to Council Monday, saying the mistake goes back to September 2020. Since that time, the Treasurer’s Office has been sending out the wrong amount for the town’s share of sales tax revenue from the state. South Boston and the other towns have been getting a double share of the revenues, which are supposed to be dispensed based on the communities’ population of school-age children.

Raab explained that South Boston Finance Director Mickey Wilkerson first noticed the mistake and called Oakes’ office to straighten out the matter. “Mickey called back in September to report the error, and Mrs. Oakes assured us the figures were correct,” said Raab.

Town Hall also contacted Halifax County Finance Director Stephanie Jackson to inform her of the overpayments. “I knew there had to be a mistake because our student number had not changed this much,” said Raab.

It wasn’t until March, six months later, that the Town received a letter from the county requesting the overpayment of $265,302 be returned. The letter was not addressed to anyone in particular, nor did town officials receive a phone call or a visit, said Raab. The letter was simply addressed to the Town of South Boston requesting these funds be returned.

A second notice arrived on March 18. “I think it was sent to all other towns,” said Raab.

The second notice stated that until remittance is received, the county will withhold further sales tax payments to the Town until the balance owed is satisfied. However, in that letter a check was included for March sales tax in the correct amount.

“It was surprising to receive the check, I thought funds would start being deducting from the overpayment,” said Raab.

Raab said he has sent an invitation to Oakes asking her to speak before Council to explain what happened. He also said this is not the first time that payments from the Treasurer’s Office have been wrong. In 2016, payments were cut in half for a short time. Raab said he was adamant then that the funds were not correct but Oakes assured him the figures were correct. This error lasted two months.

Wilkerson said she has been able to confirm that the mistake was not limited to South Boston. “I contacted the Town of Scottsburg and they received double” too, she said.

Oakes confirmed all towns received a double amount of sales tax revenue.

She explained that many county treasurers rely on the work of Fred Parker, treasurer of Washington County, who tabulates a set of totals to determine the sharing of sales tax revenues between counties and towns. Parker’s report is based on the work of the Weldon Cooper Center for Public Service, a demographics research group of the University of Virginia that produces official annual population estimates for Virginia and its localities.

In his report, Parker provides a breakdown of sales tax revenues to be shared among counties and towns based on their student age populations. In using the report to determine payments to towns in Halifax County, Oakes said she inadvertently looked at the wrong column.

The report generated by Parker has two columns, one with total sales tax and the other that sets out the half to be distributed.

Oakes said it would be simpler and easier for the towns to repay the sums owed to the county in a single payment, rather than stretching out the process.

“It would be more work to tally appropriate deductions for each town each month,” she said.

Oakes, who was re-elected to a four-year term of office in 2019, said she is undecided if she will speak to Town Council at the April 12 meeting.

At Tuesday’s work session, Council wondered how the mistake could have happened.

“I found the reports puzzling because they were initialed by [Washingtom County Treasurer] Fred Parker,” said Bill Snead, chair of the finance committee.

Council members questioned why Oakes does not calculate the sales tax on her own.

“For this to be delegated to somewhere completely unrelated is travesty,” said Vice Mayor Bob Hughes, adding that he would think the sales tax calculation is a primary function of the Treasurer’s Office.

As of Tuesday, Scottsburg is the only locality in Halifax County which has refunded its overpayment of $3,552.19.



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Comments

This is a travesty, wasn't this the purpose of having a Finance Director position created in the first place back in 2007?! Seems there are mistakes continually occurring and even when reported the Treasurer nor the Finance Director make amends or DO THEIR JOB!? County taxpayers should be irate that these two highly paid individuals neglect their duties. Even this year's budget was wrong as reported in another article and taxpayers almost got hit with a 2 cent tax increase. Halifax County it is time to clean house and get new caring professionals in place to manage the day financial needs.

Comments

Ruth Oakes gave away $260,000 of the county’s money and was about to give another $260,000 to South Boston. Board of Supervisors, what are you going to do. Ms. Oakes step down. You are incompetent!


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