June 4, 2008 – Butkovitz Uncovers a Million Dollars in Lost Revenue From Late Tax Deposits

Audit Date: June 4, 2008
Audit Categories
  • Financial
Controller: Alan Butkovitz

Executive Summary

P R E S S    R E L E A S E

For Immediate Release:                   
June 4, 2008      

Contact: Harvey M. Rice

Butkovitz Uncovers A Million Dollars in Lost Revenue from Late Tax Deposits

Philadelphia Controller Alan Butkovitz today released a review of the City’s tax payment procedures for fiscal year 2007 titled City Revenue: A Million Dollars in Lost Revenue From Late Tax Deposits Report.  The review found that nearly $60 million in tax payments took more than 30 days to deposit — costing the city an estimated $1 million in lost interest revenue.

Commenting on his findings, Butkovitz said, “we found that deposits were significantly delayed in the months following the April 15th tax filing deadline.  In some cases, deposits took as long as 100 days from the time they were received.”

“The City has to do a better job of depositing these checks more timely.  We cannot afford to lose a million dollars each year.  This million dollars could have gone to the School District, to EMS services or the Police Department,” Butkovitz added.

Butkovitz continued, “According to the Government Finance Officers Association Cash Management Committee, a 24-48 hour deposit requirement is reasonable and prudent.  Cleveland, Ohio has a charter provision that requires all payments to the city be deposited by the Treasurer within 24 hours.”

“Baltimore also has a formal policy requiring all checks to be deposited within 24 hours. The Commonwealth of Pennsylvania deposits 95 per cent of their checks on the same day as they are received,” Butkovitz said.

Butkovitz concluded by saying, “We recommend that the Revenue Department devise clear and explicit guideline for processing revenue payments and establish a 24-48 hour timeline for depositing all checks. We also recommend that they adequately prepare for seasonal workload variations.”