STATEHOUSE—An independent audit of the Indiana Department of Revenue (DOR) will be a topic of discussion during the State Budget Committee meeting to be held Monday, State Rep. Jeff Espich (R-Uniondale) tells Inside INBusiness today.

The decision to conduct an independent audit of the DOR was made in response to the discovery of two programming errors that led to an incorrect accounting of state and local tax revenues.

“When the second error was discovered in April, the decision was made immediately to seek an independent audit,” said Rep. Espich, Chairman of the State Budget Committee.

“The administration then proactively sought input from all members of the committee to gather their thoughts on the scope and goals of the audit. Once all sides had a chance to be heard, the administration used that input to create an official request for proposals from interested auditing firms.”

Separation of powers requires the executive branch to direct the audit, but the administration has agreed to accept guidance from the State Budget Committee. The bipartisan joint committee consists of one member from each of the four legislative caucuses and the State Budget Director.

The deadline for the audit proposals was Wednesday, May 23. The next step in the process is to select an independent auditor from the ten firms that submitted proposals.

Budget committee members were given full access to all proposals and were asked to provide their input—including a list of preferences—within a week of receiving the proposals. The input provided by all four legislative caucuses and the State Budget Director will be the primary basis for selecting the independent auditor. The expectation is that work will begin immediately once an auditor is chosen.

“I am very pleased with the rate at which progress is being made. We have moved forward as expeditiously as possible without sacrificing the integrity of the process. This audit is a major undertaking, and one that must be done right. Time is of the essence, but there is no benefit—only pitfalls—to rushing unnecessarily.”

“My hope is that the committee will be able to reach a consensus on the best candidate for the job or if no one proposal stands out, a short list of candidates acceptable to all members.”

“From the beginning, a primary objective has been to be as inclusive as possible of all interested parties—whether Democrat or Republican. The goal here is to make the system work as it’s supposed to for the benefit of Hoosier taxpayers. I applaud my fellow members of the State Budget Committee for their diligent efforts thus far, and I fully expect that we will continue to work together in a productive and bipartisan manner to provide solutions.”

In addition to the independent audit, a working group was formed at the urging of Budget Director Adam Horst to examine the collection and distribution of all local tax revenues that pass through state government.

The group consists of representatives from the four legislative caucuses, the DOR, the Budget Agency, the Auditor of State and two individuals representing local government. They met the week of May 21 to outline goals for the remainder of the year, which include opening the lines of communication between the State and local units of government, restoring confidence in the local tax collection and distribution system, and making recommendations for improving the current system.

Rep. Espich set the State Budget Committee meeting time for today at 1 p.m. in Vincennes, Ind.