Grand jury report slams Travis County tax office for lax oversight


Highlights

Elfant, county’s tax assessor-collector, says goal is “to rebuild the public trust,” meet customers’ needs.

Report lists recommendations that call for training, audits and public hearings before county commissioners.

A Travis County grand jury that has been investigating fraud at the tax assessor-collector’s office has issued a three-page report that slams the office for negligence and a lack of supervision.

The report comes after three people, including two tax office employees, were indicted in June, which prompted the grand jury to review the overall operations of the office.

In May, the Texas Department of Public Safety announced a multiagency fraud investigation related to vehicle titles, leading to seven arrests, including four tax office employees.

“While it is only these employees that are indicted, at this time, the Grand Jury, in hearing the evidence presented, is GREATLY ALARMED at the pervasive lack of supervision and apparent willful dereliction of duty of the supervisors and officers of the TC Tax Office,” the report reads.

READ THE REPORT: Special report of the 403rd Grand Jury

Tax Assessor-Collector Bruce Elfant said in a statement Thursday evening that he takes responsibility and is “fully committed to making sure this never happens again.”

“Our goal is to rebuild the public trust and meet the needs of our customers,” Elfant said. “We will continue to work closely with the county attorney, along with the county auditor and others, to restore confidence in the tax office.”

Elfant said he embraces the recommendations made by the grand jury, and his office has taken steps to increase oversight and training and to implement best practices.

He touted the hiring of Monica Blackwell, a former Texas Department of Motor Vehicles employee who specialized in vehicle title work, as director of the county’s motor vehicle department.

Grand juries rarely issue reports and typically limit their decisions to indictments or no bills. However, they have released reports in cases in which they are troubled by the actions of government officials.

READ ALSO: Audit: Title transfer irregularities might mean tax shortfall of $1M

Jurors wrote that they heard evidence that several supervisors were not making their required semiweekly visits to their assigned tax offices. The county has one main tax office on Airport Boulevard and four satellite offices throughout the county; since the investigation, all but the main office and the Pflugerville office are closed.

Elfant, who has given just one 20-minute interview to a group of reporters since the investigation was publicized in May, said in late June that he had known since taking office in 2012 that the satellite offices needed better supervision.

He said his office has been working with staffers and county commissioners on expanding the offices to make room for supervisors, but renovations have taken longer than expected.

“We knew that we had issues, and we’d been working for years with the commissioners and PBO (the county’s planning and budget office) and with everybody else,” Elfant said. “And we’ve made a lot of progress; we just didn’t do enough quick enough unfortunately. For that, I have to take responsibility.”

Elfant floated the idea of consolidating satellite offices to just a north and south office, which he said would allow his office to more effectively distribute its employees, though it might be less convenient for customers.

In the report, the grand jurors also wrote that tax office supervisors appeared to encourage employees to turn a blind eye to questionable documents.

RELATED: Travis County tax office hurries to reshuffle in wake of fraud probe

“Whether this was for the sake of expediency in an effort to reduce long lines at the TC Tax Office or intentionally criminal, is yet to be determined,” the report said.

The report takes direct aim at Elfant, stating that he ignored questionable behavior by a supervisor and let the supervisor continue in the role despite previous reprimands.

“The Grand Jury finds that there appears to be a pervasive culture, within the supervisory ranks of the TC Tax Office, of willfully looking the other way when presented with questionable practices or behaviors,” the report states.

The report also states that “internal and external audits, investigations and reports extending back to 2014 clearly raised to the Tax Assessor’s attention significant risks” that could lead to millions of dollars of lost tax revenue.

“The TC Tax Office, due to its practice of inadequate supervision, poor accountability, bad management and outright negligence, facilitated the theft of potentially millions of dollars of tax revenue due to the State of Texas,” the report states.

BACKGROUND: Travis County tax employees charged in fraud tied to vehicle titles

“And, while the TC Tax Office and its supervisory staff may be unwitting facilitators in this theft, they are no less responsible for the financial burden this theft places on the state, Travis County and more importantly, the citizens of Travis County, should this dereliction of duty result in increased taxes for its citizens.”

The jury ended the report with seven recommendations, including training on ethics and on red-flagging procedures; annual and monthly audits of transactions; and public hearings by the Commissioners Court to get feedback on best practices for the office. In his statement, Elfant said he will call on commissioners to set public hearings.

Travis County Judge Sarah Eckhardt said Thursday afternoon that she has not been privy to the details of the investigation while it has been ongoing: “This is a group of randomly selected grand jurors that have actually seen the surveillance video and the other evidence in this case, so I have to take very seriously their concern that there is a culture in the Travis County tax office of allowing this standard of behavior.”

Though the Commissioners Court cannot make personnel or management decisions for the office, Eckhardt said, it does have control over its budget.

DON’T MISS: Travis at center of state’s fight with private auto title processors

“Our power is the power of the purse,” she said. “We need to make sure that there is appropriate funding, and that funding is being utilized to change the culture.”

For example, Eckhardt said, the court could put funding into an earmarked reserve that would be pulled down periodically and require Elfant to make a case for how it’s being used for improvements.

Elfant has in the past told commissioners that reducing risk in his office will involve “some honest and possibly difficult conversations during the budget process.”

Earlier this year, Elfant submitted a budget request for an extra $920,000 to hire 14 additional employees for his office’s motor vehicle division for the fiscal year that begins Oct. 1.

However, Eckhardt pointed to budget documents that show that Elfant’s office budget has increased from about $10.4 million in 2016 to $11.7 million in 2018.

“But in any case,” she said, “I don’t think that budget is ever a defense to fraud.”



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