Answers regarding a $526 million tax error will have to wait until after Election Day, but the first step in the audit process raises troubling questions about whether the Indiana Department of Revenue can ensure the mistakes aren’t repeated.

Auditors for Deloitte & Touche presented a 27-page risk assessment to the State Budget Committee this month. It identified as “high risk” nine of 18 key business processes used by the Department of Revenue. Eight were classified as “medium risk” and one – providing taxpayer assistance – as “low risk.”

The report cautions that “risk” and “problem” are not synonymous. The observation about priorities – see box below – suggests that cutting costs was more important than getting the job done right.

The audit follows disclosure of three troubling errors made by the agency. The first was $320 million in revenue placed in the incorrect fund. Another resulted in Indiana counties being shorted $206 million in local option income tax funds. In April, counties learned that $536,000 in excise tax revenues hadn’t been distributed.

The errors resulted in administrative changes at the Department of Revenue – the commissioner and chief financial officer were replaced, along with the chief information officer and two deputy controllers. But the changes came only after mistakes became too much to ignore. Democratic lawmakers had called for an audit after the first error was found, but Republican lawmakers dismissed the need.

A final report is expected in December, after voters choose state leaders in November.

The pending review is important regardless of who is elected in November. Hoosiers must be able to trust that the state’s financial information is accurate. Revenue reports are the basis of the biennial budget. They inform tax policy and spending decisions at not only the state level but also the local level. Getting them right is vital.