Posts Tagged ‘audits’

State Lawmaker Asks Tax Commission To Tighten Regulations On Mining Tax Deductions

By Sean Whaley | 6:56 pm March 21st, 2011

CARSON CITY – State Sen. Steven Horsford asked the Nevada Tax Commission today to act immediately to tighten up regulations on the deductions allowed to mining companies before they must pay the net proceeds on minerals tax to the state and counties.

Appearing as a Nevada citizen rather than as the Senate majority leader, Horsford, D-Las Vegas, submitted a petition asking for the review.

Horsford highlighted discrepancies between Nevada law and regulations relating to mining deductions. He cited the rising price of gold and gross proceeds of mines, yet a decline in net proceeds on which mining companies pay taxes.

“We need to make sure that the mining industry is paying their fair share under existing state law,” he said. “However, there is another apparent discrepancy between the law and actual regulation, and it appears that ambiguity may be contributing to a widening gap between gross and net proceeds.”

Horsford requested the commission commence with an emergency rule-making proceeding to amend and clarify the net proceeds of mines regulations. He also urged a speedy review, saying lawmakers are looking for any potential revenues that could help offset major program cuts in Gov. Brian Sandoval’s proposed budget.

Based on a time-line presented to the Tax Commission by interim Executive Director Christopher Nielsen for beginning field audits in May, this appears unlikely, however.

The state’s general fund revenue estimates will be revised on May 1, and the Legislature will then begin the process of finalizing the budget over the following 30 days.

“As a legislative leader seeking to resolve our state’s unprecedented budget shortfall, I am committed to making sure we are doing everything that we can to collect revenues due to the state,” Horsford said. “As a citizen, I am exercising my right to petition the Nevada Tax Commission at this time to make changes in the regulation that interprets how state law applies to deductions taken by mining companies and determining the net proceeds of minerals tax they owe the state.”

Earlier this month it was disclosed at a Senate hearing that audits of mining company reports on net proceeds tax payments had not been performed for two years. Nielsen today outlined to the commission the plan to begin those field audits.

Sandoval, appearing on the Face To Face television program today, said of mining: “I think they pay their fair share.”

He also said: “The mining industry is going to receive notice that they’re going to be audited in the very near future.”

“They’ve been following the law. These audits will determine whether or not they’re paying what they’re supposed to.”

Horsford said his review of the law and regulations implementing the law show some ambiguities that may be widening the gap between the gross proceeds and net proceeds used as the basis to pay taxes to the state.

The law says the deductions allowed to mining companies are limited to those related to actual costs of mineral extraction, transportation, refining and sale, he said. But the regulation supporting the statute goes much further, Horsford said.

“It allows for deductions for out out-of-state corporate salaries not directly connected to miming operations,” he said.

Other questionable deductions are also allowed, Horsford said.

“What I’m proposing will give Nevadans greater confidence the mining industry is paying what is required under state law,” he said.

Audio clips:

Sen. Horsford says the Tax Commission needs to move quickly to help ensure revenues owed to state by mining companies are collected:

032111Horsford1 :12 to the state.”

Horsford says the Tax Commission needs to change state regulations to ensure all appropriate taxes are collected:

032111Horsford2 :18 owe the state.”

Horsford says ambiguities between state law and regulation may explain the gap between gross and net proceeds:

032111Horsford3 :13 their deduction claims.”

Questionable Billing, Attendance Problems Costing $2.3 Million Identified In Audits Of Nevada Mental Health Programs

By Sean Whaley | 2:15 pm June 30th, 2010

CARSON CITY – Audits of two state mental health programs reviewed today identified a number of serious findings, from physicians working only a few hours a day to questionable and potentially fraudulent bills for services to the mentally ill.

In one case, the Division of Mental Health and Developmental Services is investigating a provider who billed for services to a mentally ill client even though the individual was hospitalized at the time.

Harold Cook, administrator of the agency, said it appears as if there was a “deliberate attempt to deceive us.”

Cook acknowledged that other billings identified in the audit of the residential support programs, where services are provided to mentally ill clients, were “egregious” and “inappropriate.”

The review by the Division of Internal Audits identified numerous cases of questionable expenses, including paying supplemental rent to a client who had spent money on tattoos, $150 biofeedback sessions and $175 on Christmas cards.

The audits were reviewed by the Executive Branch Audit Committee, which includes Gov. Jim Gibbons, the other state constitutional officers and a representative of the public.

Gibbons said the audits show there are people trying to take advantage of the state, and called the findings troubling because they are evidence of a systemic problem.

“And it doesn’t speak well of the people who are submitting the billing or trying to take advantage of the state’s fiscal condition at this point in time,” he said. “The state of Nevada is not for sale. The state of Nevada should not be defrauded.”

In another case cited in the audit, a provider submitted reports that were identical from month to month except for the editing of dates. The same provider showed a charge for 2.5 hours to “meet a client at a restaurant and count change.”

Another provider billed for taking a client on eight-hour bike rides and massage.

Another involved $80 to $105 payments for music therapy with no supporting documentation.

One billing was for more than $1,000 a month on services identified only as, “in home discrete trial.”

Another was for $369 for action lessons with no evidence the service met a client’s needs.

Another case involved a billing from a provider for a client who was missing for over a week.

The claims were approved and paid by the agency with no evidence they were questioned, the audit found.

The audit said the agency could save at least $650,000 a year by clarifying policies for expenditures and improving monitoring. All 11 recommendations were accepted by the agency, although Cook noted in his response that the questionable spending amounts to less than one half of one percent of the $110 million budget for these services.

Cook said there are 5,000 providers, some of whom generate hundreds of bills each month that must be reviewed by staff.

“Sometimes we miss them,” he said.

The second audit reviewed the operations at the agency’s two psychiatric hospitals and 24 out-patient clinics, and found a number of physicians employed by the state were not working full days.

In one case, a doctor who worked at the Rawson-Neal Hospital in Las Vegas averaged two hours a day.

The audit found that on average, none of the doctors, who earn as much as $170,000 a year, worked full days.

“We were able to identify one day in the four months when one of these doctors worked a full day,” the audit said. “We estimate the division lost up to $1.7 million from doctors’ attendance problems at the Rawson-Neal Hospital in fiscal year 2009.”

Cook said the doctor who only worked two hours a day is no longer with the agency. Three other doctors with attendance problems are also gone, he said.

Cook said the expectation is that all state employees will put in an eight-hour day.

The agency is looking at privatizing the medical services as a way to address the issue going forward, he said.

All 11 audit recommendations were accepted by the agency.

Gibbons said the audits help pinpoint problems so fixes can be made going forward. The audit of the agencies is critical to ensuring the state meets its fiduciary obligation to taxpayers.

“We need to know where our weaknesses are, we need to know where the state can do better,” he said.


Audio clips:

Gibbons on audit findings:

063010Gibbons1 :18 not be defrauded.”

Gibbons on need for audits:

063010Gibbons2 :12 solving those probelms.”

Cook on potential fraud:

063010Cook1 :30 to deceive us.”

Cook on findings that were inappropriate:

061030Cook2 :19 by the staff.”

Cook on physican attendance problems:

063010Cook3 :15 are also gone.”