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Pennsylvania

Audit: Property board values in error

| Friday, Feb. 11, 2011

HARRISBURG -- An obscure state board that certifies property market values had a 65 percent error rate in a sample reviewed by state auditors, creating the possibility some property owners paid more taxes than they should have, Auditor General Jack Wagner said.

In an audit released Thursday, Wagner said the board, whose figures are used to calculate state funding for school districts and for other local government funding streams, made errors resulting from "a flawed computer system and human error" in 70 municipalities the audit examined.

If school districts and municipalities received less money that they were owed, the errors could have caused unnecessary tax increases, said Wagner. In other cases, districts may have received more money than they were entitled to, he said.

Wagner's auditors reviewed market values from districts including the Allegheny Valley School District in Allegheny County, Rochester Area School District in Beaver County, the McGuffey School District in Washington County and the Hempfield Area School District in Westmoreland County.

The State Tax Equalization Board, created in 1947, is responsible for reconciling market values stemming from the wide disparity in county assessment systems.

Property market values certified by the board are used by the Department of Education and other state agencies to calculate more than $9 billion in state aid to school districts, libraries, volunteer firefighter relief associations and community colleges, Wagner said.

Wagner at a news conference compared the board to a "1947 Hudson with a misfiring engine and a driver that may be asleep at the wheel."

In a written response, the board said it is conducting an internal evaluation of the problems.

Many recommendations in the audit are being implemented, including replacement of the agency's computer system, the board said. That system was "responsible for a good portion of the errors that you (Wagner) and (board) management staff have observed."

The board expressed concern that the audit "fails to place (Wagner's) findings in a balanced legal and factual context."

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