Nassau County Comptrollers Office

An audit of Nassau County's Assessment Review Commission (ARC) has found that it did not consistently comply with its own procedures and controls in the review of commercial property assessments, Comptroller Howard Weitzman said today. The Comptroller also called for ARC to complete ongoing revisions to its procedures for assessing residential properties, and to ensure that all of its procedures are followed.

"Nassau County expects to double the amount of property tax refunds next year, before its ability to borrow to make such refunds is sharply curtailed under the NIFA Act," Mr. Weitzman said. "The county expects to borrow approximately $200 million during the next 14 months to pay refunds. With that much money at stake, it doesn't take a high error rate to produce a serious - and avoidable - revenue drain. Considering the other, less controllable pressures that Nassau budget makers face, this is a critical area in which we can and should exert better control.

"ARC has said it needs more resources to comply with its own internal control procedures. I am therefore calling on the Suozzi administration and the Legislature to review whether the Commission has sufficient resources to do its job with the required degree of reliability," Mr. Weitzman said.

With respect to ARC's reviews of commercial property assessments, the report concludes that the Commission's own written procedures, which require various quality control steps and monitoring by ARC management, are not being carried out consistently. Monitoring reports were not prepared at the required intervals; valuations were not routinely reviewed by employees at the appropriate supervisory level; and statistical tests to ensure quality control were not performed.

With respect to residential assessment reviews, ARC had not finalized its written procedures and policies at the time of the audit, and is still in the process of completing them.

"The backlog of unpaid refunds of residential property taxes was estimated to be $58 million at the end of 2003, as a result of the county-wide reassessment. Documented, detailed procedures for the Commission's review of residential properties are crucial to ensure the accuracy of these refunds.

"Accordingly, I intend to launch a second stage of this audit, to examine a sample of residential revaluations and refunds, in order to assure the public that sound procedures were followed, documentation obtained - in short, that ARC staff did its homework before determining fair valuations leading to refunds," Mr. Weitzman said.

"In addition, due to the complex nature of the revaluation and refund process, involving multiple governmental entities, coupled with increased volumes of refunds, the Comptroller's Office also intends to examine refunds and tax reductions processed by the county Treasurer and the town Receivers of Taxes."

Property assessments in Nassau County are performed by the Board of Assessors. Once the tax roll is established, it is used by the county, towns, schools and special districts for levying real estate taxes on property owners. Unlike all but one other county in New York State, Nassau guarantees real estate tax revenues to the towns, school districts and special districts that use its tax rolls. As a result, when a property is determined to be over-assessed, the county is responsible for refunding the real estate tax on behalf of all jurisdictions to the property owner.

In the past ten years, Nassau County has paid approximately $1.1 billion dollars in refunds. The total paid out in 2003 was $112 million.

Property owners who believe their properties are over-assessed may seek administrative relief through the Assessment Review Commission (ARC), whose commissioners are appointed by the County Executive and are empowered to correct erroneous assessments. ARC determines the property's fair market value and grants reductions in assessed value when warranted. Approximately 45,000 applications for review of property assessments (commercial and residential) were filed for the tax year 2004/2005.

COMPTROLLER RAISES CONCERNS ABOUT CONTROLS AT ASSESSMENT REVIEW COMMISSION

COMPTROLLER RAISES CONCERNS ABOUT CONTROLS
AT ASSESSMENT REVIEW COMMISSION