Auditors Finish Probe of Indiana Tax Accounting Errors

Auditors investigating Indiana's Department of Revenue are saying outdated technology and a work culture that sacrificed accuracy for speed led to $526 million in tax errors from the state.

Auditors for the international accounting firm Deloitte also discovered additional errors with 55,000 taxpayer accounts and 2,880 tax refund requests that were never processed. They credited new management at the agency with trying to correct the problems.

Revenue commissioner Mike Alley says he has been working to change the culture since he took over in May.

Deloitte's audit results come roughly a year after Gov. Mitch Daniels disclosed the first major error: the misplacement of $320 million in corporate tax collections. The found money was used to pad thestate's coffers and pay for a year of full-day kindergarten.

The second mistake involved more than $200 million in local income taxes that was never paid to Indiana counties.