Question from CM Derrick, prior to the April 6th Council meeting:
Q1 - So the city paid sales tax in what amount? How can you just credit it to the next bill with the company? For transparency when I did purchasing, grant compliance, and budgets I always believed the tax should be credited back to that invoice and notations made regarding this issue. I used to be able to get even WalMart to locate a receipt where tax was charged and then fix it properly by crediting it to that receipt of purchase. Since we have MUCH turn-over in this area, I would not think you'd not just leave an invoice in our records that shows we paid tax, it could be confusing to new hires who may see past purchases in the system.
4/6 Staff Response - The City paid sales tax in the amount of $581.63. The City has resolved this issue in the past two ways. The vendor either provided a credit on the next invoice to be sent to the City for payment or the vendor cut a check to the City for the amount of the sales tax to satisfy the overpayment. Historically, the vendor has agreed to provide a credit on the next invoice to show reimbursement of the sales tax paid. The vendor would notate on the next invoice the credit, and what the credit was for. Since this finding was found after payment was made, it was agreed to refund the sales tax on the next invoice. Our internal auditors are also in agreement with arrangement. There is an audit trail that is documented in both the grants records and in Tyler (The City’s financial software) to show the resolution of the sales tax issue. Also, with the development of the checklist we are anticipating this issue will no longer continue since we are also requiring the vendor to sign off on the checklist to ensure sales tax is not included on future invoices. We do agree that it would be ideal to catch the sales tax in the beginning, correct the invoice and pay the proper amount owed.
4/20 Staff Response Provided by Amanda Hernandez, Assistant Director of Planning:
In the end, the vendor issued a check to the City for the amount of sales tax paid, and the grant has been credited.