State auditor finds $1 billion in errors in Lancaster County Treasurer’s office

State Auditor Mike Foley released a report Tuesday morning regarding nearly $1 billion in errors from the Lancaster County Treasurer’s Office, calling it a “gross mishandling of local tax revenue.”

County Treasurer Rachel Garver — a county elected official — was cited in the report for a mishandling of funds. In a response to Nebraska Public Media News, Garver said those errors stemmed from “misstatements in our semiannual reports.”

Those “misstatements” were in published semi-annual statements between June 2025 and December 2025.

According to the report, when the treasurer’s office distributed funds, transactions were logged twice for both the collection and payouts. That resulted in the nearly $1 billion in errors.

The duplication spread across eight different funds, with the “Tax Escrow Holding Fund” having over $590 million in duplicated funds.

Foley reported the treasurer had improperly distributed property tax credit money revenue, resulting in the overpayment to every local taxing authority in the county and $1.2 million underpayment to the state from 2023 to 2025.

“Including holding funds in the semiannual report created the appearance of nearly one billion dollars in discrepancies, which did not affect the distribution of property taxes,” Garver said.

However, the audit details that those underpayments resulted in “a reduction in the amount of funds available for property tax relief in subsequent years.”

In the audit, Garver said those checks were sent and delivered to the state. It also says this information was forwarded to the Department Property Tax Administrator to see if further action is necessary.

The office collects property taxes to be distributed to schools, fire districts, cities and villages. It also oversees motor vehicle registrations and titles in partnership with the Nebraska Department of Motor Vehicles.

For motor vehicle rental tax, the treasurer’s office overpaid various entities, such as over $404,000 to Lincoln Public Schools, $148,000 to the Lancaster County general fund and $121,000 to the city of Lincoln.

Those errors were corrected in 2025, however errors from 2022 through 2024 weren’t corrected until March 2026, according to the audit.

Other issues also reported by Foley included a computational error by the treasurer resulting in overpaying the Lincoln Airport Authority over $214,000.

“This really isn’t rocket science,” Foley said in a press release. “State statute requires a 2% commission to be received, but the County Treasurer retained 1% instead. Like the other errors identified, the mistake wasn’t realized until my staff brought it to the office’s attention.”

Foley also said homestead exemption distributions were calculated incorrectly, resulting in over $75,000 in overpayments.

“When all is said and done the County Treasurer’s accounting was so lacking that she managed to report twice the amount of revenues actually received. According to her, more than $2 billion was collected during 2025. The correct number was a little over $1 billion,” Foley said “Conjuring almost $1 billion out of thin air is hardly a rounding error.”

This isn’t the first time the state auditor’s team raised concerns over the treasurer’s office.

In 2019, a letter sent to Garver indicated concerns over the department's “distribution of proceeds from fines and licenses to schools.”

The office found the county treasurer had over $1 million in undistributed fine and license receipts. According to state statute, those are supposed to be distributed monthly instead of annually, which was how the department was operating.

Former state Auditor Charlie Janssen said at the time a full audit wasn’t necessary as long as the distribution schedule was adjusted.

Additionally, the audit team found issues in the county clerk’s office regarding employee hours under County Clerk Matt Hansen. Foley said the clerk’s team was allowed to adjust work hours directly in the payroll system, resulting in discrepancies.

His office found more than 128 employees had increased their hours worked by a total of 501 hours more than what was recorded in the timekeeping system.

Eight of the 11 County Clerk’s employees didn’t have formal telework agreements, according to the audit. It also details a sample of work days where supervisors didn’t record leave while out of office on vacation.

Hansen said in a statement that the audit overall showed he has maintained "accurate financial documentation and effective accounting processes."

"I appreciate the Auditor's recommendations as they represent best practices that my office can use to continue to improve our work. We have implemented many of the recommendations already," Hansen said.

Foley said in the press release that Garver, "was completely cooperative during the audit process, accepted full responsibility for the findings, and pledged immediate action to address the problems."

“I take full responsibility for all actions and oversights within my office. I appreciate these items being brought to my attention, so we can maintain the high standards of accuracy and integrity expected of the County Treasurer’s Office,” Garver said.