Beaufort County to repay $1.6M in missed interest. What happened?
Over the next several weeks, Beaufort County residents could be receiving a check in the mail with money they have been owed from their local government, some for as many as five years.
These residents will be paid nearly $1.6 million in unpaid interest on refunds and appeals for real property tax after the county’s former auditor abruptly stopped making the necessary calculations. Officials say more than 5,500 refunds were issued without interest over the past five years.
The disclosure has been cited by county officials as a step toward restoring public trust and long-promised transparency. The fault dates back to the workings of the previous administration.
County Administrator Michael Moore addressed the situation during a county council meeting on August 11.
In May, the county’s administration was notified that the county’s auditor stopped calculating interest rates on refunds owed to taxpayers in 2020, he said. It was a task that the auditor’s office had done up to that point, and since then, the calculations have not been made. Without these calculations, checks for earned interest can’t be sent to taxpayers.
“We just want to make an effort to make the taxpayers whole that were affected by this,” he said.
The money will come from the county’s general fund, which for the current fiscal year amounts to just under $200 million.
What is an interest calculation?
If the county collects too much money from a taxpayer and later has to refund it, state law requires the county also pays back interest, similar to how a bank would pay interest on money that was kept in one of their accounts. Interest in this case is meant to repay a taxpayer for the government holding onto their money.
There are several reasons why a taxpayer could be owed a refund, explained Beaufort County Auditor David Cadd. Successful appeals made on property values, disputes on primary and secondary resident tax rates or just a simple overpayment are among the reasons why a taxpayer could get a refund from the local government, he said.
State law says that there is a 75-day period, or buffer, for governments to refund taxpayers before interest is owed. There are many scenarios and situations that dictate whether someone is owed interest, said Cadd.
Most commonly, a taxpayer would qualify for an interest payment if there were more than 75 days between the date of a taxpayer’s appeal and the time their refund is granted, Cadd said. However, the actual interest calculation would start on the original date that the bill was due until the check was cut, he said.
In this case, taxpayers did receive the refunds they were owed, but they never received the interest.
Cadd explained that the $1.6 million is the total combination of interest payments that were owed to the taxpayer at the time of their refund. But the interest payments that affected taxpayers will receive does not account for the time between when they were refunded and the present, he said.
For example, Cadd explained, if a taxpayer received their refund in 2022 and was owed an interest payment of $10 at the time, their interest has not continued to accrue to a higher figure. That taxpayer’s interest check will still be for $10. This is because state law says that taxpayers are owed interest on tax-related payments, not interest on interest, Cadd said.
What happened?
The issue comes down to a vague state code and a dispute between two Beaufort County offices.
State statute does not clearly define who is actually responsible for making the calculations, said Beaufort County Attorney Brian Hulbert during the council meeting. He added that there was a dispute between the two offices regarding who is ultimately responsible.
Moore added that after looking across the state, he found that while responsibility for the calculations differs from county to county, auditors handle them in most cases.
Back in 2020, the county’s auditor at the time, James Beckert, stopped making interest calculations. Cadd was Beckert’s deputy auditor at the time, and said that Beckert stopped doing them because the assessor’s office made the process “more cumbersome” by not providing the auditor’s office with “necessary” information to make the calculations.
An office’s controversial past
Cadd was sworn in as Beaufort County’s auditor in July 2023. According to previous reporting from The Island Packet, he had been fired from his role as deputy auditor in 2021 due to conflicts with Beckert, who was mired in controversy.
Between 2020 and 2022, Beckert was sued in three separate lawsuits for harrassing women who worked for Beaufort County and by the county itself, twice, for “failure and refusal” to do his job.
The county’s second legal complaint against Beckert, filed in 2021, addressed the interest calculations directly. The lawsuit says that although Beckert did not have the “discretion” to do so, he refused to “calculate interest on underpayments and overpayments.” The lawsuit has since been dismissed without prejudice according to public records.
After returning to office in 2023 as the elected auditor, Cadd said he was not informed that the calculations were still not being completed.
Ebony Sanders, who has served as the county’s assessor since the calculations stopped, said during the council meeting that she had attempted to notify previous administration and county lawyers about the calculation lapse, but to no avail. Sanders then brought the information to the county’s current Chief Financial Officer, Pinky Harriott, and the administrator.
The administrator directed the assessor’s office to handle the backlog of calculations, Hulbert said, and the assessor is “willing to resume” the calculations from this point forward.
