How Delta uncertainty underscores the need for compliance audits
Just when local leaders thought we were in the all clear, here comes Delta. The rise of this new COVID-19 variant has resulted in a significant wave of serious cases across the United States, including Illinois where it's the dominant variety. And it’s not the only variant. Scientists predict additional variants as vaccination rates lag.
This means that municipalities that were just starting to see a return to more stable and predictable sales-tax revenue may get slammed again.
In late August, Gov. Pritzker re-established mark mandates, but has so far declined to limit capacity. Major cities like Chicago are also fully reopened, and are playing host again to festivals and conventions—although with caution. But local leaders are watching rising case counts, holding their breath that new variants and school reopenings don't push the numbers higher.
After nearly 18 months of wildly inconsistent revenue, municipalities don’t quite know what to expect this fall and winter. Between variants and variable weather, Illinois municipal leaders are left scratching their heads, wondering what funds will come in to the coffers.
Clear up discrepancies in sales and use tax receipts
This is where compliance audits can help. These revenue reviews look at your community’s sales and use tax remittances to identify any issues, from incorrect data to misdirected payments.
Compliance audits offer municipalities a real-world look at what’s actually happening with tax revenue so you can anticipate trends and potential budget impact.
But the challenge with municipal compliance audits is that few communities have the extra time and staff or technical knowledge to conduct a reliable audit program. We know that municipalities are running with leaner teams and have pressing priorities. That’s where a trusted third-party provider can be effective.
How to select a compliance audit vendor
Compliance audit firms such as Azavar provide municipalities with the resources needed to perform regularly scheduled revenue reviews.
- Make sure to choose a firm with proven results with communities like yours.
- Seek out referrals from other civic leaders or professional associations, such as ILCMA or IGFOA.
- Ask about their compensation structure, whether they charge time and materials or work contingency-only.
- Learn about their approach, asking questions about how the process works from discovery to recovery.
If your local government has experienced these fluctuations and you’re concerned about how these ups and downs may impact remittances, then it’s time to talk. Azavar’s local-government finance experts can explain how the intersection between uncertainty and sales tax can be hiding other issues costing your community.
Schedule a 15-minute check-in today. We'll explore your financial picture and how our approach can uncover real results. Book a meeting now.