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The Enron School of Accounting - Strikes Back?
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Who do you know wants to buy a car?" There is hardly anyone in southeastern Wisconsin who hasn't heard that question.(excerpted from the evsauto webpage)- That's because auto dealer Ernie von Schledorn asked it in his tv commercials and made it famous.Who do you know wants to believe the numbers discussed below? You can also ask the question as "Who do you know wants to buy a house?" because people are purchasing houses in some communities, at prices based in part on these calculations.*Warning- to fully understand this blog you need some understanding of a branch of mathematics known as multiple regresion analysis, please consult your local math expert.

Does a newspaper article contain evidence of violating the proper procedures for multiple regression analysis mathematics? According to multiple regression mathematical procedure was a review of generated values due to take place well before tax assessments were mailed out? Was that review supposed to lead to an inspection/review in the field of suspicious generated values, both high and low? If this procedure was violated does it rise to the level of a crime? Does it mean the output is flawed? Is it so flawed as to be unreliable? Were the property values properly assessed and taxed? What does it mean if they weren't? Is the one million overassessment just the visible tip of a much larger "iceberg" of problems? "Who do you know wants to buy a house, based on these numbers?" Other communities that Everson worked on include Bayside, Cudahy, Kenosha, Marshfield, Stevens Point, and West Bend. Are their records as bad?

Hypothetically- If one doctor offered you a facelift for $120k, and the next lowest bidder was $100k more at $220k, would you be nervous about buying that one at $120k? Would it make you want to check references? The images are 5 pages from the state issued assessors manual to help you decide if you think the proper procedure was followed.


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Greendale assessment deal made Ex-Greenfield assessor's firm awarded contract:[Zoned Edition] KENNETH R. LAMKE. Milwaukee Journal Sentinel Milwaukee, Wis.:Jun 26, 1997. p. 1
Document URL: Link
The village has signed a 3-year, $40,000 per year contract with Arrow Systems & Services, headed by former Greenfield assessor Merlin Everson, to do village property assessments, according to interim village manager Dianne Robertson.
Robertson said Everson's bid was the lowest when re-evaluation services were included.
She said Everson agreed to do a complete re-evaluation of city property under the terms of his contract. Other bidders said that would add about $100,000 to the cost of their proposals. --------------------------------- Most of the newpaper articles included have been editted to focus on the more pertinent information and save your time reading, the links included will take you to the full text versions to compare. Sticker shock: Home assessment $1 million over:[Final Edition] KENNETH R. LAMKE. Milwaukee Journal Sentinel Milwaukee, Wis.:Oct 13, 1998. p. 1
Document URL: Link
Many Greendale residents were surprised to see how much their property assessments had increased when they received their notices in the mail late last week.
No one was more surprised than Vyto and Diane Kapocius.
The Kapocius family learned that its 28-year-old colonial in the 5000 block of Ramona Drive was now worth $1.2 million, quite a jump from the previously assessed $137,200, said Vyto Kapocius, former public relations spokesman for Wisconsin Bell.
"It must be the old mahogany doors we replaced with oak," Kapocius deadpanned. "I'm now very, very wealthy."
He paid a little more than $5,000 in taxes last year, he said, while the bill on a $1.2 million property would have been about $43,800.
Mary Mudlaff, a clerk at the Greendale Village Hall, confirmed that the million-dollar error also showed up on the rolls there.
"We've gotten some calls, but nothing like that. That's the only one. It's definitely a computer glitch," Mudlaff said.
Later, Kapocius said he was told that the error stemmed from an incorrect data entry at Arrow Systems & Services Inc., the private firm that has Greendale's assessment contract.
"They said they inputted 250 new fireplaces on my property," said Kapocius, who doesn't even have one fireplace.
Merlin Everson, president of Arrow Systems, said he personally called Kapocius to explain the data entry error. He said Kapocius' correct assessment is about $150,000. Everson's firm evaluated about 5,000 properties in Greendale.
By Monday afternoon, the Kapocius error had been fixed, "saving" Kapocius about $38,000 on his tax bill. --------------------------
Ind. House Wrongly Valued at $400 Million Link
Ind. House Wrongly Valued at $400 Million Indiana House Erroneously at $400 Million Blamed for Budget Shortfalls and Possible Layoffs The Associated Press VALPARAISO, Ind. - A house erroneously valued at $400 million is being blamed for budget shortfalls and possible layoffs in municipalities and school districts in northwest Indiana.
An outside user of Porter County's computer system may have triggered the mess by accidentally changing the value of the Valparaiso house, said Sharon Lippens, director of the county's information technologies and service department. The house had been valued at $121,900 before the glitch.
County Treasurer Jim Murphy said the home usually carried about $1,500 in property taxes; this year, it was billed $8 million.
Lippens said her agency identified the mistake and told the county auditor's office how to correct it. But the $400 million value ended up on documents that were used to calculate tax rates.
Most local officials did not learn about the mistake until Tuesday, when 18 government taxing units were asked to return a total of $3.1 million of tax money. The city of Valparaiso and the Valparaiso Community School Corp. were asked to return $2.7 million. As a result, the school system has a $200,000 budget shortfall, and the city loses $900,000.
Officials struggled to figure out how the mistake got into the system and how it could have been prevented. City leaders said Thursday the error could cause layoffs and cost-cutting measures.
The county treasurer said his office spotted the $400 million error after it caused an improper billing, but apparently it wasn't corrected elsewhere.
"It didn't get fixed all the way," Murphy said. -----------------------------------------------------
Yes the assessor/consultant, Everson got the records corrected in Greendale before it affected things like in the case of the Indiana house. The problem is the above seems to demonstrate that the state mandated trip to visually inspect the property wasn't done or wasn't done properly prior to the mailing of assessments in this community. The article doesn't say whether Mr Kapocius had a chimney or not, but even if he did have one, who could believe there were 250 fireplaces attached to it? If they didn't field check this one how many did they check? Those village officials seem to have saved money on the job, but was it done by the book? According to the law? It doesn't appear that way to me! Has he skipped the field checks in every community he's worked on, rendering their results useless? How many other communities used his firm to handle the computer work for other assessor/consultants? Are they going to face budget dilemnas like the County government in Indiana when the truth comes out? In 2000 Greendale encountered this problem, just not on as large a scale.
Assessment error leaves Greendale short $8; [Final Edition] KENNETH R. LAMKE. Milwaukee Journal Sentinel. Milwaukee, Wis.: Apr 4, 2000. pg. 85.B Publication title: Milwaukee Journal Sentinel. Milwaukee, Wis.: Apr 4, 2000. pg. 85.B Document URL: Link
Copyright Journal Sentinel Inc. Apr 4, 2000Assessment error leaves Greendale short $8,152
By KENNETH R. LAMKE
of the Journal Sentinel staff
Tuesday, April 4, 2000
Greendale -- A $270,000 parcel of property being developed for the Overlook Lakes condominiums was erroneously double-counted on the assessment rolls by assessor Merlin Everson last year, according to village clerk-treasurer Todd Michaels.
The error caused the Village Board to budget for $8,152 more of spending in 2000 than it has coming in revenue, Michaels said.
The mistake will have a financial impact on the village because about $6,000 of the incorrectly anticipated $8,152 is owed to other taxing jurisdictions, including the Greendale school system and the county, he said.
The village will have to make those payments, Michaels said.
Everson is a private assessor hired by the village for the first time in 1999, Michaels said. The error might have arisen out of the fact that the 5-acre parcel was subdivided in 1999, Michaels said.
The Village Board's Finance Committee decided Thursday not to pursue legal action against Everson, Michaels said.
Everson was a controversial figure when he was the full-time city assessor for Greenfield several years ago.
He was suspended for several months by the Greenfield mayor and Common Council in 1996 on suspicion of doing private assessment business on city time. But Everson eventually was cleared, winning three lawsuits and a favorable district attorney's opinion in the case.
what happened prior to this?some background infoDocument URL: Link Copyright Journal Sentinel Inc. Dec 15, 1995
In addition to serving as Greenfield's assessor, Everson is associated with a private assessment firm, Arrow Systems & Services Inc. of Hales Corners, Neudauer said Wednesday.
The firm conducts assessments in other communities that do not have their own assessor, such as Bayside, he said.
According to Neudauer, a few years ago, Arrow signed a contract with the City of Greenfield to use some city assessment computer software. Arrow was to improve the software and market it to other firms and communities.
Greenfield was to receive a percentage of Arrow's profits from those sales. A maximum of $100,000 was to be paid to the city, Neudauer said.
Neudauer said the current inquiry centered on whether the contract's provisions were adhered to.
According to police sources, two investigators from the district attorney's office recently completed a search of Arrow Systems offices under a court order.
About two months ago, the district attorney was asked to look into operations in Greenfield city government as a result of a management audit of the city conducted by the accounting firm of Reilly Penner & Benton.
Document URL: Link Copyright Journal Sentinel Inc. Sep 6, 1996
Everson said he would return to work this morning. His attorney, Mark Nielsen, said the commission's action exonerated Everson from charges that he used city property for outside work. He had been suspected of doing work for a consulting firm while collecting a city salary.
"They found the work he did for Arrow Systems was work the city expected him to do when the contract was entered into," Nielsen said.
The Milwaukee County district attorney's office has been investigating whether federal charges of misconduct in office against Everson are appropriate. No final action has been taken in that investigation.
"There is no evidence that Mr. Everson didn't do the work of the City Assessor," the commission said. "However, better management of his department would have occurred if not for the assessor's absences from his office and work for Arrow Systems."
Everson "did do other Arrow Systems work beyond the scope of the contract with the city and what was anticipated by the city," the commission said. While the commission found that inappropriate, Everson was not under established work rules or definitive hours, it said.
Document URL: Link Copyright Journal/Sentinel, Inc. Jan 11, 1997 Merlin Everson, the Greenfield city assessor who was suspended without pay for seven months last year for doing private work on city time, will not face criminal charges, a prosecutor said Friday.
Feiss had the Everson case under review for more than a year, partly because he was awaiting the outcome of the Civil Service Commission's investigation, which involved lengthy hearings.
Feiss cited two potentially criminal allegations against Everson.
One, he said, was that Everson, while acting as a private assessor, had used the Greenfield city computer to assess property in Bayside. The other was that Everson had submitted incorrect time sheets declaring that he had been at work on days when he wasn't.
Feiss said that former Greenfield Mayor James Besson, under whom Everson worked at the time, testified at the commission hearings that both practices were acceptable.
According to Feiss, Besson testified that Greenfield shared some profits from the Bayside assessment under a contract with Everson's private assessment firm.
And Besson, in his testimony, had no complaint about the incorrect time sheets because Everson performed work for Greenfield at night and on weekends and his work got done, Feiss said.
Feiss said he did not think a jury would have found Everson criminally liable for the false time sheets under those circumstances.
Document URL: Link
Copyright Journal/Sentinel, Inc. Jan 16, 1997
The assessor was suspended after an outside management audit in 1995 accused him of doing private assessment work on city time. Everson contended that he was merely doing work authorized under a contract between the city and Arrow Systems & Services, a private assessment firm Everson founded.
The assessor says new work rules designed by Seider are harassing.
He says those rules deny him a key to his own office, require him to ask permission in writing whenever he leaves City Hall and prohibit him from keeping a picture of his family in his office.
Seider says the new work rules for Everson were unanimously approved by the council and do not include prohibiting a family picture.
"We told him he could not use his office for personal business. There was nothing about pictures," the mayor said.
The rules concerning the office key and notification when leaving the building were necessary, Seider said, because of Everson's past practices of allowing private work to be done on the city computer and of leaving the office to do private work without telling anyone.

Please e-mail this to as many friends and public officials as possible. Let them know you'd like this investigated, to know who got the math right. Just like Enron the longer this goes on the greater the financial damage is done, and the cost to clean it up just keeps going higher.

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