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$8M Revenue Shortfall Blamed on Bad DB Entry
SierraPete writes "Yahoo! News reports that an improper database entry, most likely caused by an external user, has created an $8 Million USD revenue shortfall for a northwestern Indiana county because a house that was supposed to be valued at $121,000 showed a value in the database at $800,000,000. There's no specific suggestion that this erroneous entry was done maliciously, but it is leading to big problems in the local governments as they try to figure out how to drop that much money out of their respective budgets. As an aside, how would you like to be in the homeowner's shoes when he opens up his mail box and finds an $8M property tax bill? I'm sure there was a trip to the emergency room or the dry cleaners involved."
I think the homeowner probably just laughed. In this day and age when you see a computer generated report which is totally outside the norm you can assume error. Maybe one day in the past someone would have sweat but it seems there are so many errors nowdays (we have accepted a certain level of fault with all things computer) that it just was -- they screwed up again.
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I'd just shrug and make a phone call. Who in there right minds would really believe that they owe anyone $8 million? It is like this woman in England that got a utility bill for some $240 million. There is no way any person even mildly associated with reality would believe these to be legitimate and correct bills.
Murphy's Paradox... the more you plan for success, the more avenues there are for failure.
Do they not have a trap for super low or high amounts, adjusting these traps over the years as values go up or down?
One would think these simple things are in place.
That's quite some tax rate... where does an $8M home translate into $8M of revenue for the county?
"$121,000 showed a value in the database at $800,000,000"
Did anyone actually bother to rtfa, or is it just cool to make up numbers for post summaries now?
"A house erroneously valued at $400 million"
"The house had been valued at $121,900 before the glitch."
I mean, that's not a huge error, now is it?
Read the article: It says the shortfall occured because the home was incorectly valued; The taxes on an 8 million dollar home are not 8 million dollars...but a fraction of that.
So here on Long Island for example, taxes would only be about 7 million...
-Chris
--an unbreakable toy is useful for breaking other toys--
The home was 400 million. The taxes were 8 million.
Sell the house at $400 million dollars. Pay the taxes and then run away never to be seen again.
Ooo man the floppy drive is broken. No wait. The computer is just upside down.
If the county doesn't notice a sudden increase of $400 million...nearly half a billion in the grand list (which I'd imagine would be a significant figure), they may have many fundemental issues in the tax assesor's office that need to be addressed.
The slashdot story is incorrect - the house was incorrectly valued at $400 million, not $800 million (meaning that the tax rate is double what the story made it appear to be - not 1% but 2%).
According to the article, the real problem was that while the error was caught in a timely manner by the tax people, the bad data had already made it into other systems. Those other instances were never corrected.
I'm curious why those involved with budgeting never questioned why they suddenly had an extra $8 million to play with. Someone more in touch with government and their community should have wondered what was going on.
Also, it seems a lot like counting their chicks before they've hatched. They had already distributed funds that hadn't even been collected yet. If any big player (particularly businesses) were to fail then the same problem would have arisen - funds were distributed and budgeted against that could not be collected.
Dan East
Better known as 318230.
To err is human, but to really foul things up takes a computer.
And to make a total disastrous mess takes a computer _operated_ by a human.
I wish my tax rate were that low. I'm paying more like 3%.
The software system is badly designed. Internal verification should have caught such a ridiculous value, producing an audit trail or alert.
Of course, a human auditor should have been looking at the numbers as well, but the real human error is in failing to create software that recognizes potential problems.
All about me
Compared to the effort and expense of doing data range and argument validation, I don't think it's a big deal to have sanity-check warnings in assert-driven code. Just because a field can store a couple dozen digits doesn't mean that a flag shouldn't be raised when you see numbers more than 6-7 digits.
There are already similar checks in business code -- you can't sell a negative quantity at a cash register, you have to do a return. Operating systems make similar checks, asking for confirmation of "dangerous" or unusual situations (like permanently removing data.)
Why wouldn't a financial management/accounting system have similar rules enforced and monitored?
I do not fail; I succeed at finding out what does not work.
One would think that the government officials would have noticed the dramatic increase in their available budget from the previous year. Of course they only saw dollar-signs. Sounds like every other local government I've known. How much do you want to bet that they won't reduce their individual budgets completly below the $8 million overage. Anyone?
This county should spend some time and money looking for other data entry holes. Also, exception and audit reports should probably be implemented as a stop gap. Maybe report on parcels that have appreciated more than 30% and do a manual double check before publishing the tax revenue numbers to the budget office.
And at the risk of repeating myself, "This problem was not caused by the Database! Call it "human error", "programmer error", or "lazy auditors" but calling it a "database entry error" implicates an innocent database doing it's job properly. Thank you, you may now return to Slashdot and STOP BLAMING THE DATABASE!
Lippens said the user probably tried to access a real estate record display by pressing R-E-D, but accidentally typed R-E-R, which brought up an assessment program written in 1995. The program is no longer in use, and technology officials did not know it could be accessed.
And this is why you shouldn't make potentially modifiable live data available to just anyone. And why you need to audit and maintain any such programs very closely, which apparently they didn't. And then you still should audit the data because even an experience user can make a simple typo that throws everything off. Who knows what kind of people they had entering data.
They indicated this person wasn't supposed to be doing data entry but I get a never ending laugh out of how some folks would rather have every blow joe enter their own data rather than use an experienced data entry clerk. And then those same folks expect the data to be 100% correct!
First thing I notice is how much property taxes a cheap $121,900 home would have to pay. That amount doesn't seem progressive, $1,500 in taxes.
Second thing I notice is the spending issues. Didn't the government realize that a lot more tax revenue was coming their way this year than in previous years? Didn't that raise some eyebrows? Shouldn't they be trying to spend less, instead of spending 100% of what they think they will get?
If you refused to overpay, why did the country refund the money you overpaid?
A friend of mine was suffering iron toxicity because he took too many iron supplements. He went to the doc to find out what was wrong and went through a battery of tests. A week later he got the report in the mail saying that he had liver cancer. He had a week before his next appointment and started reading up on liver cancer only to find out that it's almost always fatal and it involves a long drawn out time of excruciating suffering before the ultimate demise. So for a week he lived with that knowledge until he went to the doc only to find out that it was a "data entry error."
It turns out that the code behind the checkbox for liver cancer defaulted to the affirmative and the data entry person had just clicked submit after they complete a separate section of the form. So what programmer bozo would default such a data entry field to yes? Was he/she not thinking or was it sadistic humor?
Property taxes are something that should be done away with anyway. It's just one more unfair tax that creates extra work for everyone effected and introduces opportunities for abuse on both sides.
In my state, larger properties are almost always exempted from taxes anyway. That leaves the upper middle class paying the bulk. After all, the poor don't own valuable property and the rich manage their ag exemptions by hiring professional exemption maintainers. If you don't want to play the game you're gonna get screwed, just like dealing with the IRS.
Interesting thing, if the victim of this mistake wasn't watching what was going on, he could have been in a world of hurt. Where I live, there's a relatively short window of time to dispute a valuation. After that you're in real trouble.
People need to realize that a consumption tax is the way to go. Infrastructure for that largely exists already and cheating is hard to do. Wealthier people consume more so therefore pay more and there's a builtin incentive to save. The fewer hidden taxes we have the better since it gives us better visibility to how much we really pay.
It sounds like the county has multiple databases, and the database available to the public records, and the database used to compute the actual tax bills, were separate databases. And, it sounds like there was a single property valued at $121,000 in one system, and $400,000,000 in the other.
This is interesting to me, because I suspect I bet the totals in both systems come up pretty close to the same. In other words, I bet there's one property "accidentally" valued at $400,000,000, and a lot of properties "accidentally" valued at $0. Who in the county might actually own one of those accidentally undervalued properties is left as an exercise to the reader.
If their software was smart enough to do validation checks, it would flag things that were outside of the standard deviation per size and area.
As a developer in the GIS industry, a lot of our clients are County Assessors who use these appraisal systems on a daily basis in conjunction with GIS software to manage the physical land in their respective counties. I'm not in the least bit surprised by this. These CAMA (computer assisted mass appraisal) systems are not only ridiculously overpriced, they are also hilariously outdated. How overpriced? Oh, they range anywhere from 500K to 1.5M. How outdated? Try green screens and as400. What you have is a small office of little blue haired Bettys entering data with no front-end or even back-end data validation going on. The market leaders for this software, such as Manatron, are just beginning to release SQL-based versions of this software. It's truly embarassing. Try hitting your county/twp appraiser's website and see how many spelling variations you can find of your own street. I think the record is about 37. At least this property owner got an $800M value. In some cases the assessors can undervalue their buddies' commercial properties, meaning they will have to pay less taxes than the average property owner...a subtle display of corruption.
That's what the GP said, actually. Your house has an certain assessed value, and a certain tax rate, which accounts for the maximum taxable amount. Many places will only allow the collected property tax revenue to go up a certain amount over the previous year, regardless of new development or raising of assessments.
What could happen is to say that at your tax rate, the locality is able to collect $50 million, but only needs $30 million. They would have to adjust all of their taxes to only collect the $30 million, so nobody would pay the 100% rate based on their assessment. However, if they collected $30 million last year, but need $38 million this year, they may need to perform a special procedure to raise their tax revenue by the $8 million over the previous. In both cases, the maximum possible tax revenue would be $50 million, they levied a tax for that amount internally, and had to do a calculation to drop that to only the exact amount required.
So you see, you have a maximum possible tax, but would like not pay that full rate.
The entire state of MA does it this way, for example. I would be very surprised if most of the US didn't do it in a similar fashion.