Recent revelations from Nebraska Auditor Mike Foley have spotlighted significant financial mismanagement in Lancaster County’s Treasurer and Clerk’s offices. A detailed report issued two weeks ago exposed over a billion dollars in accounting errors, prompting immediate corrective measures by the treasurer’s office.
The office plays a crucial role in collecting property taxes, which are then allocated to schools, fire districts, cities, and villages. Additionally, it handles motor vehicle registrations and titles in collaboration with the Nebraska Department of Motor Vehicles.
State Auditor Foley’s report specifically pointed out Treasurer Rachel Garver for mishandling funds. Garver clarified that the errors originated from “misstatements in our semiannual reports” for the period between June 2025 and December 2025.
The audit revealed that the office mistakenly recorded transactions twice, both for collection and payouts, resulting in the billion-dollar discrepancy. To rectify these inaccuracies and avoid future issues, the office is revising its latest semiannual report.
“Their interpretation is you only should count the money once,” Garver stated. “So we’re going to be working on that…We’re going to look at the past report and use that because we don’t have a lot of time to create the report.”
The mishandling affected multiple accounts, including overpayments to local taxing entities and a $1.2 million underpayment to the state from 2023 to 2025, due to improper distribution of property tax credit revenue. Garver explained, “…It was dispersed at 100% and it should have been disbursed at 99%.” The 1% should have been allocated to the state.
To mitigate the impact on local entities, Garver indicated they retrieved the funds during periods of high revenue. “It wasn’t going to be to anybody’s detriment or hurt anybody’s bank accounts or whatever,” Garver said. “It was going to cause the least amount of damage.”
Foley also identified that the office incorrectly withheld a 1% commission instead of the state-mandated 2% for the Airport Authority, leading to an overpayment exceeding $214,000. This mistake occurred when the airport began levying property taxes in 2022.
To remedy this, Garver mentioned plans to update software to ensure Lancaster County receives the correct 2% commission. Moving forward, the office aims to continue enhancing software for greater transparency.
“This really isn’t rocket science,” Foley remarked in a press release on September 15. “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.”
Other discrepancies involved duplicate distributions of motor vehicle rental taxes, resulting in overpayments of $404,000 to Lincoln Public Schools, $148,000 to the Lancaster County general fund, and $121,000 to the city of Lincoln. While these were corrected in 2025, errors from 2022 to 2024 were not resolved until March 2026.
Addressing the Issues
At a recent Lancaster County Board staff meeting, Dennis Meyer, the county’s budget and fiscal officer, presented necessary corrections and suggestions to the commissioners. He is collaborating with Garver to implement changes.
Meyer plans to enlist an external team for accounting support, as the treasurer’s office currently lacks a dedicated accountant due to a vacancy. Garver described the situation as “working from scratch.”
Commissioner Chelsea Johnson highlighted the importance of ensuring corrective actions are completed, noting, “So it sounds like what we’re talking about is the pressure test. So basically, just did the corrective actions that are required that we’ve said we’re doing actually get completed?”
Looking at broader solutions, Commissioner Sean Flowerday suggested legislative support for educational qualifications for county treasurers and clerks in regions with populations exceeding 150,000. “This is a proposal. I’m not married to anything here. We can discuss it. Everything can be changed if we want,” Flowerday stated.
As these efforts continue, Auditor Foley has committed to revisiting the situation to ensure that the corrective measures are implemented effectively. “While Lancaster County has publicly claimed that corrective actions are already underway, my office will return to conduct a follow-up examination to independently verify that such corrective actions were, in fact, fully implemented, and major errors, such as those identified during our recent examination, do not continue to persist,” Foley communicated in a letter to commissioners dated September 17.
