Mike Foley, Auditor of Public Accounts
State Auditor Mike Foley says an audit of Lancaster County uncovered major accounting and financial-reporting problems in the County Treasurer’s Office, along with employee timekeeping and remote-work issues in the County Clerk’s Office.
Foley announced Tuesday that his office’s audit identified nearly $1 billion in errors involving the Lancaster County Treasurer. The overwhelming majority of that figure involves inaccurate financial reporting rather than money that was lost or missing.
Auditors found $961,233,232 in misstatements in semiannual financial statements the Treasurer is required to publish. Foley said the office reported more than $2 billion in revenue for 2025, when the correct amount was a little more than $1 billion.
“Conjuring almost $1 billion out of thin air is hardly a rounding error,” Foley said in announcing the findings.
Property tax credit error
The audit also identified errors involving the actual distribution of tax revenue.
According to Foley, the Treasurer improperly distributed Property Tax Credit money received from the State of Nebraska, resulting in overpayments to local taxing authorities and a corresponding $1,272,295 underpayment to the state between 2023 and 2025.
The Auditor says that money should have been returned to Nebraska’s Property Tax Credit Cash Fund, where it would have been available for property-tax relief in subsequent years.
Other findings cited by Foley include:
* An incorrect commission on Lincoln Airport Authority property-tax collections that resulted in Lancaster County being underpaid $214,539 between 2021 and 2025, with the Airport Authority overpaid by the same amount.
* Incorrect Motor Vehicle Pro-Rate distributions that produced $94,734 in overpayments to 46 local taxing entities and corresponding underpayments to 10 entities.
* Homestead Exemption distribution errors resulting in $75,220 in overpayments to several Tax Increment Financing projects and corresponding underpayments to 21 other taxing entities.
* $613,076 in motor-vehicle sales and use tax collection fees recorded in the County General Fund between 2020 and 2025 instead of being deposited into the county road fund as required by state law.
Foley sharply criticized some of the mistakes, including the Airport Authority calculation. State law required the Treasurer to retain a two-percent commission, but the office retained one percent.
“This really isn’t rocket science,” Foley said.
Despite his criticism, Foley emphasized that Lancaster County Treasurer Rachel Garver cooperated fully with the audit.
According to Foley, Garver accepted responsibility for the findings and pledged immediate action to address the problems.
Auditor raises concerns about County Clerk employees
The audit also identified issues in the Lancaster County Clerk’s Office involving employee timekeeping.
Auditors documented 128 instances in which employees increased the hours recorded as worked by a combined 501 hours beyond what was reflected in the county timekeeping system.
The Auditor’s release says the Clerk was eventually able to provide limited supporting evidence, including sent emails and Microsoft Teams messages, indicating employees had been working during some of the questioned periods. Auditors said significant time and effort were required to produce the documentation.
The audit also questioned “flex leave” earned by overtime-exempt employees because documentation could not be provided showing when the additional work occurred.
Auditors additionally identified violations of Lancaster County’s remote-work policy, including employees who had not signed required agreements or identified their off-site work locations.
Foley’s office cited instances involving three supervisors who reportedly worked remotely while on vacation, reducing the amount of vacation leave they used. One supervisor reported working while traveling on a train and while driving home from a family vacation.
“As public servants, all Lancaster County employees must be accountable for their work hours,” Foley said.
Foley says his office plans additional audit work to determine whether Lancaster County takes corrective action.
“As the second most populous county in Nebraska, as well as the seat of State government, Lancaster County needs to do better,” Foley said.
The initial report from the Auditor’s Office is available here Press Release – Lancaster County – Final
The Auditor of Public Account Report is available here