Lawmakers, governor both moving on mining audit issue

Both legislative leaders and Gov. Brian Sandoval's office are moving forward with plans to ensure that Nevada mining companies are properly audited.

The calls for action came after Taxation Director Dino DiCianno admitted to legislative money committees last week that there hasn't been an audit of a Nevada mine in more than two years.

That resulted in DiCianno's immediate departure as director. Sandovals' senior adviser Dale Erquiaga said he resigned.

Deputy Director Chris Nielsen was installed as acting director and, according to Erquiaga, is right now figuring out exactly who has and hasn't been audited, when that happened, whether deficiencies in their records were discovered and what was done with those findings.

DiCianno told lawmakers he has no trained auditors in place to do that work and can't say whether the deductions claimed by the mining industry over the past few years are accurate.

At the same time, Senate Majority Leader Steven Horsford, D-Las Vegas, Monday asked for legislation to audit the taxation department.

He said he is glad Sandoval's administration is moving to address the issue but believes an emergency bill to order the audit is necessary.

Erquiaga said Monday the executive branch audit division will help existing taxation staff begin conducting audits as quickly as possible. He said Sandoval may call the executive branch audit committee - which consists of the constitutional officers and one private citizen - to develop a plan to ensure audits are being properly conducted. He said Nielsen and the audit staff also are planning to examine other areas controlled by the Department of Taxation to ensure there aren't audit weaknesses involving the collection of other revenue sources. Taxation is responsible for collecting most major general fund revenue streams with the exception of gaming taxes and those business taxes and fees handled by the Secretary of State's office.

Erquiaga said despite the lack of staff to handle the net proceeds of mines tax, DiCianno didn't ask for more auditors during the budget process.

Erquiaga said the net proceeds revenue amounts to about $60 million a year so, in the grand scheme of the budget, it isn't a huge amount - about 4 percent.

"It's not about the amount of money; it's about the management practice," Erquiaga said.

Asked whether Sandoval would consider reducing or eliminating some of the deductions mining companies now receive, Erquiaga said not if it is done to increase revenue because that would be "the same as a tax increase."

"If we find loopholes or problems in the way deductions are applied, we'll look at it," he said.