$8M Revenue Shortfall Blamed on Bad DB Entry 220
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."
The homeowner (Score:5, Insightful)
Re:The homeowner (Score:3, Interesting)
Re:The homeowner (Score:5, Funny)
Re:The homeowner (Score:2)
I was stationed in Japan, and had to send a laptop back for warranty service to someplace in Tennessee.
To judge by the bill, the computer never logged the ~15 minute call to get a service ticket number as complete for something like 10 hours.
Or maybe their accounting department was just sharpening its crayons, as subsequent boo-boos could indicate.
In defense of MCI, they agreed the charge was bogus and cleared me straight away.
Re:The homeowner (Score:3, Informative)
Re:The homeowner (Score:2, Interesting)
This confiscatory policy hurts more than you would think. Ask the retired or any fixed income homeowner in areas with a high gentrification rate. If they still can live there of course.
Re:The homeowner (Score:2, Troll)
It doesn't have to be that way (Score:5, Insightful)
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?
Re:It doesn't have to be that way (Score:2)
Because most of the DB monkeys/req. analysts/programmers hired are clueless. We are currently looking for a DBA/Data modeler and when you talk about data integrity in an interview many of them get the 'deer in the headlights' look in their eyes.
Re:It doesn't have to be that way (Score:2)
Re:It doesn't have to be that way (stock trading) (Score:2)
That's one issue I can't understand - there have been several stories reported recently where traders mixed up the number and price of the shares they were trading:
Traders typing error costs Japanese brokerage firm millions [www.cbc.ca]
You would think it would be possible for the system to check the selling price against the current going price.
Re:It doesn't have to be that way (Score:2)
Re:It doesn't have to be that way (Score:2)
The "valuation" was $800M.
Is there a private house anywhere worth that much?
Re:It doesn't have to be that way (Score:2)
$400M. The summary is off by a (binary) order of magnitude. Check the article. But I'm pretty sure you're still right--I don't think I've heard of any home worth anywhere near that much.
Re:It doesn't have to be that way (Score:2)
Not quite. In 1897 the Indiana House of Representatives actually did pass a bill redefining pi. The bill didn't become law, but it still reflects rather badly on the Indiana House of Representatives. The Snopes article confirms this at the end.
Do I understand this right? (Score:2)
Wasn't there anyone in the process who had a 'reality' detector working? Are any of these people still working for the county? Can anyone really be that dumb?
How can I take advantage of these morons?
And, please, keep these people
Re:Do I understand this right? (Score:2)
The people who planned the budget probably didn't know how large a contribution to the property tax base that one house made. They just get a total base value and from that compute the tax money that they have to work with. Of course, if the change in the base is much larger than expected, you'd think that somebody would look into why, but I suppose that there is a range of changes that are small enough that nobody thought to look into the reason for the change but large enough that their being in error co
Re:The homeowner (Score:2)
Human errors (like addition problems) are more common, but they're rarely in the order of adding 4 extra digits to the value of a house. As one murphy's corrolary stated:
And probably the biggest advantage to computers is that you can do more things faster than you can with humans. Human errors will still me
If it were my house... (Score:5, Insightful)
Re:If it were my house... (Score:4, Funny)
Re:If it were my house... (Score:3, Informative)
You are completely wrong. In my opinion, to understand why seventeen fairies consoled all their kitchen troubles in a yellow rock covered in a stylish freedom fighters dead skin with the phrase 'limbo chocolates for all' engraved in it.
Therefore: vibrating Norwegian horse box full of sea-cucumbers.
For further insight, send an email with the subject 'subscribe' t
Re:If it were my house... (Score:3, Insightful)
Don't assume "troll" when "funny" works.
The sad thing is, many property owners are victim of over-v
Re:If it were my house... (Score:5, Insightful)
Re:What's worse (Score:2)
Re:If it were my house... (Score:3, Interesting)
And be legally stuck with the tax bill, no matter how absurd it is.
I've been stuck with absurd tax assessments on many occasions. As the manager for a regional wireless data company, I've encountered tax abuse that includes:
Re:If it were my house... (Score:3, Interesting)
Yeah Suing works when they don't have to pay... (Score:2)
So if you sue them, you will help pay for their defense (their lawyers are paid for with tax money) and if you win, you will pay part of the judgment as it is paid with tax money.
So, it costs them absolutely nothing, and they even will use some of your money to pay for their propaganda to the effect that thanks to the greedy telecom company refusing to pay its fair share, the people will face higher taxes and reduc
Did you even read the article? (Score:2)
There's no mention of the home owner getting pissed off. The problem is, they assumed they were getting 8 million dollars in property taxes they weren't. They planned their budget around this and now many departments are being told to give money back. Some departments are saying to accomidate giving money back, they might have to do some lay-offs.
They think that the mistake was made on a public terminal for public information lookups. A typo of a similarly n
Simple programming? (Score:5, Interesting)
One would think these simple things are in place.
Re:Simple programming? (Score:2)
Re:Simple programming? (Score:2, Insightful)
Tax Rate? (Score:3, Interesting)
Re:Tax Rate? (Score:3, Informative)
Re:Tax Rate? (Score:2, Informative)
Re:Tax Rate? (Score:2)
400 not 800 (Score:5, Informative)
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."
Re:400 not 800 (Score:2)
Well, with today's taxes (Score:5, Funny)
Read the Article.... (Score:5, Funny)
So here on Long Island for example, taxes would only be about 7 million...
-Chris
Read the article yourself... (Score:5, Insightful)
Re:Read the article yourself... (Score:2)
Re:Read the article yourself... (Score:2)
-Chris
Get rich quick scheme (Score:5, Funny)
Re:Get rich quick scheme (Score:2)
They didn't notice (Score:5, Insightful)
Re:They didn't notice (Score:2, Insightful)
Re:They didn't notice (Score:3, Informative)
Local tax districts set a budget based on some assumptions about the tax base (the amount of taxable real property). After the budget is approved, bureaucrats in the taxation department compute the actual rate by dividing the budgeted revenue / taxable base. Generally there's a legal limit on the rate, but the actual rate that is charged is based on that computation and somewhat lower.
So your property tax rate isn't static (like sales tax, f
Re:They didn't notice (Score:3, Informative)
I chose to reply.
I don't know what state you're from, and things may work that way there, but in Michigan, local taxes do NOT work that way.
There's an important thing to be said, and that's that alot of states do their taxes differently. Local municipal growth and municipal management was something that was allowed to grow organically. Townshi
Mod Parent Down (Score:2)
Re:Mod Parent Down (Score:3, Informative)
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
Re:They didn't notice (Score:3, Insightful)
I don't know about Indiana, but in Iowa, subject to limits, the budgets are set in dollars, and the tax rate is calculated to raise the specified amount. The city didn't necessarily get a real increase in dollars, but now it will see a real decrease d
Time required to catch mistake (Score:5, Insightful)
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
GIGO (Score:2)
Maybe it's the same blind acceptance of numbers spit out by computers that will find a slack-jawed, gum-popping cashier blithely telling you you owe $58.60 for your soda, twinkie and magazine.
They didn't see $8 million in new revenue (Score:2)
Then it was found that the error made it into the projections. That meant the tax rates were too low, meaning the affected communities are receiving less revenue than projected.
Someone co
To err is human... (Score:3, Funny)
And to make a total disastrous mess takes a computer _operated_ by a human.
Re:To err is human... (Score:2)
Damn 2% tax rate. (Score:3, Funny)
Re: Try closer to 50% (Score:2)
Re: Try closer to 50% (Score:2)
This is why you are on slashdot, and not working in the real estate industry...
Many states have what is called a 'homestead exemption'. This allows a benefit to those who settle down in one place, as opposed to flipping houses every few years. Not all states have this exemption, and the time required to qualify varies. But if you are STILL paying the same amount in taxes as if you just moved into a house that you have been living in for over 10+ years you are horribly managing your personal finances.
Why
Re: Try closer to 50% (Score:2)
Here in British Columbia the homestead exemption is mentioned right on your property tax bill. It gives you the amount to pay if you are not eligible for the exemption, the amount to pay if you are, and the criteria for the exemption. It isn't a secret known only to tax professionals and those in the know.
Re: Try closer to 50% (Score:2)
I wasn't born yesterday, and I resent people who seem to think I was based on incomplete information and assumption. You forgot to mention the fact that many states have low income limits or property value limits (at least low compared to my or my fathers situation) on homestead tax provisions. Because of these limitations nei
Crappy Software + Dumb People = Bad Stuff (Score:3, Interesting)
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.
Re:Crappy Software + Dumb People = Bad Stuff (Score:3, Funny)
So it's doesn't really matter in case of dumb people.
Although... we now have a problem.
Great Software + Dumb People = Bad Stuff = Crappy Software + Dumb People
Great Software = Crappy Software
Not surprised... (Score:3, Insightful)
Re:Not surprised... (Score:2)
The $8 million overage is actually an $8 million shortage, because if the mistake had not been made, they would have had that $8 million. Since they thought this home was more valuable than it really was, everyone elses taxes were lowered by
Stop Blaming the Database! (Score:5, Insightful)
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!
Re:Stop Blaming the Database! (Score:3, Informative)
Yeah, why do people always blame the database? I get the "it's the database" accusation all the time from Duhvelopers.
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
Re:Stop Blaming the Database! (Score:2)
#1 - Outsourcing. Programmer codes exactly what the spec says.
#2 - Management. Programmer says "hey, uh, this really doesn't make sense" when he sees the spec. Management says "we don't pay you to question the process, write what the doc says."
Re:Stop Blaming the Database! (Score:2)
Anyway, I'll disagree that x1.3 the house price automatically means that something is wrong. In our neighborhood, house prices shot up over 130% (x2.3) in some cases. The house across the street was valued at $218,000 last year but got an offer for $500,000 just a few months ago (they turne
Re:Stop Blaming the Database! (Score:2)
people problems (Score:2)
Except that a huge number of friends and coworker's houses came close to doubling in value since their last appraisal. Problems aren't as simple as you think they are, and your snap judgement on this shows you've never worked with a dataset that is naturally diverse, or of sufficient size. It is quite possible to have a county with a home that doubles in value even if other values don't go up or drop- for example, a maj
Not Blaming the Database! (Score:2, Insightful)
Re:Stop Blaming the Database! (Score:3, Insightful)
Data entry problem (Score:4, Interesting)
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!
Similar thing happened to me once (Score:2)
Re:Similar thing happened to me once (Score:3, Interesting)
My thoughts on the story (Score:4, Insightful)
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?
Re:My thoughts on the story (Score:2)
for 900 people..
i hate living in a village.
Re:My thoughts on the story (Score:2)
Re:My thoughts on the story (Score:2)
for 900 people..
You need at least three of anything if you want 24/7 availability. The town population isn't really relevant.
Re:My thoughts on the story (Score:2)
Re:My thoughts on the story (Score:2)
In the end though, what they did was lower taxes and raise less money because the house wasn't worth what they thought it was.
The assessments come in first, then they determine w
Re:My thoughts on the story (Score:2)
I think in the counties in Washington state, it's pretty much fixed, more or less. The governments have to deal with the amount of money they get. If they need more tax revenue, I think they would have to try raising the values of the home, not the taxation rate (which I "think" is limited by state constitutional law, lest they do a levy or something).
Comments on property taxes, and yes, this is definitely whining I'm doing.
They
Re:My thoughts on the story (Score:2)
Tragic system design (Score:3, Interesting)
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 tax system (Score:3, Informative)
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.
Re:property tax system (Score:2, Insightful)
My current property tax is ~1% (was ~2% before a primary residence credit) of the value of my land and home. Of that tax >50% pays for the local school system, ~20% for firefighting and police protection, and the remainder goe
Re:property tax system (Score:2)
I'm not really sure where to start off here. Property taxes were the preferred method of taxation for about 150 years. To this day, many think it's the only type there should be. (Although with changes...personally I'll be happy to end the property tax and replace it with a land tax [wikipedia.org] though in my home state that would require a change to the constitution. Land taxes would allow for a more efficient use of land.)
Property taxes tend to pay for v
Re:property tax system (Score:2, Interesting)
Murphy's law (Score:2)
Both Ends (Score:3, Interesting)
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.
This sounds SOOOO familiar... (Score:2)
And just like the current story, there were opportunities to discover the erroneous entry and fix it.
Re:This sounds SOOOO familiar... (Score:2)
Validation... (Score:2, Interesting)
Well I'm not surprised... (Score:2, Informative)
Spending it all (Score:2)
Re:Yes, but there is good news (Score:2)
How about being 100x off the mark.
Re:Yes, but there is good news (Score:2)
Article says $8M tax.
So basically, the city was expecting to get another $8M that they now wont.
Re:Crack Whore Budgeting (Score:2)
Re:Dry cleaners? (Score:2)