The town of Economy is updating its town payroll procedures after a state audit found an outdated practice that meant state and local payroll taxes had not been withheld as required.
An Indiana State Board of Accounts audit examined the town’s finances from Jan. 1, 2021, through Dec. 31, 2024. State examiner Paul D. Joyce wrote in the audit’s report that “[T]he Town did not withhold any state and local taxes during the engagement period. Both state and local taxes should have been withheld and paid to the Indiana Department of Revenue during the engagement period” across those four years.
SBOA reviewed the report with Economy clerk-treasurer Barbara Irvin and town council president Jeff Jackson on Feb. 18.
Irvin told WWN the issue happened because with town payroll amounts being so small, tax withholding reconciliations had just been happening as a part of each employee filing their individual tax returns.
Irvin is paid $2,700 in pretax payroll, and the three town council members receive $550 each annually. Those amounts have been largely unchanged since at least 2012, according to reports filed with the Indiana Department of Local Government Finance.
Divided across monthly payroll runs, the withholding amounts were so small that the town wasn’t set up to process them at all. But the state said the town needs to process the withholdings, however small, moving forward.
Irvin said there are no past withholdings or fines due, and that the updated process is in place for 2026.
She noted that it can be difficult for employees of small towns who only work a few hours per week on top of other full- or part-time jobs to stay current on requirements and best practices, but that she does attend trainings and information sessions whenever possible.
A version of this article appeared in the April 8 2026 print edition of the Western Wayne News.