Yellow Springs' state audit lists $19K penalty; Matt Dillon blames IRS, village

Jun. 10—The Ohio Auditor of State issued a finding for recovery of nearly $20,000 Tuesday against several former Yellow Springs officials who failed to pay federal tax withholdings on time, as well as late fees and penalties.
The Ohio Auditor's Office issued a finding of recovery for $19,512.40 for fiscal year 2023, the vast majority of which is attributed to former village finance director Matt Dillon. Dillon left the position in 2022.
Auditors found that Dillon "failed to timely remit payroll withholdings and filings to the federal government, leading to late fees, penalties, and interest," the majority of which would have been avoided had filings been on time, auditors said.
Former village manager Josue Salmeron and former finance director Amy Kemper were also implicated in the report, but on a much smaller finding: Salmeron was deemed responsible for $156.95, and Kemper for $136.13, both of which have been repaid, according to the state.
Dillon and his bonding company are responsible for the remaining $19,219.32, auditors said.
Reached for comment Tuesday, Dillon said he has been forthcoming with the state's independent auditors, but feels that the nearly $20,000 amount is a punitive amount to be placed on one person for a "clerical error."
"I'm a public servant," he said. "I try to be a financial steward, and I take that very, very seriously."
The auditor's report shows that the breakdown of the findings for recovery include: — $4,657.30 for late filing of one Federal 941 Form; — $5,002.19 for seven instances of failure to submit withholdings; — $9,520.00 for incorrect filing of one Form 1099; — $332.91 for seven instances of interest for failure to pay IRS penalties.
Dillon served as Yellow Springs' finance director for only two years. He added that during that time he repeatedly sought guidance from the IRS as to how to properly complete filings, but received no response, in part due to the effects of COVID on the IRS at the time.
"With some of these, like payroll withholdings, we're submitting things without feedback to a black hole," he said.
Dillon further alleged that many of the tasks assigned to him in the role had more to do with Village Council's pet projects, rather than maintaining solid fundamentals of bookkeeping.
"Yellow Springs is the type of town that comes up with lots of extracurricular municipal activities that are beyond the basics. Like, 'Hey, let me just do what I need to do,' which is to make sure our taxes are good."
Dillon said he is looking into his options to appeal the monetary charge.
Leadership for the village of Yellow Springs did not return a request for comment Tuesday.

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