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A computer problem caused the Niagara County payroll office to send out about 1,500 erroneous W-2 forms to county employees this week. The county then spent almost $500 in postage on letters to affected employees, informing them that corrected wage statements will be sent out next week.

Payroll Clerk Katherine E. Pouthier said the statements, used in reporting taxable income to the Internal Revenue Service, were generated using the county's new $1.4 million PeopleSoft software system, which employees have complained is difficult to use.

"When you learn a new system, you don't always get everything right the first time," Pouthier said.

At a recent County Legislature Finance Committee session, the new software package was defended by Budget Director Sharon Sacco and other county officials. They said the system will eventually provide the county with far more information and better tracking of financial matters.

They said those employees who complained that the PeopleSoft system is cumbersome and difficult haven't been diligent enough in attending in-house training sessions.

Pouthier said the problem with the W-2 forms affected all employees who are vested in Tier 3 and Tier 4 of the state retirement system. They pay 3 percent of their gross salaries into the pension system.

"It's deferred from federal tax but not from state tax," she said.

Pouthier said the error would likely not trip up a professional tax preparer, but The Buffalo News heard from relatives of county employees who did their own taxes and had to amend their returns.

"There's been a long learning curve with PeopleSoft," said County Legislature Chairman Clyde L. Burmaster, who learned of the snafu from a reporter.

The letters warning employees of the error cost 32 cents each to mail at bulk rate, according to Veronica Johnson, who runs the county mail room.

Pouthier said the corrected W-2 forms will likely be given to the departments for distribution to the workers, as the original forms were.

However, she said there's a chance they could be mailed, too.

Legislature Minority Leader Robert L. Seger said: "I'll certainly look into it. I'm getting complaints from all over the county."

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