Indiana officials disclosed last week that an accounting error led to the withholding of $205 million in local option income tax revenue that should have gone to county governments.
It's the second high-profile mistake by the Indiana Department of Revenue in the last year, and prompted the resignation of Revenue Department Commissioner John Eckart.
The department's chief financial officer, Darrel Anderson, also left, as well as the chief information officer.
The $205 million will be distributed among 91 of the state's 92 counties.
Marion County, which includes Indianapolis, is in line for an additional $33 million in funds, according to local news reports.
Budget director Adam Horst said the state plans to hire an auditor to review its revenue processes and will consider new budget controls.
"We feel like it's all you can do at this point, and you hope that over time confidence is warranted," Horst was quoted as saying at a press conference announcing the most recent mistake.
Gov. Mitch Daniels announced in early January that revenue officials discovered $320 million in corporate income taxes that the state collected but failed to record over four years.