LTC 48-2003 CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No.
To:
From:
Subject:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez \ ~
City Manager ~¢~'O
Additional Information on Audits of Resort Tax Businesses
Date: February 19, 2003
At the January 15, 2003 meeting of the Finance and Citywide Projects Commission
Committee, a Request for Preposal was submitted for auditing services for resort taxes.
A discussion centered on the attached schedules comparing the various costs associated
with both the external contractors and the City's field agents. A request was made to
previde a further breakdown of average hours per type of audit. ·
Attached is a schedule comparing the average hours per type of audit. For fiscal year
01/02, the average hours for audits on annual accounts were the same for both the City's
field agents and the external contractors. However for audits of monthly filers, the average
hours per audit for the City's field agents were significantly higher (46.6 hours) as
compared to the external contractors (27.27 hours).
The difference in hours per audit is attributed to the following points: First, field agents are
usually assigned preblematic accounts. These accounts consist of past due accounts and
other accounts which require immediate audit attention for one reason or another due to
the current filing status. Some of these accounts are breught to our attention by reviewing
past due reports, and others are requested by the Finance Department. Due to the nature
of the problem, these accounts may take Ionger to audit. Second, t he largest hotel
accounts are usually assigned to inside field agents. These businesses have extremely
large operations (multiple revenue centers) and generate high volumes of transactions.
Notwithstanding these points, the City's field agents' audits more often result in an
increased number of assessments being charged. This may be attributed to a more
thoreugh audit being performed. Over the past five fiscal years, field agents' audits of
monthly accounts resulted in assessments on 54% of the audits performed and averaged
$4,035 per audit. For the same period, external contractors' audits resulted in 41% being
assessed for an average of $2,741 per audit. (See attached schedules)
We will continue to monitor the performance of our field agents against that of the external
contractors, and strive for ways to improve their average hours per audit. If you have any
further questions, please feel free to contact me.
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