Junk-Be-Gone Corp.H
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
DATE:
AUDIT:
PERIOD:
Jorge M. Gonzalez, City Manager Q
Kathie G. Brooks, Budget and P~.= rf~o. r .. :mp~lmprovement Director 7J7
James J. Sutter, Internal Auditol"'/./#' /
April15,2011 ,
1-866-Junk-Be-Gone Corp,
October 2007 to January 2011
This report is the result of a scheduled audit of the Roll-off Fee Returns for 1-866-Junk-Be-Gone
Corp. (Junk-Be-Gone).
INTRODUCTION
A roll-off is defined as a container with a minimum capacity of ten cubic yards designed to be
transported by a motorized vehicle. They are typically used for the purpose of removing construction
debris, which include rock, metal and other materials used in connection with a construction project
or for the removal of large quantities of trash and bulky waste,
Approximately thirty companies currently possess business tax receipt demonstrating that they
operate roll-offs within the City's boundaries. They are required to abide by the terms outlined in the
City Code. This includes the remittance of franchise fees calculated by using the applicable
percentage of Miami Beach gross receipts. Reports are to be submitted to the City's Finance
Department by the end of the subsequent month. Effective October 2008 the roll-off franchise fee
was increased from 16% to18%.
Junk-Be-Gone majority line of business is the removal of bulky trash from roof tops, attics, garages,
basements, backyards, offices, warehouses, storefronts, parking lots, houses, condo's, apartments,
construction sites, trailer and storerooms. These services are provided through the usage of two
men and a truck. In addition, Junk-Be-Gone provides roll-off waste services for larger construction
debris.
BACKGROUND
Previously, Internal Audit conducted an audit of Junk-Be-Gone for the period of January 2005 to
September 2007. Our audit report dated February 12, 2008 produced an audit assessment of
$8,849.12 which was paid. This assessment was attributed to under reporting of roll-off revenues
due.
OVERALL OPINION
Junk-Be-Gone did not act in accordance with the City Code's reporting provisions during the audit
period. As a result, gross receipts were not reported and franchise fees were not paid to the City.
The following items were noted during our audit:
• Junk-Be-Gone did not file 30 months of Roll-off Fee Returns where franchise fees were due.
Gross receipts in the amount of $91,353.31 were not reported resulting in Junk-Be-Gone
6wing the sum of $19,515.64 (including interest & late filing charges) to the City.
VVe me committed to providing excellent public se!Vice one/ safety to oil who live, work, one/ ploy in our vibront, tropicol, historic community.
Internal Audit Report
1-866-Junk-Be-Gone Corp, Inc. Roll-Off Fees
April 15, 2011
• Junk-Be-Gone has not filed list of accounts upon renewal. A listing of accounts was
provided during the audit.
PURPOSE
The purpose of this audit is to determine whether all roll-off waste contractor billings were correct,
and whether all City revenues were correctly calculated, received timely and accurately recorded by
the City, and the contractor was in compliance with designated sections of the City Code and related
Ordinances.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSE
1. Finding -Unreported Gross Receipts
City Code Section 90-221 defines gross receipts as "the entire amount of the fees collected
by the licensee, exclusive of taxes as provided by law, whether wholly or partially collected,
within the city, for solid waste removal and disposal". Therefore, all monies collected by the
roll-off waste contractor from Miami Beach service addresses, including dumpster, late fees
and fuel surcharges should be included in reported gross receipts.
Out of 40 months audited gross receipts, Junk-Be-Gone paid the City of Miami Beach 3
months of gross receipts totaling to $10,890.25. Revenues were found in 32 additional
months that was not reported. Junk-Be-Gone collected an additional $91,353.31 in gross
receipt fees for roll-off, fuel surcharges, environmental fees and relocation fees. Junk-be-
Gone charged and collected from customers the franchise fees but failed to remit franchise
fees due to the City for monthly Roll-off Fee Returns. Also noted, the contractor charged
their customers 20% franchise fee for roll-off containers rather than 18% starting March 6,
2009.
The following table summarizes the amount due from Junk-Be-Gone for our audit period:
2007 2008 2009 2010 2011 TOTAL
Oct-Dec Jan.
Audited
Gross $690.25 $40 025.52 $22 049.60 $36 300.69 $3 177.50 $102 243.56
Less Report
Gross (690.25) (10200) (0.00) (0.00) (0.00) (10 890.25)
Unreported
Revenues 0 29 825.52 22 049.60 36 300.69 3 177.50 91 353.31
Roll-off fees
due 0 4 779.28 3 968.93 6 534.12 571.95 15 854.28
Late fees 0 250.00 600.00 600.00 50.00 1 500.00
Interest 0 1 217.88 576.08 365.99 1.41 2 161.36
Total Due 0 $6 247.16 $5 145.01 $7 500.11 $623.36 $19 515.64
Footnote: On October, 2008 as requ1red pursuant to sect1on 90-278 of the C1ty Code, the franch1se
fee paid to the City by its franchise roll-offs contractors was raised from 16% of the
franchisee's total monthly gross receipts to 18% of said gross receipts.
Recommendation( s)
Junk-Be-Gone must remit the amount of $19,515.64 for franchise fees relating to the
unreported gross receipts. Franchise fees of 18% must be charged on all revenues on roll-
off containers within the City limits. Junk-Be-Gone must file returns to the City on a monthly
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Internal Audit Report
1-866-Junk-Be-Gone Corp, Inc. Roll-Off Fees
April 15, 2011
basis. Monthly reports supporting revenues earned should be printed and attached to each
return filed.
2. Finding -Required Reporting
Junk-Be-Gone did not submit the following documents in accordance with the listed City
Code sections during the audit period:
a. Section 90-278 (3) states" The licensed Roll-off waste contractor shall provide the city
manager and the sanitation director with a current list of the names and addresses of
each account, upon initial application and upon application for renewal of its business
license, the frequency of service, the permit number and capacity of each Roll-off
container or construction dumpster as per account and the address serviced by each
Roll-off container or construction dumpster." Junk-Be-Gone has not provided the City
manager and the sanitation director with a current list of names and addresses of each
account, upon the initial application and upon application for renewal of its business
license, the frequency of service, the permit number and capacity of each roll-off
container. However, a listing of customer names was provided during the audit.
Recommendation(s)
Junk-Be-Gone must comply with the designated sections of the City Codes and submit
timely lists of accounts.
EXIT CONFERENCE
Audit findings were transmitted to Junk-Be-Gone on 3/29/11. On 04/05/11, we telephoned Junk-Be-
Gone for a follow-up and e-mailed on 04/06/11 to obtain a response. On 04/15/11 Junk-be-Gone
agreed to our audit findings. Therefore, a city bill will be issued for the amount of $19,515.64.
JJS: CD
Audit performed by Carmin Dufour
F:\obpi\$AUD\DOC1 0-11\REPORTS-FINAL\JUNK -BE-GONE.doc
cc: Duncan Ballantyne, Assistant City Manager
Fred Beckmann, Public Works Director
Alberto Zamora, Sanitation Director
Patricia Walker, Chief Financial Officer
Jorge Bustamante, Junk-Be-Gone Corp. (VPD)
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