Special Events FeesMII.AMIBEA H
BUDGET AND PERFORMANCE IMPROVEMENT INTERNAL AUDIT REPORT Internal Audit Division
TO: Jorge M. Gonzalez, City Manager AQ
VIA: Kathie G. Brooks, Budget and P~~ance Improvement Director -fV!!/
FROM, James J. Sutter, Internal Audito~ /
DATE: August 17, 2011
AUDIT: Special Events Fees
PERIOD: October 1, 2008 to December 31, 2010
This audit report is the result of a regularly scheduled audit of the special event permits issued
by the Department of Tourism and Cultural Development.
INTRODUCTION
A City of Miami Beach special event permit is required for any organized event of a temporary
nature that takes place on public property or private property where such event would not
normally be allowed on a permanent basis based on zoning, Certificate of Use or Business Tax
Receipts. Applicants who wish to hold a special event must submit to the Special Events
Division a completed special event application, no less than 90 days prior to the event if held on
the beach or 60 days for non-beach event. The Special Events Division is responsible for
assisting special event producers in obtaining special events permits through compliance with
stated requirements. In addition, the Special Events Division serves as a liaison between local
and regional associations and agencies in addressing the delivery of city services, updates the
calendar of events on the Internet, and assists neighborhood associations with maintenance of
events' criteria.
The Special Events Liaison has the responsibility for administering, organizing, planning and
facilitating special and cultural events, including in-house City sponsored events. The Special
Events Liaison also assists in the preparation and development of special and cultural event
budgets for city services, based on the scope of the event.
The event applicant is able to access the Special Events Requirement Permit Requirements
and Guidelines through the City of Miami Beach's website. The corresponding information
provided helps guide applicants through the process of applying for a special event permit, and
to minimize disruption to the impacted surrounding environment. It details the application and
approval process and lists the required documents (i.e. permits, insurance, site plans, etc.) that
must be submitted.
For each event the Application Fee and Permit Fee is $250 for each. A minimum security
deposit of $2,500 is also required to protect the City in the event an outstanding balance
remains at the conclusion of the special event. If average attendees per day is anticipated to be
over 1 ,500, then the permit fee is increased to $500 and the required security deposit is $5,000.
Other additional charges that may be incurred include police off-duty officers pay and
administrative surcharge, building and electrical permit fees, vehicle beach access fees,
Lummus Park and Lincoln Road User Fees, market concession fees, event concession fees
and square footage fees.
We ore cornmiflecl to providing excellent public service one/ safety to oil who live, work, and ploy in our vibrant, tropical, historic community.
Internal Audit Report
Special Events Fees
August 17,2011
City Financial records show the following amounts received from related special events fees:
Fee Type FY 2008/09 FY 2009/10 FY 2010/11
(3 months)
Application /Permit Fees $74,350 $84,076 $57,841
Vehicle Beach Access Fees $16.950 $23,050 $11,250
Lincoln Rd User Fees/Market $1,637 $2,742 0
Event Concessions $68,484 $53,874 $740
Lummus Park User Fees $15,643 $31,227 $10,000
Square Footage $78,638 $115,320 $62,807
Total Revenues $255,702 $310,289 $142,638
PURPOSE
The purpose of this audit is to determine whether special events transactions procedures are
established, authorized, and maintained in accordance with laws, regulations, and
management's policy; whether fees and transactions are accounted for, economically and
efficiently processed, accurately and promptly recorded; whether recorded balances are
periodically substantiated and evaluated; and whether City records, and files are properly
safeguarded and controlled, and access thereto is restricted in accordance with management's
criteria.
OVERALL OPINION
Our review of Department of Tourism and Cultural Development and Finance Department
records confirmed that the Special Permit Fees with regards to the following items have properly
documented, correctly computed and properly assessed in compliance with the City Code and
departmental policies and procedures.
• Application and Permits Fees were properly collected and recorded in the City Financial
System
• All Special Event Permits waived by the City Manager or designee were properly
approved, and documented to include the not for profit organizations papers in the file.
• Indemnity agreements and insurance requirements were properly document and
approved by the City Risk Management department as well the indemnity agreements
were approved by our City Attorney Office.
• Instances where the following fee were applicable (Vehicle Beach Access, Square
Footage, Beach Concessions, State Sales Tax, Lummus Park User fees, Lincoln Rd
User Fees/Market), have been properly collect and recorded in the City Financial
System in our sample selected for testing.
However, the following areas need improvement:
• Where the minimum security deposit has been approved for a lesser amount, supporting
documentation needs to be kept in the event file supporting the rationale. Event files for
some events with minimum security deposits charged need further support to document
the rationale for charging the minimum rate.
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Internal Audit Report
Special Events Fees
August 17,2011
• Security deposits reconciliations should be performed periodically to ensure that
balances are accurate and supports active events.
SCOPE
1. Confirm that comprehensive policies and procedures exist, are known and are followed
by staff.
2. Confirm that the security deposits are collected prior to the events.
3. Confirm that all security deposits are reimbursed at the conclusion of the event.
4. Confirm that the various special events related fees are accurately calculated and
collected, adequately documented and correctly recorded in accordance with the City
Ordinance and administrative policies and procedures.
5. Confirm that all monies received are properly recorded in the City Financial System.
6. Confirm that all security deposits reimbursed are properly recorded in the City Financial
System.
7. Confirm that all application and permits waived where properly approved by the City
Manager.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
1. Finding: Collection of Sufficient Security Deposits.
The Special Events Permit Requirements and Guidelines require a refundable security
deposit will be required no later than thirty (30) days in advance of the event. The
amount of the security deposit is based on the scope of the event, 0 to 1 ,499 attendee's
require a $2,500, attendance of 1,500 and above requires a $5,000 deposit. These
funds are held by the City pending the satisfactory completion of the special event and
the subsequent payment of all monies due.
Internal audit reviewed a total of seventy-four special event files and noticed four files
which a lower amount of security deposit ($2,500) was collected; a security deposit of
$5,000 should have been collected in accordance with the guidelines and requirements
since they were projected to be over 1,500 attendees. The Special Event Division,
indicated that the four events in question were yearly events from a reliable event
producer and the City knew that the event would not reach 1,500, and the Tourism and
Cultural Development Director approved the lower $2,500 deposit in accordance to the
Special Events Fee Schedule.
Recommendation:
While the Special Event Division keeps excellent records, it is recommended that in the
future, any event requiring a revision to the minimum deposit based on subsequent
changes to the application, be approved in writing by the Director of the Department.
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Internal Audit Report
Special Events Fees
August 17,2011
Management Response:
Management agrees with the recommendation of the Internal Auditor and will better
document those valid incidents where minimum deposits are received in lieu of
requirement.
2. Finding: Reconciliation of Security Deposits.
Individual security deposit refunds tested were done in a timely manner or rolled over for
another future event. For FY09/1 0 there was a $72,715 deposit balance carried over to
FY1 0/11. This represents all deposits outstanding for future events or those recently
held but not returned. The Special Event staff maintains a spreadsheet to assist in
tracking fees and deposits paid by fiscal year. It was noted that there is no single listing
outstanding deposits representing the balance at year end. This is an indication that
there is no reconciliation taking place.
Recommendation:
It is recommended that the Special Event Liaison reconciles the deposit account on a
periodic basis to ensure that the end of the year balance supports the security deposit
left in the account. Any additional money should be researched and transferred by
journal entry to the applicable general ledger account. It is further recommended that all
revenue accounts be reconciled monthly to ensure that the correct fee amounts are in
the correct accounts.
Management Response:
Management agrees with the recommendation of the Internal Auditor and will reconcile
the deposit and revenues accounts on a quarterly basis starting in this current quarter.
EXIT CONFERENCE
An exit meeting was held on August 9, 2011 to discuss the audit report and to solicit
management responses noted above. Participants included Max Sklar, Tourism and Cultural
Development Director, Natasha Diaz, Office Associate V, Linette Nodarse, Office Associate V,
Sutter, Internal Auditor and Laura Franco-Rubines, Assistant Internal Auditor. Management
responses were received thereafter and incorporated in the report. All were in agreement with
the contents of this report.
JJS:LR:Ir
(Audit performed by Laura Franco-Rubines, Assistant Internal Auditor)
F:\OBPI\$AUD\INTERNAL AUDIT FILES\DOC10-11\REPORTS-FINAL\Special Events Fees.doc
cc: Hilda Fernandez, Assistant City Manager
Max Sklar, Director
Patricia Walker, Chief Financial Officer
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