G7 Holdings Inc -Garbageman.comMI'AMIBEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division
TO:
INTERNAL AUDIT REPORT
VIA:
FROM:
Jimmy L. Morales, City Manager
John Woodruff, Budget and Perfor~~rnprovement Director@
James J. Sutter, Internal Auditor T/-
Date:
Audit:
Period:
September 30, 2013
G7 Holdings Inc. D/B/A Garbageman.com
March 2012 to September 2013
This report is the result of a scheduled audit of the Roll-Off Fee Returns for G7 Holdings Inc. D/B/A
Garbageman.com, (Garbageman.com).
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.
Garbageman.com has been operating in the City of Miami Beach since October2010. Their line of
business is junk removal, debris removal and cleaning services.
BACKGROUND
Previously, Internal Audit conducted an audit of Garbageman.com for period of October 2010 to
February 2012. Our audit report dated April9, 2012 produced an audit assessment of $2,027.27
which was subsequently paid by Garbageman.com.
OVERALL OPINION
Garbageman.com has not complied with the City Codes as it relates to reporting requirements for
Roll-off contractors. The following items were noted during our audit:
• Gross receipts in the amount of $44,077.95 were not reported resulting in the owing of
$9,164.80 in roll-off franchise fees and interest to the City.
• Garbageman.com has not filed an annual list of accounts, however a listing was provided
during the audit.
We are committed to providing excellent public service and safety to all who live, work, and play in our vibrant, tropical, historic community.
Internal Audit Report
G7 Holdings Inc. D/B/A Garbageman.com
September 30, 2013
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.
SCOPE
1. Review waste contractor's books and records to confirm that their billings were correct; their
gross receipts were correctly calculated and support the monthly franchise fee submitted to
the City.
2. Confirm that the private waste contractor timely sent the City the required reports in
adherence with the terms listed in the City Code.
3. Confirm that the private waste contractor is timely sending the required Monthly Report of
Gross Receipts along with their remittance to the City.
4. Confirm that the private waste contractor timely obtained their required annual business tax
receipt.
5. Confirm that the private waste contractor timely submitted their annual Certified Public
Accountant (CPA) Statements of Gross Receipts to the City (If applicable).
6. Confirm that the private waste contractor has obtained the required insurance in adherence
with Section 90-196 of the City Code.
7. Confirm that all monthly Roll-off Fee Return and were timely and correctly recorded in the
City's Financial System.
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 dump fees, fuel
surcharges, dry run, overload, extra month fees, relocation and waiting time charges should
be included in reported gross receipts.
Out of 18 months audited gross receipts, Garbageman.com did not file returns to the City for
the entire audited period. Garbageman.com collected franchise fees from their clients,
however it was not remitted to the City.
Therefore, the amount of $7,934.03 in franchise fees for roll-off waste removal services
within the city limits was not reported. Garbageman.com is not in compliance with the City
Code.
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Internal Audit Report
G7 Holdings Inc. D/B/A Garbageman.com
September 30, 2013
The following table summarizes audited gross receipts and the amount due from
Garbageman.com for our audit period:
2012 2013 TOTAL Mar-Dec. (Jan-Sept.)
Audited Gross $31,868.15 $12,209.80 $44,077.95 Receipts
Less Report 0.00 0.00 0.00 Gross Receipt
Unreported 31,868.15 12,209.80 44,077.95 Revenues
Roll-off fees 5,736.27 2,197.76 7,934.03 due
Interest 493.94 36.83 530.77
Late fees 400.00 300.00 700.00
Total Due $6,630.21 $2,534.59 $9,164.80
Recommendation(s)
Garbageman.com must file monthly reports for collected gross receipts as per the City code.
This includes but is not limited to dump fees, extra month fees, fuel surcharges, dry run,
overload, relocation and waiting time charges.
2. Finding -Required Reporting
Garbageman.com did not submit the following documents in accordance with the listed City
Code sections during the audit period:
Section 90-278 (3) states" The licensed Roll-off waste contractor shall provide the city
manager and the sanitation director with a current fist 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." Garbageman.com 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)
Garbageman.com must comply with the designated sections of the City Codes by submitting
reports to the City Manager and Sanitation Director listing of accounts on an annual basis.
EXIT CONFERENCE
Audit findings were e-mailed on September 26, 2013 to Garbageman.com. We confirmed their
agreement to our findings on September 30, 2013.
JJS: CD
Audit performed by Carmin Dufour
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Internal Audit Report
G7 Holdings Inc. D/B/A Garbageman.com
September 30, 2013
F:\obpi\$AUD\DOC012-13\REPORTS-\ GARBAGEMAN.COM. AUDIT FINAL REPORT.doc
cc: Eric Carpenter, Director of Public Works
Alberto Zamora, Sanitation Director
Patricia Walker, Chief Financial Officer
Greg Davis, G7 Holdings, Inc. D/B/A Garbageman.com (Owner)
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