Great Waste Recycling Services, LLCMIAMI BEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
DATE:
Jimmy L. Morales, City Manager
John Woodruff, Budget and PerfoA.a ce lm_provement Director e
James J. Sutter, Internal Auditor 7~
February 26, 2015
AUDIT:
PERIOD:
Great Waste & Recycling Service, LLC.
March 2012 to December 2014
This report is the result of a scheduled audit of the Roll-Off Fee Returns for Great Waste & Recycling,
LLC. (Great Waste)
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.
Great Waste has been operating in the City of Miami Beach since June 2010. Their line of business is
the rental of Roll-offs for waste haulers.
BACKGROUND
Internal Audit performed an audit of Great Waste for the period of October 2010 to February 2012.
Our audit dated May 14, 2012 produced an audit assessment of $659.59 which was paid by Great
Waste. This was attributed to Great Waste not reporting roll-off revenues to the City.
OVERALL OPINION
Great Waste did not comply with certain reporting provision sections in the City Code during the audit
period. The following items were noted during our audit:
• Gross receipts in the amount of $324,790.10 were not reported for the entire audit period.
Therefore, Great Waste owes the City $67,346.66 in franchise fees. (including interest and late
filing charges)
• Great Waste has not filed list of accounts, however a listing of customer names was provided
during the audit.
We are committed to providing excellent public service and safety fa all who live, work, and play in our vibrant, tropical, historic community.
Internal Audit Report
Great Waste & Recycling Service, LLC.
February 26, 2015
• Great Waste has submitted the certificate of liability insurance.
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 fuel /environmental surcharge,
overload, delivery, dry run, tire surcharge, disposal, and live load wait time, should be included
in reported gross receipts. For the entire 34 months audited period, Great Waste collected
revenues and franchise fees for services rendered within the City of Miami Beach and failed to
file Roll-off Fee Returns. For the same period, Great Waste did not report to the City of Miami
Beach $324,790.10 in gross receipts resulting in franchise fees due for the amount of
$58,462.22. The following table summarizes audited gross receipts and the amount due from
Great Waste for our audit period:
Page 2 of 4
Internal Audit Report
Great Waste & Recycling Service, LLC.
February 26, 2015
2012
Mar-Dec.
Audited
Gross $63 397.94
Less Report
Gross 0.00
Unreported
Revenues (63 397.94)
Roll-off fees
due 11411.63
Interest 2 593.40
Late fees 500.00
Total Due $14 505.03
2. Finding -Required Reporting
2013 2014 TOTAL
Jan-Dec. (Jan.-Dec.)
$115 387.16 $146 005.00 $324 790.10
0.00 0.00 0.00
(115 387.16) (146 005.00) (324 790.1 0)
20 769.69 26 280.90 58 462.22
3 214.30 1 376.74 7 184.44
600.00 $600.00 1 700.00
$24 583.99 $28 257.64 $67 346.66
Great Waste 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 contractor shall provide the City Managerwith 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 dumpster as per account and the address serviced by each Roll-off
container or dumpster. Great Waste has not provided the City Manager 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 or dumpster as per account and the address serviced by each Roll-off
container or dumpster. However, a listing of customer names was provided during the audit.
Recommendation (s)
Great Waste must remit the amount of $67,346.66 for franchise fees relating to the unreported gross
receipts. Going forward, monthly reports with supporting revenues earned should be filed on a monthly
basis. If Great Waste continues not to pay the City of Miami Beach the franchise fees collected from
service addresses within the City, it may result in the termination of their Business Tax Receipt. In
addition, Great Waste must comply with the designated sections of the City Codes by submitting listing
of accounts to the City Manager and the Sanitation Director.
EXIT CONFERENCE
Audit findings were e-mailed on February 24, 2015 to Mr. Carlo Piccinonna (Owner of Great Waste). We
communicated with Mr. Piccinonna on February 24, 2015 and he acknowledged that Great Waste will pay
the City. We informed Mr. Piccinonna that Finance will issue an invoice for payment upon receipt of this
report.
Page 3 of4
Internal Audit Report
Great Waste & Recycling Service, LLC.
February 26, 2015
JJS: CD
Audit performed by Carmin Dufour
F:\obpi\$AUD\DOC014-15\REPORT-\GREAT WASTE & RECYCLING SERVICE,LLC. FINAL REPORT.doc
cc: Eric Carpenter, Director of Public Works
Alberto Zamora, Sanitation Director
Patricia Walker, Chief Financial Officer
Carlo Piccinonna, Great Waste & Recycling Service, LLC. (Owner)
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