J M Scaffolds of Florida Inc.MIAMI BEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division
TO:
INTERNAL AUDIT REPORT
VIA:
FROM:
Jimmy Morales, City Manager
Cintya Ramos, Budget and Perfor'lj~n~mprovement Director (1£..-..-
James J. Sutter, Internal Audito~)P D'
September 30, 2016 j'·~ DATE:
AUDIT:
PERIOD:
J&M Scaffolds of Florida, Inc.
August 2013 to July 2016
This report is the result of a scheduled audit of the Roll-Off Fee Returns for J&M Scaffolds of Florida,
Inc. (J&M)
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 twenty two companies currently possess business tax receipts to operate Roll-offs within
the City's boundaries. In return, they are required to abide by the terms outlined in the City Code. This
includes the remittance of franchise fees equaling 18% of Miami Beach gross receipts to the City's
Finance Department by the end of the subsequent month, filing various reports, maintaining sufficient
insurance, etc.
J&M has been in business since 1965. Their majority line of business is the rental of scaffolds and
other construction equipment. In addition, J&M provides roll-offwaste service as a supplemental line of
business.
BACKGROUND
Previously, Internal Audit conducted an audit of J&M for period of April 2010 to July 2013. Our audit
report dated September 7, 2013 produced an audit assessment of $772.69 which was subsequently
paid by J&M.
OVERALL OPINION
J&M 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 $61,133.26 were not reported. Therefore, J&M owes the City
$18,036. in franchise fees. (including interest and penalties)
• J&M 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 to all who live, work, and play m our vibrant, tropical, historic community.
Internal Audit Report
J&M Scaffolds of Florida, Inc.
September 30, 2016
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 RESPONSES
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 36 months audited period, J&M collected gross
receipts in the amount of $199,086.50 for services rendered within the City of Miami Beach and
reported $137,953.24 to the City. Therefore, J&M underreported the amount of $61,133.26 to
the City. Upon examination of invoices, we discovered J&M incorrectly entered gross receipts
in the amount of $61,133.26 into another company named A.E.S Portable Sanitation, Inc. which
is operated by the same management. These revenues were not reported to the City.
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Internal Audit Report
J&M Scaffolds of Florida, Inc.
September 30, 2016
The following table summarizes audited gross receipts and the amount due from J&M for our
audit period:
2013 2014 2015 2016 TOTAL
Jan-Dec. Jan-Dec. Jan-Dec. Jan-Jul.
Audited
Gross $9 972.41 $60 536.59 $90 901.35 $37 676.15 $199 086.50
l,.ess Report
Gross 7 905.40 45 576.04 56 745.90 27 725.90 137 953.24
Unreported
Revenues (2 067.01) (14 960.55) (34 155.45) (9 950.25) (61 133.26)
Roll-off fees
due 372.06 2 692.90 6147.98 1 791.05 11 003.99
Interest 123.02 603.68 921.80 73.52 1 722.01
Late fees 186.03 1 346.45 3 073.99 $703.53 5 310.00
Total Due $681.11 $4 643.03 $10 143.76 $2 568.10 $18 036.00
2. Finding -Required Reporting
J&M 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 Manager 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 dumpster as per account and the address serviced by each Roll-off
container or dumpster. J&M 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)
J&M must remit the amount of $18,036. in franchise fees relating to the unreported gross receipts.
Going forward, J&M must obtain a business tax receipt for A.E.S Portable Sanitation, lnc.in order to
operate within the City of Miami Beach. In addition, A.E.S Portable Sanitation, Inc. will file monthly
reports with supporting revenues earned on a monthly basis. Furthermore, J&M 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 September 22, 2016 to J&M. We confirmed their agreement to our
findings.
Page 3 of 4
Internal Audit Report
J&M Scaffolds of Florida, Inc.
September 30, 2016
JJS: CD
Audit performed by Carmin Dufour
F:\obpi\$AUD\DOC015-16\ AUDIT FINAL REPORT J&M .doc
cc: Eric Carpenter, Director of Public Works
Alberto Zamora, Sanitation Director
Allison Williams, Chief Financial Officer
Vivian Antelo, Comptroller for J&M
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