OIG No. 20-05: Audit of Building Department Permit Fee SurchargesJoseph M. Centorino, Inspector General
February 24, 2020
TO: Honorable Mayor and Members of the City Com
FROM: Joseph Centorino, Inspector General
RE: Building Department Permit Fee Surcharges Audit
OIG Audit No. 20-05
Executive Summary
Attached is the Office of the Inspector General's audit of the Building Department's compliance
with three (3) tested permit fee surcharges as defined in the Florida Statutes, the Miami-Dade
County Code and/or the Miami Beach City Code for the audit period of July 1, 2016 through
September 30, 2018. Based upon the results of the audit, it was noted that certain procedures
and internal controls require enhancements due to the following identified deficiencies:
1. Permit fee surcharges associated with Florida Statute Section 553.721 were incorrectly
calculated resulting in an additional amount of $105,113.97 due to the Department of
Community Affairs (DCA).
2. Permit fee surcharges associated with Florida Statute Section 468.631 were incorrectly
calculated resulting in an additional amount of $86,306.42 due to the Florida Department
of Business and Professional Regulation (DBPR).
3. Seventeen (17) of the eighteen (18) tested quarterly permit fee surcharge payments due
to the DCA and the DBPR or 94% were not remitted timely in accordance with Florida
Statute Sections 553.721 and 468.631.
4. Monthly permit fee surcharge payments due to Miami-Dade County were not remitted
timely thereby resulting in the incorrect deduction of $4,203.89 in offered discounts.
5. City Code Section 14-70 (1) contains a permit fee surcharge rate that differs from the
stipulated rate in Florida Statute Section 553.721.
We would like to personally thank Building and Finance Department staff for their cooperation
and assistance during this audit process.
OFFICE OF THE INSPECTOR GENERAL, City of Miami Beach
1130 Washington Avenue, 6'h Floor, Miami Beach, FL 33139
Tel: 305 .673.7020 • Fax: 305.587.2401 • Hotline: 786.897.1111
Email: CityofMiamiBeachOIG@miamibeachfl.gov
Website: www.mbinspectorgeneral.com
Joseph M. Centorino, Inspector General
TO: Honorable Mayor and Members of the City Commission
FROM: Joseph Centorino, Inspector General
DATE: February 24, 2020
AUDIT: Building Department Permit Fee Surcharges Audit
OIG Audit No. 20-05
PERIOD: July 1, 2016 through September 30, 2018
FINAL AUDIT REPORT
This report is the result of an audit conducted to review the City Building Department's compliance
with three (3) tested permit fee surcharges as defined in the Florida Statutes, the Miami-Dade
County Code and/or the Miami Beach City Code.
INTRODUCTION
The 1998 Legislature adopted the Florida Building Code Study Commission's recommendations
and amended Chapter 553, Florida Statutes, Building Construction Standards, to create a single
minimum standard building code that is enforced by local governments. As of March 1, 2002, the
Florida Building Code, which is developed and maintained by the Florida Building Commission,
supersedes all local building codes. The Florida Building Code is updated every three (3) years
and may be amended annually to incorporate interpretations and clarifications.
The Florida Building Code incorporates all building construction related regulations for public and
private buildings in the State of Florida other than those specifically exempted. In addition to
providing standardization of the design, construction and compliance processes, it establishes
regulations for the safety, health and general welfare of building occupants.
During the 2010 legislative session, a proposal was made to better define the permitting fee and
to make the collection process simpler. A new fee formula was created based on the amount of
fees collected for the enforcement of the Florida Building Code. The fee is required by Florida
Statutes to be collected in part to the Department of Community Affairs (DCA) to fund the Florida
Building Commission, and, secondly, to fund the Building Code Administrators and Inspectors
Boards (BCAIB), both part of the Department of Business and Professional Regulation (DBPR).
These two (2) parts of the overall fee are separate and distinct fees (DCA and DBPR) and must
be remitted separately to the two (2) agencies using the proper method and format established
by each.
The unit of government (City of Miami Beach Building Department) responsible for collecting a
permit fee, shall collect the surcharge and remit the funds collected to the department. The unit
of government is required to retain ten percent ( 1 0%) of the surcharges collected for a specific
purpose: to "fund the participation of building departments in the national and state building code
adoption processes and to provide education related to enforcement of the Florida Building Code".
Final Audit Report
Build ing Department Permit Fee Surcharges Audit
February 24, 2020
In addition to the State permit fee surcharges, as per Miami-Dade County Code Section 8-12,
prior to the issuance of any building permit pursuant to the Building Code, including any premise
permit, each building official for Miami-Dade County or any mun icipality shall assess a code
administration fee in the amount of sixty cents ($0.60) per one thousand dollars ($1 ,000.00) or
fractional value of the work to be done under the permit. This code administration fee must be in
addition to and not in derogation of other fees and costs that may be payable as a condition of
obtaining the permit and shall be nonrefundable.
OVERALL OPINION
Based on the results of this audit, it was noted that certain procedures and internal controls require
enhancements due to the following deficiencies:
1. Permit fee surcharges associated with Florida Statute Section 553.721 were incorrectly
calculated resulting in an add itional amount of $105,113 .97 due to the Department of
Community Affairs (DCA).
2. Permit fee surcharges associated with Florida Statute Section 468.631 were incorrectly
calculated resulting in an additional amount of $86,306.42 due to the Florida Department
of Business and Professional Regulation (DBPR).
3. Seventeen (17) of the eighteen (18) tested quarterly permit fee surcharge payments due
to the DCA and the DBPR or 94% were not remitted timely in accordance with Florida
Statute Sections 553.721 and 468.631.
4. Monthly permit fee surcharge payments due to Miami-Dade County were not remitted
timely thereby resulting in the incorrect deduction of $4,203.89 in offered discounts.
5. City Code Section 14-70 ( 1) contains a permit fee surcharge rate that differs from the
stipulated rate in Florida Statute Section 553.721.
SCOPE, OBJECTIVES, AND METHODOLOGY
The scope of this audit was to determine whether the City complied with selected provisions
established in Chapter 468 Part XII "Building Code Administrators and Inspectors", Chapter 553
Part IV "Florida Building Code" of the Florida Statutes and Miami-Dade County Code Section 8-
12; and to determine whether the permit fee surcharge amounts were accurately collected and
timely remitted.
In general, the audit focused on the following objectives:
a. To determine whether the City's Building Department complied with the provisions set
forth in Chapter 553 Part IV, "Florida Building Code", Section 553.721, to collect the
surcharge (1 %) on all permit fees associated with the enforcement of the Florida Building
Code for the Professional Regulation Trust Fund, and to timely remit 90% to the
Department of Community Affairs on a quarterly basis.
b. To determine whether the City's Building Department complied with the provisions set
forth in Chapter 468 Part XII, "Building Code Administrators and Inspectors", Section
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February 24, 2020
468.631, to collect the surcharge (1.5%) on all permit fees associated with the
enforcement of the Florida Building Code and to timely remit 90% to the Department of
Business and Professional Regulation on a quarterly basis.
c. To determine whether the City's Building Department complied with Miami-Dade County
Code Section 8-12, to collect and to timely remit to Miami-Dade County, no later than the
fifteenth day of the month following the month of collection, the code administration fee in
the amount specified in the relevant departmental fee schedule established by a separate
implemented and approved order of the Board of County Commissioners (sixty cents
($0.60) per one thousand dollars ($1 ,000) or fraction value of the work to be done under
the permit using the new values per square foot).
d. To ensure that the permit fee surcharges collected by the City's Building Department were
properly recorded in the City's Financial System.
e. Other audit procedures as deemed necessary.
The audit methodology included the following:
• Reviewed applicable provisions of agreements, City policies and procedures;
• Interviewed and made inquiries of staff to gain an understanding of internal controls,
assess control risk, and plan audit procedures;
• Performed substantive testing consistent with the audit objectives, including, but not
limited to, examination of applicable transactions and records;
• Drew conclusions based on the results of testing, made corresponding recommendations,
and obtained auditee responses and corrective action plans; and
• Performed other audit procedures as deemed necessary.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
1. Finding: PERMIT FEE SURCHARGES ASSOCIATED WITH FLORIDA STATUTE
SECTION 553. 721 WERE INCORRECTLY CALCULATED RESULTING IN AN
ADDITIONAL AMOUNT OF $105, 113.97 DUE TO THE DEPARTMENT OF COMMUNITY
AFFAIRS (DCA)
Part IV, "Florida Building Code", Florida Statute Section 553.721 states, "In order for the
Department of Business and Professional Regulation to administer and carry out the
purposes of this part and related activities, there is created a surcharge assessed at the
rate of 1 percent (Effective July 1, 2017, the permit fee surcharge was reduced from 1.5%
to 1%) of the permit fees associated with enforcement of the Florida Building Code as
defined by the uniform account criteria and specifically the uniform account code for
building permits adopted for local government financial reporting pursuant to s. 218.32.
The minimum amount collected on any permit issued shall be $2. The unit of government
responsible for collecting a permit fee pursuant to s. 125.56(4) or s. 166.201 shall collect
the surcharge and electronically remit the funds collected to the department on a quarterly
calendar basis for the preceding quarter and continuing each third month thereafter. The
unit of government shall retain 10 percent of the surcharge collected to fund the
participation of building departments in the national and state building code adoption
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Final Audit Report
Building Department Permit Fee Surcharges Audit
February 24, 2020
processes and to provide education related to enforcement of the Florida Building Code."
Office of Inspector General (OIG) staff determined that the EnerGov system {the City's
permitting and licensing software system) generated the reports used by the Building
Department to calculate the amounts to be remitted to the Florida Department of
Community Affairs (DCA). The system incorrectly pulled the information by the issuance
date instead of the collection date, which was confirmed by the City's Information
Technology Department. Yet, Florida Statute Section 553.721 summarized above
requires the Building Department to remit any permit fee surcharges collected in the prior
quarter by the end of the following quarter.
By statute, a property owner desiring to perform work under the Florida Building Code is
required to pay the associated permit fee surcharges along with other fees prior to the
issuance of the permits. The State of Florida surcharge fees mandated by statute are
non-refundable.
Remitting the surcharges on the permit issuance dates, which were frequently months
after the monies were collected, resulted in the DCA not timely receiving the monies due.
In addition, in cases where the permit was never issued, the DCA would not receive any
monies even though the permit fee surcharges had been collected.
The Building Department relied solely on the accuracy and completeness of this EnerGov
system report in calculating the amount of the permit fee surcharges to remit. Additional
testing performed on these reports, as well as on the Building Department's corresponding
quarterly payments, identified the following deficiencies, which resulted in a total of
$105,113.97 being owed to the DCA (as summarized per quarter in the table below):
a. The EnerGov reports mistakenly excluded elevator permit surcharge fees even
though the City is charging and collecting the appropriate fees for such permits.
b. The $32,951.36 payment for the period covering April 1, 2018 through June 30,
2018 due on September 30, 2018 had not been remitted as of October 28, 2019.
c. The payments calculated by the Building Department's Financial Analyst I were
not sufficiently reviewed before management approved the corresponding
issuance of the City checks.
d. Although a Munis system (the City's Enterprise Resource Planning system) report
could be generated based on collections, it was not used because the two (2)
different permit fee surcharges collected pursuant to Florida Statutes Sections
553.721 and 448.631 were commingled in the same general ledger account (601-
7004-229213) and could not be easily separated.
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February 24, 2020
AMOUNT
COLLECTED
AS PER 10% AMOUNT UNDER
PERIOD QUARTER ENERGOV RETAINED PAID OR (OVER)
7/1/2016-9/30/2016 01 FY 2017 $ 29,089.69 $ (2,908.97) $ 15,973.33 $ 10,207.39
10/1/2016-12/31/2016 02 FY 2017 $ 32,222.92 $ (3,222.29) $ 20,553.83 $ 8,446.80
1/1/2017-3/31/2017 03FY2017 $ 31,693.30 $ (3, 169.33) $ 29,818 .14 $ (1 ,294.17)
4/1/2017-6/30/2017 04FY2017 $ 36,918.39 $ (3,691.84) $ 26,373.35 $ 6,853.20
7/1/2017-9/30/2017 01 FY 2018 $ 34,493.07 $ (3,449.31) $ 17,053.95 $ 13,989.81
10/1/2017-12/31/2017 02 FY 2018 $ 30,470.18 $ (3,047.02) $ 14,339.43 $ 13,083.73
1/1/2018-3/31/2018 03FY2018 $ 27,924.69 $ (2,792.47) $ 11,378.00 $ 13,754.22
4/1/2018 -6/30/2018 04 FY 2018 $ 36,612.62 $ (3,661.26) $ $ 32,951.36
7/1/2018 -9/30/2018 01 FY 2019 $ 29,531.89 $ (2,953.19) $ 19,457.08 $ 7,121 .62
TOTAL $ 288,956.75 $ (28,895.68) $ 154,947.11 $ 105,113 .97
Recommendation( s ):
The Building Department should make the necessary journal entry to include the
$105,113.97 in its next quarterly payment to the DCA. The Building Department should
request that the Finance Department create another general ledger account so that the
two (2) permit fee surcharges can be recorded separately. Once completed, the Building
Department should use the Munis system report to help ensure that future permit
payments are remitted accurately based on the collection date and not the issuance date.
Also, staff's calculations should be more closely reviewed by Building Department
management prior to requesting the issuance of the corresponding City checks to help
ensure their accuracy. Finally, the Building Department should perform its own analysis
to determine if additional monies are owed to the DCA from transactions occurring
between October 1, 2018 and the present.
Management Response (Building Department):
Various factors contributed to the underpayment of this surcharge to the DCA including
reporting issues as mentioned in the audit findings. Reports had mistakenly excluded
surcharges collected by the elevator division and other fees that were not captured in the
report due to ERP conversion, during this audited time period fees collected were not
mapped to the correct fee names therefore, inadvertently excluding from the report fees
that were to be remitted to DCA. The Building Department agrees with the
recommendations of this audit, and in fact had already implemented the creation of
another general ledger account to allow surcharges to be recorded separately so that
Munis can be used. This change to Munis allows for an accurate & timely remittance of
the surcharges. Additionally, we have re-assigned this responsibility to someone new in
order to improve the timeliness and quality of this work and it is being reviewed at a high
level by the Building Department Assistant Director. Finally, the Building Department is in
the process of reconciling the surcharges account from 2003 to present to determine if
additional monies are owed to the DCA.
Implementation Date (Building Department):
-A check request to remit the $105,113.97 will be completed by February 14, 2020.
-The additional account to separate the two (2) permit fee surcharges and using the Munis
system to generate reports for remitting was effective on October 1, 2019.
-Analysis to determine if additional monies are owed to the DCA from transactions from
July 1, 2003 through present {less the amount remitted from this audit) will be completed
by February 14, 2020.
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Final Audit Report
Building Department Permit Fee Surcharges Audit
February 24, 2020
2. Finding: PERMIT FEE SURCHARGES ASSOCIATED WITH FLORIDA STATUTE
SECTION 468.631 WERE INCORRECTLY CALCULATED RESULTING IN AN
ADDITIONAL AMOUNT OF $86,306.42 DUE TO THE FLORIDA DEPARTMENT OF
BUSINESS AND PROFESSIONAL REGULATION (DBPR)
Part XII, "Building Code Administrators and Inspectors", Florida Statute Section 468.631
entitled Building Code Administrators and Inspectors Fund states: "(1) This part shall
be funded through a surcharge, to be assessed pursuant to s. 125.56(4) or s. 166.201 at
the rate of 1. 5 percent of all permit fees associated with enforcement of the Florida Building
Code as defined by the uniform account criteria and specifically the uniform account code
for building permits adopted for local government financial reporting pursuant to s. 218.32.
The minimum amount collected on any permit issued shall be $2. The unit of government
responsible for collecting permit fees pursuant to s. 125.56 or s. 166.201 shall collect such
surcharge and shall remit the funds to the department on a quarterly calendar basis
beginning not later than December 31, 2010, for the preceding quarter, and continuing
each third month thereafter; and such unit of government shall retain 10 percent of the
surcharge collected to fund the participation of building departments in the national and
state building code adoption processes and to provide education related to enforcement
of the Florida Building Code."
OIG staff determined that the EnerGov system report used by the Building Department to
calculate the amount to be remitted to the Florida Department of Business and
Professional Regulation (DBPR) incorrectly pulled the information by the issuance date
instead of the collection date, as confirmed by the City's Information Technology
Department. Yet, Florida Statute Section 468.631 summarized above requires the
Building Department to remit any permit fee surcharges collected in the prior quarter by
the end of the following quarter.
By statute, a property owner desiring to perform work under the Florida Building Code is
required to pay the associated permit fee surcharges along with other fees prior to the
issuance of the permits. The State of Florida surcharge fees mandated by statute are
non-refundable.
Remitting the surcharges based on the permit issuance dates, which were frequently
months after collection, resulted in the DBPR not timely receiving the monies due. In
addition, in cases where the permits were never issued, the DBPR would not receive any
monies, even though the permit fee surcharges had been collected.
The Building Department relied solely on the accuracy and completeness of this EnerGov
report in calculating the amount of the permit fee surcharges to remit. Additional testing
performed on these reports as well as on the Building Department's corresponding
quarterly payments, identified the following additional deficiencies which resulted in a total
of $86,306.42 being owed to the DBPR (as summarized per quarter in the table below):
a. The EnerGov reports mistakenly excluded elevator permit surcharge fees even
though the City is charging and collecting the appropriate fees for such permits.
b. The $28,970.38 payment due for the period covering October 1, 2016 through
December 31, 2016 due on March 31, 2017 had not been remitted as of October
28, 2019.
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Building Department Permit Fee Surcharges Audit
February 24, 2020
c. The surcharge amounts for the period covering July 1, 2017 through September
30, 2017 and October 1, 2017 through December 31, 2017 were incorrectly
calculated using 1% instead of 1.5%.
d. Although a Munis system report could be generated based on collections, it was
not used because the two (2) different permit fee surcharges pertaining to Florida
Statute Sections 553.721 and 448.631 were commingled in the same general
ledger account (601-7004-229213) and could not be easily separated.
AMOUNT
COLLECTED
AS PER 10% AMOUNT UNDER
PERIOD QUARTER ENERGOV RETAINED PAID OR (OVER)
7/1/2016-9/30/2016 Q1 FY2017 $ 29,089.04 $ (2,908.90) $ 15,973.33 $ 10,206.8 1
10/1/2016-12/31/2016 Q2 FY 2017 $ 32,189.31 $ (3,218.93) $ $ 28,970.38
1/1/2017-3/31/2017 Q3 FY 2017 $ 31,692.41 $ (3,169.24) $ 29,818.14 $ (1 ,294.97)
4/1/2017 -6/30/2017 Q4 FY 2017 $ 36,843.06 $ (3,684.31) $ 26,373.35 $ 6,785.40
7/1/2017-9/30/2017 Q1 FT2018 $ 29,610.55 $ (2,961.06) $ 17,053.95 $ 9,595.55
10/1/2017-12/31/2017 Q2 FY 2018 $ 21,619.10 $ (2,161.91) $ 14,339.43 $ 5,117.76
1/1/2018-3/31/2018 Q3 FY 2018 $ 21,940.77 $ (2,194.08) $ 16,234.49 $ 3,512.20
4/1/2018 -6/30/2018 Q4 FY 2018 $ 44,615.92 $ (4,461.59) $ 26,429.76 $ 13,724.57
7/1/2018 -9/30/2018 Q1 FT 2019 $ 42,242.44 $ (4,224.24) $ 28,329.47 $ 9,688.73
TOTAL $ 289,842.60 $ (28,984.26) $ 174,551.92 $ 86,306.42
Recommendation( s ):
The Building Department should make the necessary journal entry to include the
$86,306.42 in the next quarterly payment to the DBPR. The Building Department should
request that the Finance Department create another general ledger account so that the
two (2) permit fee surcharges can be recorded separately. Once completed, the Building
Department should use the Munis system report to help ensure that future permit
payments are remitted accurately based on the collection date and not the issuance date.
Also, staff's calculations should be more closely reviewed by Building Department
management prior to requesting the issuance of the corresponding City checks to help
ensure their accuracy. Finally, the Building Department should perform their own analysis
to determine if additional monies are owed to the DBPR from transactions occurring
between October 1, 2018 and the present.
Management Response (Building Department):
Various factors contributed to the underpayment of this surcharge to the DBPR including
reporting issues as mentioned in the audit findings. Reports had mistakenly excluded
surcharges collected by the elevator division and other fees that were not captured in the
report due to ERP conversion, during this audited time period fees collected were not
mapped to the correct fee names therefore, inadvertently excluding from the report fees
that were to be remitted to DBPR. The Building Department agrees with the
recommendations of this audit, and in fact had already implemented the creation of
another general ledger account to allow surcharges to be recorded separately so that
Munis can be used. This change to Munis allows for an accurate & timely remittance of
the surcharges. Additionally, we have re-assigned this responsibility to someone new in
order to improve the timeliness and quality of this work and it is being reviewed at a high
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Building Department Permit Fee Surcharges Audit
February 24, 2020
level by the Building Department Assistant Director. Finally, the Building Department is in
the process of reconciling the surcharges account from 2003 to present to determine if
additional monies are owed to the DBPR.
Implementation Date (Building Department):
-A check request to remit the $86,306.42 will be completed by February 14, 2020.
-The additional account to separate the two (2) permit fee surcharges and using the Munis
system to generate reports for remitting was effective on October 1, 2019.
-Analysis to determine if additional monies are owed to the DBPR from transactions from
July 1, 2003 through present (less the amount remitted from this audit) will be completed
by February 14, 2020.
3. Finding: SEVENTEEN (17) OF THE EIGHTEEN (18) TESTED QUARTERLY PERMIT
FEE SURCHARGE PAYMENTS DUE TO THE DCA AND THE DBPR OR 94% WERE
NOT REMITTED TIMELY IN ACCORDANCE WITH FLORIDA STATUTES SECTIONS
553.721 AND 468.631
Both Part IV, "Florida Building Code", Section 553.721 and Part XII, "Building Code
Administrators and Inspectors", Section 468.631, entitled "Building Code Administrators
and Inspectors Fund", pertaining to permit fee surcharge payments, state that the unit of
government (City of Miami Beach Building Department) shall collect the surcharges and
remit the funds collected to the DCA and the DBPR respectively on a quarterly calendar
basis for the preceding quarter.
Using the dates that the checks were issued by the City's Finance Department as the
dates paid, the following was determined for the nine (9) tested quarterly permit fee
surcharge payments occurring during the audit period:
A. Permit fee surcharge payments to the DCA pertaining to Florida Statute Section
553.721 were remitted an average of 225 days after the due date including one (1)
payment that had not been remitted as of October 28, 2019.
Period Quarter Due Date Date Paid Days Late
7/1/2016-9/30/2016 Q1 FY2017 12/31/2016 4/10/2017 124
10/1/2016-12/31/2016 Q2 FY2017 3/31/2017 7/16/2018 472
1 /1 /20 17 -3/31 /20 17 Q3 FY2017 6/30/2017 7/16/2018 381
4/1/2017 -6/30/2017 Q4 FY2017 9/30/2017 7/16/2018 289
7/1/2017 -9/30/2017 Q1 FY2018 12/31/2017 7/16/2018 197
10/1/2017-12/31/2017 Q2 FY2018 3/31/2018 7/16/2018 107
1/1/2018-3/31/2018 Q3 FY2018 6/30/2018 7/16/2018 16
NOT PAID
as of
4/1/2018 -6/30/2018 Q4 FY2018 9/30/2018 10/28/2019 393
7/1/2018-9/30/2018 Q1 FT2019 12/31/2018 2/12/2019 43
Average 225
B. Permit fee surcharge payments to the DBPR collected pursuant to Florida Statute
Section 468.631 were remitted an average of 271 days after the due date including
one (1) payment that had not been remitted as of October 28, 2019.
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Building Department Permit Fee Surcharges Audit
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Period Quarter
7/1/2016-9/30/2016 01 FY2017
10/1/2016-12/31/2016 02 FY2017
1/1/2017-3/31/2017 03 FY2017
4/1/2017 -6/30/2017 04 FY2017
7/1/2017-9/30/2017 01 FY2018
10/1/2017-12/31/2017 02 FY2018
1/1/2018-3/31/2018 03 FY2018
4/1/2018 -6/30/2018 04 FY2018
7/1/2018-9/30/2018 01 FT2019
Due Date
12/31/2016
3/31/2017
6/30/2017
9/30/2017
12/31/2017
3/31/2018
6/30/2018
9/30/2018
12/31/2018
Date Paid Days Late
5/4/2017 124
NOT PAID
as of
10/28/2019 941
3/27/2018 270
3/27/2018 178
3/22/2018 81
3/22/2018 -9
9/24/2019 451
9/24/2019 359
2/12/2019 43
Average 271
Although seventeen (17) of the eighteen (18) tested payments (94%) occurring during the
audit period were remitted after the specified due dates, OIG staff was not aware of any
associated late charges levied by either the DCA or the DBPR.
Recommendation( s ):
The City's Building Department shou ld ensure that all future permit fee surcharge
payments are timely remitted.
Management Response (Building Department):
Prior to the audit, Building Department management had become aware of the
deficiencies in the timeliness of remitting these surcharges. Management made significant
efforts to work with the staff person responsible for this task in an effort to rectify the
deficiencies. The task was re-assigned in order to improve the quality and timeliness and
is now closely monitored by the Assistant Director to ensure that this lapse in production
does not happen again. Currently all surcharges are being remitted in an accurate and
timely manner, immediately within the following month of the preceding quarter.
Implementation Date (Building Department):
New staff was assigned to this responsibility on October 1, 2019 and all payments are
currently up-to-date.
4. Finding: MONTHLY PERMIT FEE SURCHARGE PAYMENTS DUE TO MIAMI-DADE
COUNTY WERE NOT REMITTED TIMELY THEREBY RESULTING IN THE
INCORRECT DEDUCTION OF $4,203.89 IN OFFERED DISCOUNTS
As per Miami-Dade County Code Section 8-12, prior to the issuance of any building permit
pursuant to the Building Code, including any premise permit, each building official for
Miami-Dade County or any municipality shall assess a code administration fee in the
amount of sixty cents ($0.60) per one thousand dollars ($1 ,000.00) or fractional value of
the work to be done under the permit. This code administration fee must be in addition to
and not in derogation of other fees and costs that may be payable as a condition of
obtaining the permit and is nonrefundable.
Any and all code administration fees collected by municipalities on behalf of Miami-Dade
County, shall be paid to the Miami-Dade County Finance Department not later than the
151h day of the following month of collection. If a governmental authority (City of Miami
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Beach Building Department) remits the funds on or before the due date set forth, such
authority shall be entitled to retain a portion of the remittance due to Miami-Dade County,
which represents its cost of collection of this code administration fee, not to exceed 1.5
percent of the total remittance due for that period. In the event that the remittance is not
made when due, the governmental authority shall remit to Miami-Dade County the entire
balance of fees collected pursuant to this section to defray Miami-Dade County's
additional costs incurred in connection with that government's delay in remitting the
amount.
Using the dates that the checks were issued by the City's Finance Department as the
payment dates, it was determined that the Building Department remitted fourteen (14) of
the 27 tested monthly permit fee surcharge payments (52%) after the specified due dates
ranging from a low of five (5) to a high of 41 days. Yet, the City incorrectly retained the
1.5% discount allowed by Miami-Dade County to defray the City's costs of collection (a
total of $5,997.89), although said discount was to be forfeited since the payments were
remitted late, as shown in the table below.
As of the completion of the audit fieldwork, it was noted that only two (2) invoices have
been received from Miami-Dade County as it relates to the incorrect 1.5% discount
claimed by the City. Both invoices totaling $1,794 have been paid; however, no additional
payments or invoices related to the remaining $4,203.89 in discounts incorrectly taken
were found.
CMB CMB DATE CMB SURCHARGE
CHECK DUE CHECK DIFFERENCE CHECK AMOUNT RETAINED
PERIOD NUMBER DATE DATE (2-1) AMOUNT COLLECTED 1.5% DIFFERENCE
July 1, 2016-July31, 2016 82316 8/15/2016 8/23/2016 8 $ 23,441.21 $ 23,798.18 $ 356.97 ($356.97)
407096 10/25/2016 $ 42,486.68 ($647.01)
August 1, 2016 -August31, 2016 171 9/15/2016 11/18/20 16 40 $ 647.01 $ 43,133.69 $ 647.01 $647.01
September 1, 2016-September 30,2016 172 10/15/2016 11/18/2016 34 $ 28,283.97 $ 28 ,714.69 $ 430.72 ($430.72)
October 1, 2016-October 31,2016 189 11/15/2016 11/29/2016 14 $ 74,864.98 $ 76 ,005.06 $ 1,140.08 ($1 ,140.08)
November 1, 2016-November 30, 2016 230 12/15/2016 12/21/2016 6 $ 41,343.18 $41,972.77 $ 629.59 ($629.59)
412264 3/28/2017 $ 23,507.71 ($357.99)
January 1, 2017-January 31 , 2017 4159 25 2/15/2017 7/7/2017 41 $ 357.99 $ 23,865.70 $ 357.99 $357.99
412458 4/4/2017 $ 18,217.20 ($277.72)
February 1, 2017-February 28 , 2017 415925 3/15/2017 7/7/2017 20 $ 277 .72 $ 18.494.92 $ 277.42 $277.72
March 1, 2017-March 31, 2017 413454 4/15/2017 4/27/2017 12 $ 19,392.92 $ 19,688.24 $ 295.32 ($295.32)
414772 6/6/2017 $ 33,593.92 ($511.58)
April1, 2017-April30, 2017 415925 5/15/2017 7/7/2017 22 $ 511.58 $ 34,105.50 $ 511.58 $511.58
August 1, 2017-August 31, 2017 1056 9/15/2017 9/28/2017 13 $ 27,117.20 $ 27,530.15 $ 412.95 ($412.95)
September 1, 2017-September 30 ,2017 1149 1 0/15/201 7 1 0/20/2017 5 $ 12,819.39 $ 13,014.61 $ 195.22 ($195.22)
December 1, 2017-December 31 , 2017 422191 1/15/2018 1/26/2018 11 $ 14,640.46 $ 14,863.41 $ 222.95 ($222.95)
January 1, 2018-January 31, 2018 423119 2/15/2018 2/22/2018 7 $ 18.463.23 $ 18,744.40 $ 281.17 ($281.17)
Februa ry 1, 2018-February28, 2018 424028 3/15/2018 3/20/2018 5 $ 15,689.16 $ 15,928.08 $ 238.92 ($238.92)
TOTAL $395,655.51 $399,859.40 $ 5,997.89 ($4,203.89)
Recommendation( s ):
The Building Department should timely remit the Miami-Dade County permit fee
surcharges so that the City can retain the 1.5% discount addressed in Miami-Dade County
Code Section 8-12. In addition , the Building Department should inquire with Miami-Dade
County concerning the $4,203.89 in incorrect discounts taken. The Building Department
should ensure that future discounts are not taken on any payments remitted after the due
date. Finally, the Building Department should perform its own analysis to determine if
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Final Audit Report
Building Department Permit Fee Surcharges Audit
February 24, 2020
additional discounts were taken on any late payments remitted to Miami-Dade County
between October 1, 2018 and the present.
Management Response (Building Department):
The process for remitting the surcharge to the County includes prior to requesting a check
from the City's Finance Department, requesting an invoice from the County for the amount
collected per the surcharge report. Running the surcharge report too soon following the
end of the collection month often caused shortages in the actual collection amount
because the financial system had not yet posted all the collections. Additionally, the time
between receiving the invoice from the County and the turnaround from Finance entering
the invoice, necessary approvals, and designated check printing days, often created a
delay in the actual day the check was printed. The County now has an online payment
system which allows instant payment after the final City approval, therefore allowing us to
meet the deadline of the 151h every month.
Implementation Date (Building Department):
Online payments began in April 2018 and since then all remittance to the county have
been on time.
5. Finding: CITY CODE SECTION 14-70 (1) CONTAINS A PERMIT SURCHARGE FEE
RATE THAT DIFFERS FROM THE STJPULA TED PERCENTAGE IN FLORIDA
STATUTE SECTION 553.721
Miami Beach City Code Section 14-70 (1) states, "A Department of Business and
Professional Regulation/Florida Building Commission surcharge will be added to all
permit fees associated with enforcement of the Florida Building Code for the
Professional Regulation Trust Fund as per F.S. § 553.721. This amount is
nonrefundable.". Furthermore, Appendix A -Fee Schedule 14-70 ( 1) states, "Pursuant to
Florida Statutes § 553. 721, in order for the department of business and professional
regulation to administer the Florida Building Code, there is created a surcharge to be
assessed at the rate of 1. 5 percent of the permit fee associated with enforcement of the
Florida Building Code. The minimum amount collected on any permit issued shall be
$2.00."
However, the permit fee surcharge rate paid to the Florida Building Commission was
reduced from 1.5% to 1%, effective July 1, 2017. Although the Building Department is
charging customers properly and remitting the correct amount, City Code Section 14-70
(1) needs to be revised accordingly.
Recommendation( s ):
The Building Department, together with the City Attorney's Office, should prepare the
stated City Code revision and present it to the City Commission for approval. It is further
recommended that the Section 14-70 ( 1) revision only reference the rates charged in
Florida Statute Section 553.721 rather than specify the current rate, so that it does not
have to be amended every time that it changes in the future.
Management Response (Building Department):
The Building Department agrees with the recommendation and is working with a
consultant hired by the City to review and revise as needed all fees and fee descriptions
in the City Code -Appendix A -Fee Schedule.
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Final Audit Report
Building Department Permit Fee Surcharges Audit
February 24, 2020
Implementation Date (Building Department):
Currently there is a fee schedule study being done by an independent consu ltant that may
bring about several changes to the City Code-Appendix A-Fee Schedule. We will include
this change as part of the overall changes to the City Code-Appendix A-Fee Schedule.
EXIT CONFERENCE
An exit conference was held in the Building Director's office on December 13, 2019. Participants
included Ana Salgueiro (Building Director), Natasha Diaz (Building Assistant Director), Joseph
Centorino (Inspector General), Mark Coolidge (Chief Auditor) and Jessica Romero (Internal
Auditor). Management responses were solicited and included above. All parties agreed as to the
contents of this report.
\\miamibeach.gov\files\OBPI\$01G\INTERNAL AUDIT FILES\DOC19-20\REPORTS -FINAL\BUILDING DEPT PERMIT FEE
SURCHARGE AUDIT FINAL REPORT 2-24-2020 with OIG LOGO.docx
cc: Jimmy L. Morales, City Manager
Eric Carpenter, Assistant City Manager
Ana Salgueiro, Building Director
John Woodruff, Chief Financial Officer
Audit conducted by: Jessica Romero, Internal Auditor
Audit reviewed by: Mark D. Coolidge, Chief Auditor
OFFICE OF THE INSPECTOR GENERAL, City of Miami Beach
1130 Washington Avenue , 6th Floor, Miami Beach, FL 33139
Te l: 305.673.7020 • Fax : 305.587.2401 • Hotline: 786.897.1111
Email: CityofMiamiBeachOIG@miamibeachfl.gov
Website: www .mbinspectorgeneral.com
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