Waste Services U.S.AMIAMI BEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
Jorge M. Gonzalez, City Manager (l
Kathie G. Brooks, Budget and Perfor. 1a9ce Improvement Director f/j)
James J. Sutter, Internal Auditor.--,,.0e·
DATE:
AUDIT:
PERIOD:
May 7, 2010
Waste Services USA, Inc. (Waste Services)
December 2006 to November 2009
This report is the result of a scheduled audit of the roll off fee returns for Waste Services, Inc.
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.
Waste Service has had a business tax receipt to do business in the City of Miami Beach since 2000.
Approximately thirty companies currently possess business tax receipts to operate roll off 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.
Background
Previously, Internal Audit conducted an audit of Waste Services for period of January 2003 to
November 2006. A review of the company's invoices showed that franchise fees were charged and
collected throughout the audit period resulting in no additional tax assessment. Waste Service's
records showed that franchise fees were remitted timely to the City of Miami Beach.
OVERALL OPINION
Waste Services has not complied with certain provisions of the City Code's during the audit. The
following items were noted during audit:
• Gross receipts in the amount of $2,396.46 were not reported. Therefore, Waste Services
owed the City $431.36 in franchise fees which was immediately paid during the audit.
• Waste Services has submitted the certificate of liability insurance.
• Waste Services has not filed a list of accounts and the required CPA statement of gross
receipts.
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Internal Audit Report
Waste Services USA, Inc.
May 7, 2010
PURPOSE
The purpose of this audit is to determine whether all roll off waste contractor billings were correct,
and whether all City revenues were correctly calculated, received timely and accurately recorded by
the City, and the contractor was in compliance with designated sections of the City Code and related
Ordinances.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSE
1. Finding -Unreported Gross Receipts
City Code Section 90-221 defines gross receipts as "the entire amount of the fees collected
by the licensee, exclusive of taxes as provided by law, whether wholly or partially collected,
within the city, for solid waste removal and disposal". Therefore, all monies collected by the
roll off waste contractor from Miami Beach service addresses, including dumpster , dump
fees, load of trees, over load, rubbish removal and fuel surcharges should be included in
reported gross receipts.
Out of$ 681,388.14 audited gross receipts, Waste Services paid the City of Miami Beach
$113,566.55 in franchise fees for $678,991.68 in reported gross receipts. Waste Services
miscalculated the gross receipts reported to the City for the month of March 2009. As a
result, an additional amount of $2,396.46 in gross receipts was not reported for roll off
rentals. Waste Services did not report these gross receipts for the services performed within
the city limits in compliance with the City Code.
The following table summarizes the amount due from Waste Services for our audit period:
2006 2007 2008 2009 TOTAL
(Jan to Nov)
Audited Gross $8,300.00 $133,163.61 $339,808.07 $200,116.46 $681,388.14 Receipts
Less Report (8,300.00) (133, 163.61) (339,808.07) (197,720.00) (678,991.68) Gross Receipt
Under 0.00 0.00 0.00 2,396.46 2,396.46 reported
Roll-off fees 0.00 0.00 0.00 431.36 431.36
Interest 0.00 0.00 0.00 0.00 0.00
Total Due 0.00 0.00 0.00 $431.36 $431.36
Footnotes: On October, 2008 as requ1red pursuant to sect1on 90-278 of the C1ty Code,
the franchise fee paid to the city by its franchise Roll-offs contractors was raised
from 16% of the franchisee's total monthly gross receipts to 18% of said gross receipts.
Upon notification of our audit finding, Waste Services paid $431.36 for the unreported gross
receipts during the audit.
2. Finding -Required Reporting
Waste Services did not submit the following documents in accordance with the listed City
Code sections during the audit period:
a. Section 90-278 (3) states" The licensed Roll off waste contractor shall provide the city
manager and the sanitation director with a current list of the names and addresses of
each account, upon initial application and upon application for renewal of its business
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Internal Audit Report
Waste Services USA, Inc.
May 7, 2010
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." Waste Services 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.
b. Section 90-278 (4) states "The licensee shall on or before 30 days following the close
of its fiscal year deliver to the finance director and the city manager a statement of its
annual gross receipts generated from accounts within the city certified by an
independent certified public accountant reflecting gross receipts within the city for the
preceding fiscal year". Waste Services did not provide a statement of its annual gross
receipts generated from accounts within the city certified by an independent public
accountant during the audit period.
Effective October 1, 2008 the ordinance requires that contractors having an annual
gross receipts reported to the City over $200,000.00 shall, on or before 60 days following
the close of their fiscal year, deliver to the Finance Department a statement of annual
gross receipts generated from accounts within the city certified by an independent
certified public accountant reflecting gross receipts within the city for the preceding fiscal
year. The year 2008, Waste Services exceeded this threshold amount for requiring
certified statements of gross receipts.
Recommendation ( s)
Waste Services must comply with the designated sections of the City Codes and submit
timely lists of accounts, certified annual statements of gross receipt.
EXIT CONFERENCE
Audit findings were e-mailed on April 27, 2010 to Carol Marcus, Comptroller. We confirmed her
agreement to our findings on May 6, 2010.
JJS: CD
Audit performed by Carmin Dufour
F:\obpi\$AUD\DOC09-10\REPORTS-\WASTE SERVICES REPORT.doc
cc: Jorge Gomez, Assistant City Manager
Fred Beckmann, Public Works Director
Alberto Zamora, Sanitation Director
Patricia Walker, Chief Financial Officer
Carol Markus, Waste Services USA, Inc. (Comptroller)
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