Pronto Waste, Inc./\.1\,li\/\!\ I BEAC t-1
BUDGET AND PERFORMANCE IMPROVEMENT INTERNAL AUDIT REPORT Internal Audit Division
TO: Jorge M. Gonzalez, City Manager (j~
VIA: Kathie G. Brooks, Budget and Pe1ior,~>nance Improvement Direct~J~
FROM: James J. Sutter, Internal Audito?$4----
DATE: March 30, 2009 /
AUDIT: Pronto Waste, Inc. (Pronto Waste)
PERIOD: May 2006 to February 2009
This report is the result of a scheduled audit of the Roll-off Fee Returns for Pronto Waste, 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.
Approximately thirty companies currently possess business tax receipt 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 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. Effective October 2008 the Roll-off franchise fee was increased from 16%
to18%.
Pronto Waste has been operating in the City of Miami Beach since June 2003. Their majority lines
of business are demolition contractors, concrete cutting, excavation & land clearing, trucking &
lowboy service, equipment rental. In addition, Pronto Waste provides Roll-off services as a
supplemental line of business.
Background
Previoulsy, Internal Audit conducted an audit of Pronto Waste for period of January 2003 to April
2006. Our audit dated September 26, 2006 produced an audit assessment of $2,280.50. This
assessment was attributed to under reporting of Roll-off revenues. On November 06, 2006 Pronto
paid the audit assessment.
OVERALL OPINION
Pronto Waste has not fully complied with the City Codes as it relates to reporting requirements for
Roll-off contractors. The.following items were noted during our audit.
• Roll-off Fee returns were not filed for the months of September 2007 to February 2009. For
the audit period, $48,451.85 in gross receipts were not reported resulting in the owing of
$9,372.82 in delinquent roll-off franchise fees (including interest and late filing charges) to
the City.
\1v'e OlE·: cornrnitted io pro\'ldinf:_l E)ACelienJ public service ond ~ofety !o oil vvho live, work, ond in out vibronl. liopicol. hislc.Jric conl!r1uni!y
Internal Audit Report
Pronto Waste, Inc.
March 30, 2009
• Pronto Waste has submitted the certificate of liability insurance.
• Pronto Waste has not filed list of accounts upon renewal and the required CPA annual
statement of gross receipts. A listing of accounts was provided during the audit
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, alimonies collected by the
Roll-off waste contractor from Miami Beach service addresses, including dump fees, fuel
surcharges, dry run and overload should be included in reported gross receipts.
Out of 30 months audited gross receipts, Pronto Waste filed returns for 14 months to the
City of Miami Beach resulting in $4,688.00 in franchise fees for $29,300.00 reported gross
receipts. Pronto Waste did not file returns from September 2007 to February 2009. As a
result an additional amount of $48,451.85 in gross receipts for roll-off waste removal
services within the city limits was not reported. Therefore, Pronto Waste is not in
compliance with the City Code.
The following table summarizes audited gross receipts and the amount due from Pronto
Waste for our audit period:
2006 2007 2008 2009 TOTAL
(May-Dec) (Jan-Feb)
Audited Gross Receipts $11,505.00 $32,470.16 $29,390.32 $4,386.37 $77,751.85
Less Report Gross (11 ,505.00) (17,795.00) 0 0 (29,300.00) Receiot
Unreported Revenues 0 14,675.16 29,390.32 4,386.37 48,451.85
Roll-off fees due 0 2,348.03 4,851.54 789.54 7,989.10
Interest 0 285.41 246.41 1.90 533.72
Late Filing 0 200.00 600.00 50.00 850.00
Total Due 0 $2,833.44 $5,697.95 $841.44 $9,372.82
Recommendation(s)
Pronto Waste should remit the amount of $9,372.82. All subsequent roll-off fee return
should be filed in a timely manner and remit any franchise tax due.
Page 2 of 4
Internal Audit Report
Pronto Waste, Inc.
March 30, 2009
2. Finding-Required Reporting
Pronto Waste 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
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." Pronto Waste 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 cettified by an
independent certified public accountant reflecting gross receipts within the city for the
preceding fiscal year". Pronto Waste did not provide a statement of its annual gross
receipts generated from accounts within the city certified by an independent public
accountant reflecting gross receipts within the city for the preceding fiscal year.
Effective October 1, 2008 the ordinance requires that contractors having annual gross
receipts reported to the City over $200,000 shall, on or before 60 days following the
close of their fiscal year, deliver to the Finance Department a statement of annual gross
receipts generated from accounts within the city certified by an independent certified
public accountant reflecting gross receipts within the city for the preceding fiscal year.
c. City Code Section 90 -1961ists the insurance coverage that must be maintained by Roll-
off waste contractors. Pronto Waste provided proof of the required insurance during the
audit.
Recommendation(s)
Pronto Waste must comply with the designated sections of the City Codes by submitting a
list of accounts annually and submit certified statement of gross receipts providing their
annual returns exceed the required amount.
EXIT CONFERENCE
Audit findings were e-mailed on March 25, 2009 to Nancy Arencibia, Pronto Waste Services, Inc.
(Manager). We confirmed her agreement to our findings on March 27, 2009.
JJS: CD
Page 3 of 4
Internal Audit Repori
Pronto Waste, Inc.
March 30, 2009
Audit performed by Carmin Dufour
F:\obpii$AUDIDOC08-09\REPORTS-FINALIPRONTO WASTE.doc
cc: Robert Middaugh, Acting Public Works Director
Alberto Zamora, Sanitation Director
Patricia Walker, Chief Financial Officer
Nancy Arencibia, Pronto Waste Services, Inc. (Manager)
Page 4 of 4