Thunder Demolition, Inc." MIAMI BEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
DATE:
Jorge M. Gonzalez, City Manager "~
Kathie G. Brooks, Budget and p~:2rmance Improvement Director rY
James J. Sutter, Internal Audito;rt
June 19, 2008 /
AUDIT:
PERIOD:
Thunder Demolition, Inc. (Thunder Demolition)
December 2006 to February 2008
This report is the result of a scheduled audit of the Roll-off Fee Returns for Thunder Demolition, 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 equaling 16% of Miami Beach gross receipts to the City's
Finance Department by the end of the subsequent month, filing various reports, and maintaining
sufficient insurance.
Thunder Demolition has obtained a business tax receipt since December 2006. Their majority lines
of business are demolition contractors, concrete cutting, excavation & lamb clearing, trucking &
lowboy service, equipment rental. In addition, Thunder demolition provides roll-off services as a
supplemental line of business.
OVERALL OPINION
Thunder Demolition has not complied with certain provisions of the City Code's during the audit. As
a result, gross receipts were not reported and the franchise fees were not paid to the City. The
following items were noted during audit:
• Gross receipts in the amount of $5,139.65 were not reported. Therefore, Thunder
Demolition owes the amount of $822.34 in franchise fees.
• Thunder Demolition has submitted the certificate of liability insurance.
• Thunder Demolition has not filed a list of accounts and the required CPA statement of gross
receipts.
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Internal Audit Report
Thunder Demolition, Inc.
June 19, 2008
• Thunder demolition needs to enhance its system of record keeping in order for the audit not
to be hindered. When submitting monthly roll-off fee report customers' name, invoice
number, address of location, container fee, franchise fee, fuel and other must be attached to
the report.
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 dump fees, fuel
surcharges, dry run and overload should be included in reported gross receipts.
Out of 15 months audited gross receipts, Thunder Demolition paid the City of Miami Beach
$16,855.13 in franchise fees for $105,344.63 in reported gross receipts. Thunder
Demolition collected an additional $5,139.65 in gross receipts for roll-off waste removal
services within the city limits and did not report these amounts in compliance with the City
Code.
The following table summarizes the amount due from Thunder Demolition for our audit
period:
2006 2007 2008 TOTAL
Audited Gross Receipts $0 $72,674.12 $37,810.16 $110,484.28
Less Report Gross 0 (67,534.47) (37,810.16) (105,344.63) Receipt
Unreported Revenues 0 5,139.65 0 5,139.65
Roll-off fees due 0 83.20 739.14 822.34
Interest 0 0 0 0
Late Filing 0 0 0 0
Total Due $0 $822.34 $0 $822.34
Recommendation(s)
Thunder Demolition should remit the amount of $822.34. Any past due monthly franchise
fee returns and corresponding late charges occurring outside the audit period should also be
remitted to the city as soon as possible.
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Internal Audit Report
Thunder Demolition, Inc.
June 19, 2008
2. Finding -Required Repotting
Thunder Demolition 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." Thunder Demolition 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 yea(. Thunder Demolition 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.
c. City Code Section 90 -196 lists the insurance coverage that must be maintained by Roll-
off waste contractors. Thunder Demolition provided proof of the required insurance
during the audit.
Recommendation( s)
Thunder Demolition should comply with the designated sections of the City Codes and
submit lists of accounts and certified annual statements of gross receipts.
3. Finding-Records Maintenance
Thunder Demolition needs to enhance its system of recordkeeping in order for the audit not
to be hindered. Records were kept in a matter not conducive for an audit.
Recommendation(s)
Contractor should maintain their records in an organized manner so that specific invoices
can be easily located. Monthly reports should be printed by municipality and attached to
each return filed.
EXIT CONFERENCE
Audit findings were emailed on 06/18/08 and confirmed by Jennifer Bucholc of Thunder Demolition,
Inc ..
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Internal Audit Report
Thunder Demolition, Inc.
June 19, 2008
JJS: CD
Audit performed by Carmin Dufour
F:lobpii$AUD\DOC07-08\REPORTS-FINAL\THUNDER DEMOLITION.doc
cc: Robert Middaugh Jr. Assistant City Manager
Fred Beckmann, Public Works Director
Alberto Zamora, Sanitation Director
Patricia Walker, Chief Financial Officer
Jennifer Bucholc, Thunder Demolition, Inc.
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