State Beachfront Management Agreement FY11 (City Operational)MliAMIBEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
FROM:
DATE:
AUDIT:
PERIOD:
Kathie G. Brooks, Interim City M~aager:_
James J. Sutter, Internal Auditor
July 9, 2012
State Beachfront Management Agreement (#3595) Operational Review
October 1, 2010 through September 30, 2011
This report is the result of a regularly scheduled audit of the operational controls surrounding the
City's managing of the State Beachfront Management Agreement No. 750-0006 dated February
3, 1982 (later reassigned No. 3595 by the State's Department of Natural Resources) and the
corresponding amendment extending its terms through February 7, 2032. A separate audit
report focusing on our financial review was issued to the State of Florida in accordance with the
agreement.
INTRODUCTION
State Beachfront Management Agreement No. 3595 requires the City of Miami Beach to remit
25% ("sand tax") of any and all monies collected from private concessionaires or other private
concerns for the use of State beachfront property to the Florida Department of Environmental
Protection. Also, in accordance with state statutes, the City collects 7% sales tax along with the
beachfront rental revenue, and remits same to the State's Department of Revenue.
There are three categories of beachfront property users:
• Operators of beachfront concessions seaward of Lummus Park, Ocean Terrace, North
Shore Open Space Park, Pier Park, 21st Street and 46th Street (Boucher Brothers,
Penrods Brothers and Tim Wilcox, Inc.) who pay for the use of the beachfront as per
their respective contractual agreements with the City.
• Miami Beach hoteliers and condominium associations, which pay beach upland fees to
the City annually based on the number of units, at the same time that they pay their
business tax receipt fees.
• Members of the public who run organized, usually one time only events on the beach,
such as weddings, volleyball tournaments and corporate affairs. These are called
special events, and payments are remitted to the City's Tourism and Cultural
Development Department.
The following table lists the rounded amount of sand tax paid by the City to the State of Florida
for the use of their beachfront property during the past three fiscal years:
Category FY 2008/09 FY 2009/10 FY 2010/11 Total
Beachfront Concessions $186,406 $184,372 $192,293 $563,071
Hoteliers and Condo Associations $55,143 $64,177 $42,059 $161,379
Special Events $20,853 $32,273 $53,288 $106,414
Subtotal $262,402 $280,822 $287,640 $830,864
Adjustments * ($10,238) ($249) $0 ($10,487)
Total $252,164 $280,574 $287,640 $820,377
We are committed to providing excellent public service and safely to all who live, work, and play in our vibrant, tropical, historic communily.
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
* The adjustments represent the Finance Department's corrections of previous sand tax payments made on
beach concession fees, inaccurate calculations, prior audit results, etc. and are listed separately as it affects
different customers within the designated categories.
OVERALL OPINION
Miscellaneous Cash Receipts and Payment Vouchers were generally accurately calculated and
separated into the appropriate general ledger accounts. Furthermore, this data along with
upland fee revenues was properly entered into the City's Financial System and the Special
Events Fee Log. Despite these positive findings, the following shortcomings were noted and
are in need of improvement:
• The City inadvertently underpaid the State of Florida by $57.24 due to incorrect general
ledger distributions of a beach concessionaire and special event customer's payments.
• The City currently does not have an adequate process by which to confirm the actual
number of units for hotels, condominiums, etc. which affects such calculations as upland
fees, smoke detector fees, etc.
• Incorrect upland fee billings are identified whereby the City did not collect monies that it
was entitled to receive.
• The City did not receive $2,766 due as the Eden System inaccurately billed fourteen
hotels/condos 2010/11 fiscal year beach concession fees for food, equipment, etc.
• An hotelier's $3,672 check received by the Office of Real Estate, Housing and Community
Development on 04/30/10 had not yet been processed when found by Internal Audit in
December 2011.
• The internal controls surrounding the receipt and storage of special event customers'
drivers' licenses and credit cards were not always sufficient.
PURPOSE
The purpose of this audit is to determine whether the City complied with State Beachfront
Management Agreement No. 3595 by accurately calculating, timely remitting and properly
recording sand tax monies to the Florida Department of Environmental Protection equal to 25%
of any and all revenues collected from private concerns for the use of State beachfront property.
SCOPE
1. Confirm that State Management Agreement #3595 is valid and its terms complied with.
2. Confirm that updated City policies and procedures exist, are known and followed by
personnel.
3. Confirm that the supporting documentation maintained is organized, sufficient and
complete.
Page 2 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
4. Confirm that the Finance Department's quarterly sand tax payments are properly
calculated and are remitted to the State of Florida
5. Confirm that tested sand tax transactions are complete, accurately calculated and
properly recorded in the City's Financial System.
PROCESS DESCRIPTION
The City's Finance Department mailed its business tax receipts in August 2010 requesting
payment for the 2010/11 fiscal year. In addition to other annual charges, any
hotel/condominium that collects money from equipment rentals and/or food and beverage sales
occurring on the beach should be billed upland fees at a rate of $18 per unit/room per City
Ordinance No. 2003-3420. The rate increased to $19 for the 2011/12 fiscal year which is
pertinent because some hotels/condos paid these business tax receipts before their October 1,
2011 due date or during the audit period.
A maximum charge of $10,000 per upland property is required for each concession location,
plus any applicable taxes. Therefore, hotels/condos such as the Loews, Fontainebleau, Eden
Roc and Decoplage with more than 555 units (556 x $18 > $10,000) would only be charged the
maximum of $10,000 in upland fees during the 2010/11 fiscal year. Accordingly, the threshold
for the maximum number of units decreased to 526 for the 2011/12 fiscal year due to the
associated $1 per unit/room increase.
Payment in full was due by October 1st or the customer is subject to Code Compliance citations
and penalties. All payments received are to be processed by the City's Central Cashier and
distributed to the corresponding general ledger accounts pre-programmed into the Eden
System's Cashiering Module.
In addition, beach concessionaires (Boucher Brothers, Penrods Brothers and Tim Wilcox, Inc.)
remit payments based on their agreements with the City. For example, Penrods Brothers and
Tim Wilcox, Inc. remit monthly payments whereas Boucher Brothers pays an upfront minimum
guarantee and then a true-up at year end whereby any calculated overages are due by
December 31 51 .
The Finance Department receives these payments and prepares a Payment Voucher form to
distribute the monies among the applicable general ledger accounts. Once completed, the form
and payment are submitted to the Central Cashier for processing (similar to the business tax
receipt payment process mentioned earlier).
Lastly, the Tourism & Cultural Development Department is responsible for approving and
monitoring special events occurring in the City. The event promoter has to meet specified
criteria and remit various fees to stage the event based on a number of factors. Examples may
include but are not limited to the submittal of site plans and insurance; the existence of off-duty
police and/or fire personnel; the payment of application fees, permit fees, security deposits; etc.
Page 3 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
Pre-numbered Miscellaneous Cash Receipt forms or MCRs are used to process any monies
received from the event promoters by the Tourism & Cultural Development Department. The
MCRs provide such pertinent information as the payer's name, address, reason for paying and
total paid; the general ledger account number distribution for these monies; as well as the
preparer's relevant information. This form accompanied by the payment is then brought to the
Central Cashier for processing and validation.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
1. Finding: The State of Florida was Inadvertently Underpaid by $57.24 in Sand Tax Based
on Applicable Payments Received During the 2010111 Fiscal Year
All sand tax payments received during the 2010/11 fiscal year were tested to confirm
that the City's four quarterly payments to the State of Florida were correct. The only two
exceptions noted were the following resulting in the City underpaying the State of Florida
a total of $57.24 in sand tax:
• The Tourism & Cultural Development Department incorrectly processed the
$3,825.00 total payment from Logistics Management Group (special event
promoter) on Miscellaneous Cash Receipt number 310209. Mistakenly, $625.00
was placed into sand tax general ledger account number 601-7000-229068
instead of $683.41 resulting in a $58.41 shortage.
• The December 2010, January 2011 and February 2011 payments received from
Tim Wilcox, Inc. (beach concessionaire) were incorrectly processed by the Office
of Real Estate, Housing and Community Development as the sand tax due for
each month was overstated by $.39 resulting in a total of $1.17 ($.39 x 3
months).
Exhibit A located on pages 11 and 12 of this audit report compares the amount of sand
tax due for each applicable beachfront property user with the corresponding amounts
actually paid to the State of Florida.
Recommendation(s):
The City's Finance Department should correct the misstated general ledger accounts via
journal entry and increase its next quarterly sand tax payment due by 07/20/12 for the
$57.24 shortage identified above.
Management Response (Finance):
The Finance Department will correct, via journal entry, the payment inadvertently
processed by the Tourism & Cultural Development Department to the wrong general
ledger account which resulted in $58.41 being misapplied; as well as, the payments
processed by the Office of Real Estate, Housing and Community Development resulting
in an overstatement of $1.17.
2. Finding: Difficulties in Verifying the Number of Units Annually to be Charged Upland
Fees
The beachfront concession agreement is to be prepared each fiscal year by the Office of
Page 4 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
Real Estate, Housing and Community Development as it defines such important terms
as the permitted beach concessions, the amount of upland fees due, etc. Their stated
standard practice is to prepare this signed agreement only upon the entity's purchase of
the property or upon notification of a material change as its annual preparation, mailing
and receipt is a time consuming task.
Internal Audit's review of these files found that the oldest beachfront concession
agreements were prepared and signed during the 2001/02 fiscal year for the Shelborne
Hotel, 1500 Ocean Drive Condominium Association, etc. and therefore contained some
outdated information. For example, the listed number of units differed from the number
billed for thirteen hotels/condominiums with the largest difference being for the
Gansevoort Hotel (now the Perry).
It is important to accurately determine the number of units annually as it affects such
business tax receipt calculations as their upland fees, hotels (smoke detector) fees, etc.
Currently, the City primarily depends upon the honesty of the property owner in
completing their annual business tax receipt documentation so Internal Audit is
concerned about the accuracy of the billed number of units.
The Office of Real Estate, Housing and Community Development's Field Monitor was
recently tasked with researching the number of units to confirm the upland fee
calculations. In doing so, numerous differences were found between the counts in the
City's Eden System and those calculated by the City's GIS Manager, by the City's
Building Department per certificates of occupancy and certificates of completion, Dade
County Property Records, and the City's Permits Plus System from completed building
re-certifications.
Also, City Ordinance No. 2003-3420 states that the beach upland fee is to be based on
the number of units but no definition could be found for upland fees thereby making it
more difficult to calculate and to explain to property owners. However, inquiries found
that units are distinguished by the number of fire separation walls which may or may not
equal the number of rooms in the building. Another definition heard was that it
represents the number of rooms excluding bathrooms and kitchens which would be
difficult to calculate if true.
Although business tax receipts have limited the upland fees to a maximum of $10,000
per property since their inception, it has and will continue to affect more hotels and
condominiums as the per unit price increases by 5% every two years per Ordinance No.
2003-3420. For example, the $10,000 maximum occurred for buildings with more than
666 units when the per unit price was $15 in 2003 but now it has decreased to 526 units
as the per unit price has risen to $19.
Recommendation(s):
Although the signed beachfront concession agreement is a valuable document detailing
the current agreed upon beach upland and beachfront concession fees, etc.; much of
the same information can be obtained through the business tax receipt process.
Consequently, one option to consider is to have the Finance Department incorporate an
Page 5 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
updated beach concession agreement annually into the business tax receipt process.
Another option is to rewrite the agreement avoiding specific terms, amounts, etc. that will
change so it only needs to be prepared after the entity's purchase of the property. For
example, the agreement should define beach upland fees and the property owner's need
to pay but not list the amount due which currently changes every two years per City
Ordinance No. 2003-3420.
Furthermore, the City Administration and applicable departments should determine the
optimal means to determine the number of units in City buildings annually so that the
corresponding fees can be accurately calculated for all entities. Finally, the City
Administration should consider having the City Commission decide on the definition of
units for upland fees, increasing the $10,000 upland fee cap per property, etc. to help
reduce confusion and to facilitate enforcement.
Management Response (Office of Real Estate, Housing & Community Development):
Staff agrees that specific terms, amounts, etc. should be revised so that they are current
and applicable. Staff agrees that the correct annual unit count should be determined
prior to the preparation of annual invoices. Either the Building Department or the
Planning Department should provide the unit counts and/or verify the unit counts prior to
the collection of business tax receipt payments.
3. Finding: Incorrect, Unbil/ed or Lengthy Unpaid Upland and any Associated Beach
Concession Fees
The Eden System's Licensing Module calculates the amount due for an entity's business
tax receipt for the fiscal year based on the data received and entered. If the entered
data is inaccurate and it goes undetected (ex. the number of units), then the
corresponding entity will be billed incorrectly. Testing conducted on hotels/condos
discovered the following upland and associated beach concession fees' billing errors or
unpaid amounts whereby the City is not receiving the listed monies due (excluding
interest and penalties):
• The Royal Palm Hotel located at 1545 Collins Avenue had two different owners
(Royal Palm Hotel Property LLC and RP Hotel Operating Co., Inc.) that were
both billed for upland and beach concession fees totaling $8,170 for the 2010/11
fiscal year. To date, neither has apparently paid as both accounts' status is listed
as "pending".
• The Raleigh Hotel located at 1775 Collins Avenue was not charged upland and
beach concession fees totaling $10,324 during the 2009/10, 2010/11 and
2011/12 fiscal years. Yet, the Office of Real Estate, Housing & Community
Development stated that the hotel's beach concession operations remained
operational throughout this period.
• The Caribbean Condominium Association, Inc. located at 3737 Collins Ave was
charged $1 ,976 in upland fees during the 2011/12 fiscal year despite being
exempt as it is a non-commercial entity per the Office of Real Estate, Housing
and Community Development.
• The Deauville Beach Resort located at 6701 Collins Avenue was not billed
$8,604 in upland fees (478 units x $18) and $1,328 in beach concession fees
Page 6 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
($664 + $664) on their 2010/11 fiscal year business tax receipt. In addition, the
2011/12 fiscal year's business tax receipt incorrectly billed $669 for two beach
concession fees instead of the actual amount of $699 resulting in a $60 shortage.
• Canyon Ranches includes three separate buildings located at 6799, 6801 and
6899 Collins Avenue that are subject to upland and beach concession fees.
Internal Audit's calculations show that Canyon Ranches currently owes a total of
$30,695 in upland and beach concession fees for the 2008/09, 2009/10, 2010/11
and 2011/12 fiscal years after deducting any amounts paid but has not been
cited by the City's Code Compliance Division.
These amounts are not included in finding #1 because the State of Florida properly
received 25% of all upland fees collected by the City in accordance with State
Beachfront Management Agreement No. 3595. As additional upland fee monies are
paid or refunded/credited to the hotels and condominiums identified above, the City's
sand tax payments to the State of Florida will be adjusted accordingly.
Recommendation(s):
The corresponding owners identified above should be sent updated business tax receipt
invoices explaining the reasons for the difference with a time frame upon which payment
is due. Any credits should either be applied against any outstanding amounts or carried
forward to offset any amounts owed for future business tax receipts. Also, the Finance
Department should closer scrutinize the upland fee billing process to determine the root
causes of the listed breakdowns to help prevent future inaccuracies from occurring.
Management Response (Finance):
The Finance Department will coordinate with the Office of Real Estate, Housing and
Community Development and the Code Compliance Division to obtain compliance for
upland and concession fees. Where applicable, businesses will be billed for missing
fees. In some instances, the businesses will have to amend their Business Tax Receipt
and Certificate of Use via an application, as an addition of unit and room counts must go
through a regulatory review process which includes the Building Department, Planning
Department, Fire Department, Office of Real Estate, Housing and Community
Development, Asset Management Division and Code Compliance Division. The addition
of units may have zoning and/or building code restrictions. The billing process for this
function will be moving from EDEN to Accela effective October 1, 2012.
Management Response (Office of Real Estate, Housing & Community Development):
Code Compliance has been notified of the Royal Palms unpaid business tax receipt and
is taking corrective action. The Raleigh has since paid its bill in full. After some
discussion with Finance over a billing confusion, the business tax receipts for the
Deauville and Canyon Ranch have been adjusted and the correct amounts have been
billed. The Caribbean Condominium Association, Inc. was mistakenly billed as a
commercial entity and will be issued a credit since there is no fee charged to non-
commercial entities.
4. Finding: Beach Concession Fees Were Not Properly Charged Resulting in the City
Under Billing Fourteen Entities by a Net Total of $2, 766 During the 2011112 Fiscal Year
Page 7 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
Hotels and condos subject to upland fees and beachfront concessionaires will also owe
some combination of beach concession fees for each type applicable (food, equipment,
water sports or sundries). Internal Audit and the Office of Real Estate, Housing and
Community Development's Field Monitor recently reviewed the Eden System's 2011/12
fiscal year billings and found the following deficiencies (excluding those previously noted
in finding #3):
• Six hotels/condominiums were incorrectly not billed $699 each for needed beach
concession equipment fees. Conversely, five hotels/condominiums were
incorrectly billed $699 each for beach concession equipment fees that were not
needed.
• The King Richard Condominium was billed $729 for equipment which is $30
more than the $699 owed.
• Two hotels/condominiums and a beach concessionaire were each incorrectly not
charged $699 each in beach concession food fees.
Exhibit B located on page 13 of this audit report provides a detailed listing of the affected
hotels/condos.
Recommendation( s ):
The Finance Department's Licensing Section should adjust the fourteen current fiscal
year business tax receipts found in Exhibit B accordingly. Also, the beach concession
fees' billing process should be reviewed to determine the reasons for these differences
so that they can be prevented in the future.
Management Response (Finance):
The Finance Department will coordinate with the Office of Real Estate, Housing and
Community Development and the Code Compliance Division to obtain compliance for
upland and concession fees. Where applicable, businesses will be billed for missing
fees. If the alleged deficiencies in fees were for concessions added by the business
without obtaining regulatory approval first, these businesses should receive a violation
and be required to apply for the additional beachfront concessions they are operating.
These additional concessions will be subject to their respective regulatory review. The
billing process for this function will be moving from EDEN to Accela effective October 1,
2012.
Management Response (Office of Real Estate. Housing & Community Development):
The Office of Real Estate, Housing and Community Development will review the status
of the beach concessionaire's upland and concession fee payments on a semi-annual,
follow-up basis; once on November 1st and once on May 1st. Any deficiencies or non-
payment issues will be reported to Code Compliance.
5. Finding: Check #18557 Received on 04130/10 for $3,672.00 was Present in a Hotelier's
File but had not yet been Processed by the Central Cashier
The Best Western Atlantic Beach Resort's file maintained by the Office of Real Estate,
Housing and Community Development contained check number 18557 for $3,672.00
which was time/date stamped as having been received on 04/30/10. Apparently with the
Page 8 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
forthcoming turnover in departmental personnel and the hotelier's failure to complete
and return the required beachfront concession agreement, this check was inadvertently
forgotten and had not been cashed by November 2011 or returned to the customer.
Recommendation( s):
Received customers' checks should not be held by the associated City
department/division as it increases the likelihood that they may be misplaced,
misappropriated, etc. Instead, they should be promptly brought to the Central Cashier
for processing or returned to the customer if needed additional items are missing.
Management Response (Office of Real Estate, Housing & Community Development):
Concessionaire paid the 2009/10 business tax receipts in full on 09/22/09. Check
#18557 was an additional, overpayment by the concessionaire for the beachfront
concessions portion of the fee, which was received by the Office of Real Estate, Housing
& Community Development on 04/30/1 0 and was inadvertently filed instead of returned.
Check #18557 has since been destroyed.
6. Finding: Customers' Confidential Information Maintained by the City is Not Necessarily
Adequately Safeguarded
A growing number of special event promoters located outside Miami Beach are opting to
fax copies of their drivers' licenses and credit cards along with completed and signed
Credit Card Billing Statements to the Tourism & Cultural Development Department to
expedite the approval process. Once received, these documents are to be brought to
the City's Central Cashier for processing with copies of the validated Miscellaneous
Cash Receipts or MCRs subsequently returned to the applicable customers.
Any copies of these confidential documents maintained by Tourism & Cultural
Development Department are supposed to be promptly shredded to better protect the
customer's confidentiality. However, inquiries with department personnel found that
occasionally these documents are incorrectly placed into the corresponding special
events' files which could then be obtained by mischievous individuals knowing their
location. There are no current policies and procedures covering this process and it is
further complicated by the fact that any of four different individuals can receive and
process a special event payment.
Currently, Tourism & Cultural Development Department personnel are working with the
Information Technology Department and an outside vendor on implementing a payment
system similar to one currently used by the Finance Department in processing utility
billing payments whereby City employees enter the customer's relayed verbal
information directly into a protected system. Consequently, there would be no further
need to receive copies of drivers' licenses, credit cards, etc. but this safeguarded system
is not expected to be functional until approximately April 2012.
In addition, the Finance Department began scanning MCRs and their supporting
documentation into the City's Eden System where they can be accessed by all
authorized users. As a result of testing, Internal Audit reviewed the corresponding data
entered into the Eden System for MCR number 307566 to find the following:
Page 9 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
• The completed and signed Credit Card Billing Statement was present with the
customer's manually recorded credit card number blacked out by the Finance
Department thereby making it difficult to read.
• The customer's provided drivers' license was present with the corresponding
number blacked out again but this time the information was more easily
distinguishable.
• Front and back copies of the customer's credit card did not have the associated
number properly blacked out as they could be read. Also, the credit card's
important expiration date and card security code were not blacked out at all.
These facts identified above with MCR number 307566 and the information learned in
inquiries with Tourism & Cultural Development and Finance Department personnel make
it possible that customers' confidential information could be compromised by ·
mischievous individuals unless additional safeguards are implemented.
Recommendation(s):
Tourism & Cultural Development Department personnel should continue to aggressively
pursue the implementation of the automated protected payment system to better protect
the integrity of customers' received confidential information. In the interim, any provided
copies of drivers' licenses, credit cards, etc. should be properly secured until it can be
shredded. Finally, the Finance Department should not scan any customers' confidential
documentation into the Eden System.
Management Response (Tourism & Cultural Development):
An automated protected payment solution was approved by the I.T. Steering Committee
three (3) years ago, but has not been implemented yet. In the meantime, Tourism and
Cultural Development has recently instituted standard operating practice whereby copies
of any confidential information will be shredded once the file (special events or film) has
been closed.
Management Response (Finance):
The Cashier's Office has been instructed to shred any copies of credit cards and driver's
license after the credit card has been processed. The Cashier's Office will only keep the
credit card authorization form that is filled out by the customer with his/her signature.
We will then, after the credit card has been processed, black out all the credit card
numbers (except the last four digits) on the authorization form. We need to keep the
signed authorization form as proof of payment for our records and also in case the credit
card charge is challenged by the customer.
EXIT CONFERENCE
James Sutter (Internal Auditor) and Mark Coolidge (Senior Auditor) held separate exit
conferences on April 10, 2012 with Cultural Arts and Tourism Development Director Max Sklar
and the Finance Department's Georgina Echert (Assistant Finance Director) and Manny
Marquez (Revenue Manager). Another exit conference was subsequently held on April 11,
Page 10 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
2012 between Internal Audit and the Office of Real Estate, Housing & Community Development
Director Anna Parekh. Management responses were solicited and included above. All parties
were in agreement as to the contents of this report.
JJS:MC:mc
Audit petiormed by Senior Auditor Mark Coolidge
F:\OBPI\$AUD\INTERNAL AUDIT FILES\DOC11-12\REPORTS-FINAL\BEACHFRONT 2011 CITY RPT.docx
cc: Hilda Fernandez, Assistant City Manager
Patricia Walker, Chief Financial Officer
Georgina Echert, Assistant Finance Director
Max Sklar, Cultural Arts and Tourism Development Director
Anna Parekh, Office of Real Estate, Housing & Community Development Director
Hernan Gardena, Division Commander
Robert Santos-Aiborna, Code Compliance Division Director
Page 11 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
CONCESSIONAIRE
1500 Ocean Drive Associates
3B Productions LLC
Act Productions
SCHEDULE OF FEES COLLECTED
BEACHFRONT MANAGEMENT AGREEMENT
FISCAL YEAR 10111
EXHIBIT A
TOTAL FEES*
$2,709.22
$37,383.16
$13,060.76
$2,031.92
$28,037.37
$9,795.57
Advantage Destination & Meeting Services, Inc.
Alexander Hotel
$654.20
$4,140.00
$4,734.00
($171.48)
$490.65
$3,105.00
$3,550.50
($128.61)
Beta Epsilon/Cadillac LLC
Betsy Ross Owner LLC
Boucher Brothers
Continuum on So. Beach
Crown
Crystal Beach Development
Dade Community Foundation
Days Inn Oceanside
Decoplage Condo Assn.
Delano Hotel
Doubletree Surfcomber Hotel
East Atlantic Gardens Condo
ECOMB, Inc.
Eden Roc Hotel
Exclusive Sports Marketing
Four Points/Sheraton
Grand Beach Hotel
Holiday Inn Miami Beach
II Villaggio Condo Assn.
International Merchandising Corporation
Katrina's/The Bath Club
King Richard Condominium
Logistics Management Group
Marriott Fairfield Inn
Miami Beach Marriott
Michael Clinger
Michael Epstein Productions LLC
Moises D. Ariza
Mosaic On Miami Beach
MYC Youth Sailing Foundation Inc.
Nautilus Club
Orange Drive LLC
Palms South Beach
Penrod Brothers (Beach Concessions)
Penrod Brothers (Special Events)
Polo Life LLC
Pro Foot Volley Tour LLC
Quality Inn
Relevent
Revolution
$686,462.72
$11,618.00
$3,132.00
$1,512.00
$4,795.00
$2,527.00
$11,504.00
$3,744.00
$4,070.00
$900.00
$116.80
$20,000.00
$4,988.32
$3,705.00
$8,170.00
$4,674.00
$2,286.00
$2,981.32
$2,052.00
$935.98
$43,075.44
$3,876.00
$4,484.00
$11,682.24
$3,117.48
$337.88
$3,182.00
$735.96
$9,287.00
$16,121.48
$4,428.00
$38,704.04
$31,503.60
$24,306.20
$5,700.00
$4,180.00
$4,018.68
$7,150.00
Page 12 of 14
$514,847.04
$8,713.50
$2,349.00
$1,134.00
$3,596.25
$1,895.25
$8,628.00
$2,808.00
$3,052.50
$675.00
$87.60
$15,000.00
$3,741.24
$2,778.75
$6,127.50
$3,505.50
$1,714.50
$2,235.99
$1,539.00
$701.99
$32,306.58
$2,907.00
$3,363.00
$8,761.68
$2,338.11
$253.41
$2,386.50
$551.97
$6,965.25
$12,091.11
$3,321.00
$29,028.03
$23,627.70
$18,229.65
$4,275.00
$3,135.00
$3,014.01
$5,362.50
25% DUE
$677.31
$9,345.79
$3,265.19
$163.55
$1,035.00
$1 '183.50
($42.87)
$171,615.68
$2,904.50
$783.00
$378.00
$1,198.75
$631.75
$2,876.00
$936.00
$1,017.50
$225.00
$29.20
$~,000.00
$1,247.08
$926.25
$2,042.50
$1 '168.50
$571.50
$745.33
$513.00
$234.00
$10,768.86
$969.00
$1,121.00
$2,920.56
$779.37
$84.47
$795.50
$183.99
$2,321.75
$4,030.37
$1 '107.00
$9,676.01
$7,875.90
$6,076.55
$1,425.00
$1,045.00
$1,004.67
$1,787.50
REMITTED
TO STATE
$677.31
$9,345.79
$3,265.19
$163.55
$1,035.00
$1,183.50
($42.87)
$171,615.68
$2,904.50
$783.00
$378.00
$1,198.75
$631.75
$2,876.00
$936.00
$1,017.50
$225.00
$29.20
$5,000.00
$1,247.08
$926.25
$2,042.50
$1,168.50
$571.50
$745.33
$513.00
$234.00
$10,710.45
$969.00
$1,121.00
$2,920.56
$779.37
$84.47
$795.50
$183.99
$2,321.75
$4,030.37
$1 '107.00
$9,676.01
$7,875.90
$6,076.55
$1,425.00
$1,045.00
$1,004.67
$1,787.50
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$58.41
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
46 Richmond Hotel $2,033.00 $1,524.75 $508.25 $508.25 $0.00
47 Ritz Carlton $7,144.00 $5,358.00 $1,786.00 $1,786.00 $0.00
48 Riutel Florida $5,396.00 $4,047.00 $1,349.00 $1,349.00 $0.00
49 Seagull Hotel $2,774.00 $2,080.50 $693.50 $693.50 $0.00
50 Shelborne Beach Resort $4,826.00 $3,619.50 $1,206.50 $1,206.50 $0.00
51 Sobe Miami LLC Palace $754.68 $566.01 $188.67 $188.67 $0.00
52 Soho House Beach House LLC $1,850.00 $1,387.50 $462.50 $462.50 $0.00
53 South of Fifth Condo Association $504.00 $378.00 $126.00 $126.00 $0.00
54 South Seas Hotel $2,223.00 $1,667.25 $555.75 $555.75 $0.00
55 The Setal Resort and Condo $4,806.00 $3,604.50 $1,201.50 $1,201.50 $0.00
56 The Shore Club Hotei/Philips $5,850.00 $4,387.50 $1,462.50 $1,462.50 $0.00
57 Tim Wilcox, Inc. $44,000.00 $33,000.00 $11,000.00 $11,001.17 ($1.17)
58 U.S. Vood Sports $1,074.76 $806.07 $268.69 $268.69 $0.00
59 Westgate Resort $828.00 $621.00 $207.00 $207.00 $0.00
60 Wyndham Miami Beach Resort $8,151.00 $6,113.25 $2,037.75 $2,037.75 $0.00
Total $1 '150,788.44 $863,091.33 $287,697.11 $287,639.88 $57.24
*Excludes sales tax
Page 13 of 14
Internal Audit Report
State Beachfront Management Agreement Operational Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
SCHEDULE OF BEACH FRONT CONCESSION FEES
BEACH FRONT MANAGEMENT AGREEMENT
FISCAL YEAR 11/12
EXHIBIT B
BEACHFRONT BEACH FRONT
PERMIT CMB CONCESSION CONCESSION
NUMBER CONCESSIONAIRE ADDRESS EQUIPMENT FOOD
RL 10000237 The National 1677 Collins Ave $699.00
RL 06002057 Nautilus Club 1825 Collins Ave $699.00
RL 10000360 2201 Collins Fee, LLC 2201 Collins Ave $699.00
RL 04002308 Westgate Resort 3611 Collins Ave $699.00
RL 10001675 Mosaic on Miami Beach 3801 Collins Ave ($699.00)
RL 04002576 Beta Epsilon/Cadillac 3925 Collins Ave $699.00
RL 01000790 Sokolov Ltd 41 01 Collins Ave $699.00
RL 03000189 King Richard Condo 4141 Collins Ave ($30.00) $699.00
RL 10003800 Soho House 4385 Collins Ave ($699.00)
RL 10004440 Eden Roc 4525 Collins Ave {$699.00)
RL 04002690 Blue and Green Diamond 4777 Collins Ave ($699.00)
RL 10003925 Katrina's/The Bath Club 5937 Collins Ave $699.00
RL 88120595 Pen rods 1 Ocean Dr $699.00
RL 10000345 The Savo~ 425 Ocean Dr ($699.00)
TOTAL $669.00 $2,097.00
TOTAL
FEES
OWED
$699.00
$699.00
$699.00
$699.00
($699.00)
$699.00
$699.00
$669.00
($699.00)
($699.00)
($699.00)
$699.00
$699.00
($699.00)
$2,766.00
ANY POSITIVE AMOUNTS LISTED ABOVE INDICATE THAT THE CITY UNDERBILLED THE ENTITY, WHILE
ANY NEGATIVE AMOUNTS MEAN THAT THE ENTITY WAS OVERBILLED AND IS DUE A REFUND
Page 14 of 14