State Beachfront Management Agreement FY11 (State Financial)tJ\IAtV\1 BE H
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO: Kathie G. Brooks, Interim City Manager .
James J. Sutter, Internal Auditor~d~~ FROM:
DATE: July 9, 2012 /
State Beachfront Managemen/Agreement (#3595) Financial Review
October 1, 2010 through September 30, 2011
AUDIT:
PERIOD:
This audit report is being submitted in compliance with the annual audit reporting requirement of
subparagraph (2) of the original State Beachfront Management Agreement No. 750-0006 dated
February 3, 1982, which was subsequently reassigned No. 3595 by the State Department of
Natural Resources. Furthermore, amendment number 1 was signed on August 9, 2007
extending the original terms for an additional twenty-five years until February 7, 2032.
INTRODUCTION
State Beachfront Management Agreement No. 3595 requires that the City of Miami Beach remit
to the Florida Department of Environmental Protection 25% ("sand tax") of any and all monies
the City collects from private concerns for the use of State beachfront property. There are three
categories of beachfront property users:
• Operators of beachfront concessions seaward of Lummus Park, Ocean Terrace, North
Shore Open Space Park and Pier Park (Boucher Brothers and Pen rods Brothers) who
pay for 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 on an annual basis, 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 audited rounded amounts of sand tax collected, due and paid to the
State by the three categories of users during the audit period:
*
Category Total 25% Sand Amount Difference
Revenues Tax Due Remitted
Collected
Beachfront Concessions $769,166.76 $192,291.69 $192,292.86 ($1.17)
Hoteliers/Condo Associations $168,235.24 $42,058.81 $42,058.81 $0.00
Special Events $213,386.48 $53,346.62 $53,288.21 $58.41
Total $1 '150,788.48 $287,697.12 $287,639.88 $57.24
The City made the following four sand tax payments totaling $287,639.88 to the State of Florida based on
the applicable revenues collected during the 2010/11 fiscal year:
We ore commilledlo providing excel/en/ public service ond solely /o oil who live, work, and play in our vibronl, lropical, historic community.
Internal Audit Report
State Beachfront Management Agreement Financial Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
Check Number
308358
312563
316993
321872
OVERALL OPINION
Check Date
01/11/11
04/14/11
07/19/11
10/27/11
Check Amount
$209,668.60
$22,385.24
$19,901.68
$35,668.58
Based upon our examination of City records, it has been determined that during the audit period
of October 1, 2010 through September 30, 2011, the City received a total of $1,150,788.48 in
revenues subject to the State Beachfront Management Agreement. This figure represents an
increase of $27,931.59 or 2.49% over the fiscal year 2009/1 O's total of $1, 122,856.89.
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.
FINDING AND RECOMMENDATION
Finding: The State of Florida was Inadvertently Underpaid $57.24 in Sand Tax
Internal Audit's testing found that the City remitted $287,639.88 in sand taxes to the State of
Florida which was $57.24 less than the actual amount due of $287,697.12 ($1,150,788.48 x
25%) due to inaccurate general ledger distributions performed on four received payments. See
the attached supporting schedule for revenue details by beachfront property user during the
audit period.
Recommendation(s):
The City's Finance Department has been notified and will add $57.24 to their next quarterly
sand tax payment.
JJS:MC:mc
Audit performed by Senior Auditor Mark Coolidge
cc: Patricia Walker, Chief Financial Officer
Georgina Echert, Assistant Finance Director
F:IOBPI\$AUDIINTERNAL AUDIT FILESIDOC11-12\REPORTS-DRAFTIBEACHFRONT 2011 STATE RPT.docx
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Internal Audit Report
State Beachfront Management Agreement Financial Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
SCHEDULE OF FEES COLLECTED
BEACHFRONTMANAGEMENTAGREEMENT
FISCAL YEAR 10/11
TOTAL FEES 75% OF 25% DUE
CONCESSIONAIRE * TOTAL STATE
1500 Ocean Drive Associates $2,709.22 $2,031.92 $677.31
2 3B Productions LLC $37,383.16 $28,037.37 $9,345.79
3 Act Productions $13,060.76 $9,795.57 $3,265.19
4 Advantage Destination $654.20 $490.65 $163.55
5 Alexander Hotel $4,140.00 $3,105.00 $1,035.00
6 Beta Epsilon/Cadillac LLC $4,734.00 $3,550.50 $1 '183.50
7 Betsy Ross Owner LLC ($171.48) ($128.61) ($42.87)
8 Boucher Brothers $686,462.72 $514,847.04 $171,615.68
9 Continuum on So. Beach $11,618.00 $8,713.50 $2,904.50
10 Crown $3,132.00 $2,349.00 $783.00
11 Crystal Beach Development $1,512.00 $1,134.00 $378.00
12 Dade Community Foundation $4,795.00 $3,596.25 $1,198.75
13 Days Inn Oceanside $2,527.00 $1,895.25 $631.75
14 Decoplage Condo Assn. $11,504.00 $8,628.00 $2,876.00
15 Delano Hotel $3,744.00 $2,808.00 $936.00
16 Doubletree Surfcomber Hotel $4,070.00 $3,052.50 $1,017.50
17 East Atlantic Gardens Condo $900.00 $675.00 $225.00
18 ECOMB, Inc. $116.80 $87.60 $29.20
19 Eden Roc Hotel $20,000.00 $15,000.00 $5,000.00
20 Exclusive Sports Marketing $4,988.32 $3,741.24 $1,247.08
21 Four Points/Sheraton $3,705.00 $2,778.75 $926.25
22 Grand Beach Hotel $8,170.00 $6,127.50 $2,042.50
23 Holiday Inn Miami Beach $4,674.00 $3,505.50 $1,168.50
24 II Villaggio Condo Assn. $2,286.00 $1,714.50 $571.50
International Merchandising
25 Corporation $2,981.32 $2,235.99 $745.33
26 Katrina's/The Bath Club $2,052.00 $1,539.00 $513.00
27 King Richard Condominium $935.98 $701.99 $234.00
28 Logistics Management Group $43,075.44 $32,306.58 $10,768.86
29 Marriott Fairfield Inn $3,876.00 $2,907.00 $969.00
30 Miami Beach Marriott $4,484.00 $3,363.00 $1 '121.00
31 Michael Clinger $11,682.24 $8,761.68 $2,920.56
32 Michael Epstein Productions LLC $3,117.48 $2,338.11 $779.37
33 Moises D. Ariza $337.88 $253.41 $84.47
34 Mosaic On Miami Beach $3,182.00 $2,386.50 $795.50
35 MYC Youth Sailing Foundation Inc. $735.96 $551.97 $183.99
36 Nautilus Club $9,287.00 $6,965.25 $2,321.75
37 Orange Drive LLC $16,121.48 $12,091.11 $4,030.37
38 Palms South Beach $4,428.00 $3,321.00 $1,107.00
39 Penrod Brothers (Beach Concessions) $38,704.04 $29,028.03 $9,676.01
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REMITTED OWED
TO
TO STATE STATE
$677.31 $0.00
$9,345.79 $0.00
$3,265.19 $0.00
$163.55 $0.00
$1,035.00 $0.00
$1 '183.50 $0.00
($42.87) $0.00
$171 ,615.68 $0.00
$2,904.50 $0.00
$783.00 $0.00
$378.00 $0.00
$1,198.75 $0.00
$631.75 $0.00
$2,876.00 $0.00
$936.00 $0.00
$1,017.50 $0.00
$225.00 $0.00
$29.20 $0.00
$5,000.00 $0.00
$1,247.08 $0.00
$926.25 $0.00
$2,042.50 $0.00
$1,168.50 $0.00
$571.50 $0.00
$745.33 $0.00
$513.00 $0.00
$234.00 $0.00
$10,710.45 $58.41
$969.00 $0.00
$1,121.00 $0.00
$2,920.56 $0.00
$779.37 $0.00
$84.47 $0.00
$795.50 $0.00
$183.99 $0.00
$2,321.75 $0.00
$4,030.37 $0.00
$1,107.00 $0.00
$9,676.01 $0.00
Internal Audit Report
State Beachfront Management Agreement Financial Review (#3595)
For the Fiscal Year Ending September 30, 2011
July 9, 2012
40 Penrod Brothers (Special Events) $31,503.60 $23,627.70 $7,875.90 $7,875.90 $0.00
41 Polo Life LLC $24,306.20 $18,229.65 $6,076.55 $6,076.55 $0.00
42 Pro Foot Volley Tour LLC $5,700.00 $4,275.00 $1,425.00 $1,425.00 $0.00
43 Quality Inn $4,180.00 $3,135.00 $1,045.00 $1,045.00 $0.00
44 Relevent $4,018.68 $3,014.01 $1,004.67 $1,004.67 $0.00
45 Revolution $7,150.00 $5,362.50 $1,787.50 $1,787.50 $0.00
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 Setai 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
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