JM-Scaffolds-of-Florida, Inc.(9, MIAMIBEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division INTERNAL AUDIT REPORT
TO:
VIA:
FROM:
Jimmy L. Morales, City Manager t:ii;::)
John Woodruff, Budget and Performance Improvement Director~
James J. Sutter, Internal Auditor~$"
DATE: ·
AUDIT:
PERIOD:
September 26, 2013
J&M Scaffolds of Florida, Inc.
Apri12010 to July 2013
This report is the result of a scheduled audit of the Roll-Off Fee Returns for J&M Scaffolds of Florida,
Inc. (J&M)
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 demonstrating that they operate
roll-offs within the City's boundaries. 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.
J&M has been in business since 1965. Their majority line of business is the rental of scaffolds and
other construction equipment. In addition, J&M provides roll-off waste service as a supplemental line of
business.
BACKGROUND
Previously, Internal Audit conducted an audit of J&M for period of October 2006 to March 2010. Our
audit assessment report dated July 30, 2010 produced an audit assessment of $772.69 which was
subsequently paid by J&M.
OVERALL OPINION
J&M 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 $2,298.53 relating to fuel surcharges were not reported.
Therefore, J&M owes the City $454.43 in franchise fees.
• J&M has not filed an annual list of accounts, however a listing was provided during the audit.
We are committed to providing excellent public service and safety to all who live, work, ond play in our vibrant, tropical, historic community.
Internal Audit Report
J&M Scaffolds of Florida, Inc.
September 26, 2013
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.
SCOPE
1. Review waste contractor's books and records to confirm that their billings were correct; their
gross receipts were correctly calculated and support the monthly franchise fee submitted to the
City.
2. Confirm that the private waste contractor timely sent the City the required reports in adherence
with the terms listed in the City Code.
3. Confirm that the private waste contractor is timely sending the required Monthly Report of
Gross Receipts along with their remittance to the City.
4. Confirm that the private waste contractor timely obtained their required annual business tax
receipt.
5. Confirm that the private waste contractor timely submitted their annual Certified Public
Accountant (CPA) Statements of Gross Receipts to the City (If applicable).
6. Confirm that the private waste contractor has obtained the required insurance in adherence
with Section 90-196 of the City Code.
7. Confirm that all monthly Roll-off Fee Return and were timely and correctly recorded in the City's
Financial System.
FINDINGS, RECOMMENDATIONS AND MANAGEMENT RESPONSES
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 $52,107.43 audited gross receipts, J&M paid the City of Miami Beach $8,965.60 in
franchise fees for $49,808.90 in reported gross receipts. J&M collected an additional amount
of $2,298.53 in gross receipt for fuel surcharges and did not report these gross receipts for the
services performed within the city limits in compliance with the City Code.
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Internal Audit Report
J&M Scaffolds of Florida, Inc.
September 26, 2013
The following table summarizes the amount due from J&M for our audit period:
2010 2011 2012 2013 TOTAL
Apr-Dec. Jan-Dec. Jan-Dec. Jan-Jul.
Audited Gross $14,018.37 $9,422.68 $15,989.48 $12,676.90 $52,107.43 Receipts
Less Report 13,805.00 9,123.75 15,130.00 11,750.15 49,808.90 Gross Receipt
Unreported (213.37) (298.93) (859.48) (926.75) (2,298.53) Revenues
Roll-off fees 38.41 53.81 154.71 166.82 413.75 due
Interest 9.74 11.72 17.09 2.14 40.69
Total Due $48.15 $65.53 $171.80 $168.96 $454.44
Recommendation(s)
J&M must remit the amount of $454.44. All subsequent roll-off fees returns should be filed in a
timely manner and remit any franchise tax due.
2. Finding -Required Reporting
J&M did not submit the following documents in accordance with the listed City Code sections
during the audit period:
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."
J&M 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.
Recommendation (s)
Going forward, J&M must comply with the designated sections of the City Codes by submitting
reports to the City Manager and Sanitation Director listing of accounts on an annual basis.
EXIT CONFERENCE
Audit findings were e-mailed on September 23, 2013 to J&M Scaffolds. We confirmed their agreement to
our findings on September 25, 2013.
JJS:CD
Audit performed by Carmin Dufour
F:\obpi\$AUD\DOC012-13\ FINAL REPORT J&M .doc
cc: Eric Carpenter, Director of Public Works
Alberto Zamora, Sanitation Director
Patricia Walker, Chief Financial Officer
Vivian Antelo, (Comptroller for J&M)
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