G7 Holdings - Garbageman.comMIAM:IBEACH
BUDGET AND PERFORMANCE IMPROVEMENT
Internal Audit Division
TO:
INTERNAL AUDIT REPORT
VIA:
FROM:
Jimmy L. Morales, City Manager
Cintya Ramos, Budget and Perforl1ilance Improvement Director ~
James J. Sutter, Internal Auditor~
DATE:
AUDIT:
PERIOD:
August 19, 2016 f!
G7 Holdings Inc. D/B/A Garbageman.com.
July 2015 to May 2016
This report is the result of a scheduled audit of the Roll-Off Fee Returns for G7 Holdings Inc. D/B/A
Garbageman.com.
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 twenty two 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.
Garbageman.com has been operating in the City of Miami Beach since October 2010. Their line of
business is junk removal, debris removal and cleaning services.
BACKGROUND
Previously, Internal Audit conducted an audit of Garbageman.com for period of October2013 to
June 2015. Our audit report dated August 27, 2015 produced an audit assessment of $20,666.13
which was paid subsequently by Garbageman.com. Assessment was based on not filing returns.
OVERALL OPINION
This audit was schedule as a result of our division's monitoring of monthly franchise fees filings
according to Sec. 90-278. This account had not been filing returns on a timely basis. Historically
the lack of non-filing of franchise returns has led to the discovery of not reporting revenues to the
City. Therefore, we scheduled our audit to confirm whether this account is in compliance.
Garbageman.com has not complied with the City Codes as it relates to reporting requirements for
Roll-off contractors.
We are commttted to providing excellent public service ond safety to off who live, work, and ploy in our vibrant, tropical, historic community.
Internal Audit Report
G7 Holdings Inc. D/8/A Garbageman.com
August 19, 2016
The following item was noted during our audit. Gross receipts in the amount of $19,790.27 were not
reported resulting in the owing of $3,562.25 in roll-off franchise fees excluding penalties and interest
to the City.
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 RESPONSE
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,
overload, extra month fees, relocation and waiting time charges should be included in reported
gross receipts. Out of 11 months audited gross receipts, Garbageman.com did not file returns for 4
months. Garbageman.com collected franchise fees from their clients in the amount of $3,562.25.
However, it was not remitted to the City. Garbageman.com is not in compliance with the City Codes.
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Internal Audit Report
G7 Holdings Inc. D/B/A Garbageman.com
August 19, 2016
The following table summarizes audited gross receipts and the amount due from Garbageman.com
for our audit period:
2015 2016 TOTAL (Jui-Dec.) (Jan-May)
Audite.d Gross $21,443.43 $32,380.56 $53,823.99 Receipts
Less Report 10,403.16 23,630.56 34,033.72 Gross Receipt
Unreported 11,040.27 8,750.00 19,790.27 Revenues
Roll-off fees 1,987.25 1,575.00 3,562.25 due
Interest 195.72 31.50 227.22
Penalties 993.63 157.50 1,151.13
Total Due $3,176.60 $1,764.00 $4,940.60
*Dunng the audit Garbageman.com paid $3,562.25 for the unreported revenues.
Recommendation(s)
Garbageman.com paid the roll-off fees once notified during the audit. However, they must pay the
interest and penalties totaling to $·1 ,378.35. Going forward, monthly reports with supporting
revenues earned should be filed on a monthly basis. If Garbageman.com continues not to pay the
City of Miami Beach the franchise fees collected from service addresses within the City, it may result
in the termination of their Business Tax Receipt.
EXIT CONFERENCE
Audit findings were emailed on August 18, 2016 to Garbageman.com. We confirmed their
agreement to our finding.
JJS: CD
Audit performed by Carmin Dufour
F:\obpi\$AUD\DOC015/16\REPORTS-G? HOLDINGS D/B/A GARBAGEMAN.COM. AUDIT FINAL REPORT.doc
cc: Eric Carpenter, Assistant City Manager
Alberto Zamora, Sanitation Director
Allison Williams, Chief Financial Officer
Greg Davis, G7 Holdings, Inc. D/B/A Garbageman.com (Owner)
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