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Home My WebLink AboutItem #09 - Discussion Item•n r CITY OF MIAMI. FLORIDA INTEROFFICE MEMORANDUM TO: Carlos F. Smith DATE: May 19, 1988 FILE: Assistant City Manager SUBJECT: Real Estate and Personal Property Taxes Receivable. FROM: anU ROdrlgue REFERENCES! Assistant Cable Communications Administrator ENCLOSURES: This is in response to your memo (see enclosure) on the above subject: Please be advised that the administration never requested that I perform any type of auditing function. I was simply instructed by the administration to report to Mr. Chhabra to work with him on a special project. Upon reporting to Mr. Chhabra, he instructed me to proceed to the Accounts Receivable and General Ledger sections of the Finance Department to collect whatever data the City of Miami had available, in order to determine the total amount of the delinquent taxes as of April 30, 1988. This data was gathered by comparing reports 16, 34, (precisely the ones you suggested in your memo), 185 and subsidiary accounts receivable ledgers in addition to communicating with supervisory staff members, (precisely what you suggest in your memo) of the Finance Department. At this time I realized that the figures available (as indicated on my previous memo) didn't give a precise answer to Mr. Chhabra's request, since, (as you have indicated in your memo) the City's data is "basically recorded on a cash basis as collected" and the unavailability of any supporting documentation makes it almost impossible to determine the actual accumulated receivables outstanding, Upon making this determination, I went to see Mr. Chhabra, and provided him with the collected data, however, at this time I indicated to him that this data wasn't reliable, and that the City of Miami wasn't in a position to determine which were the actual receivables that it was entitled to collect. Mr. Chhabra acknowledged my findings and instructed me to proceed to the Dade County Tax Collector Office to obtain the proper Dade County data as of April 30, 1988, in order to determine the actual and truly total amount of delinquent taxes receivable. Upon arrival at Dade County, I was able to obtain the total delinquent taxes as of April 30, 1988 along with their supporting documents which included accumulative breakdowns by category type and in some categories a yearly breakdown. As you have acknowledged in your memo, and since you currently possess these supporting documents, the figures provided are precisely the correct totals that Mr. Chhabra had requested, (as indicated on my previous memo). )(Sc. s-51-0� SS-467- r At this time realized that there was �n obvious discrepancy between the City and County figures, of more than five million dollars and that while the County was able to provide the im"mmediate accrual and accumulative records along with the and proper documentation, the City of Miami unfortunately was not able to provide any of this information. At this point, I made it my responsibility to document in a professional and factual fashion my findings, without any comments, suggestions and/or recommendations, in order that Mr. Chhabra and or the administration could adopt the necessary measures after determining thru an extensive audit the following: 1. Is the City of Miami able to provide the same up to date factual response that Dade County has provided? 2. Can the City of Miami take the necessary steps to prevent the current situation from reoccurring? Therefore, be advised that all implications in your memo of not following accounting and auditing procedures are unfounded and unsubstantiated, since the function I was asked to perform was strictly that of collecting valid data in reference to the total delinquent taxes for the City of Miami as of April 30, 1988. In conclusion, I have always performed excellent quality of work, which is substantiated by my job performance appraisals; and I believe that due to my education, experience, and performance history, is the reason why I was chosen to assist in this project, although the position that I currently hold as Assistant Cable Communications Administrator doesn't require that I perform any of these functions. Furthermore, the information stated in my previous memo are factual, accurate, and can be substantiated by the previous reports mentioned. Therefore, I failed to see why you have chosen to professional attack my performance in this project, when my intent as I'm sure that it's yours also; is to make sure that the City of Miami collect all of it's outstanding revenues in order to deal with the current financial crisis and I believe that you as a senior member of the administration who is fully aware of the priorities of the City of Miami, should instead congratulate me for a job well done and request my assistance in any future endeavors which are intended to improve the financial condition of the City of Miami who has proven to be a generous and compassionate employer during the time that I have served as one of its employees. Thank you. MR/mld cc: Cesar H. Odio Robert E. Parcher Sujan Chhabra AS-46 004 • M CITY OF MtAMI. FLORIDA INTER -OFFICE MEMORANDUM MAY 19 • TO: DATE OF comms Manuel Rodriguez May Lr 88 Computers Department SUBJECT: Real Estate and Per- sonal Property Taxes Receivable FROM: REFERENCES: 4e,th Assistant City Manager ENCLOSURES: The administration's request to Mr. Chhabra and yourself to conduct an audit of the collection of property taxes by Dade County had the purpose of seeing that the City taxes are properly assessed and collected; and to determine the detail and collectibility of delinquent receivables. The reports the City receives from the County indicate the amount of accumulated delinquent taxes,of concern to us, and prompted, us to request this audit. We expected you to follow accounting and auditing procedures to obtain the above information. Instead, we find that you have prepared a memo to Mr. Chhabra dated May 13, 1988, which is misleading and inaccurate. This memo demonstrates that you have not followed auditing procedures nor discussed the information with senior staff or supervisors of the Finance Department. The information shown is not comparative at all since it is for different periods and on very different accounting bases. The deliquent balances, per Dade County reports, are on an accrual basis, i.e., total amount of outstanding taxes and penalties as of April 29, 1988, in the amount of $7,838,270, of which approximately $3.5 million are personal property taxes and $4.3 million are real estate taxes. The City records are kept on a "modified accrual" basis,as required by generally accepted accounting principles. Basically, they are recorded on a cash basis as collected, and at year end, an accrual representing collections for the following October 1 through November 30 period is recorded. The amounts reflected in your memo were accruals recorded as of September 30, 1987 except that your memo was incorrect in the following: Ad Valorem taxes receivable in the general obligation debt service fund was $164,149 as of September 30, 1987. Franchise and utility service taxes receivable as of September 30, 1987, of $314,362 in the debt service fund, and $107,869 in the special revenue fund, were incorrect- ly identified as delinquent property taxes. 98-4si•! -,t`7 m ;d} Manuel Rodriguez May Ili 1988 Page 2 If you had performed one or more of the following auditing procedures, you would have properly identified balances in City records: . Review of trial balances, reports 16 and 34, that clearly show taxes receivable as beginning of fiscal year 88 balances. Review of the journal entries recording above balances which clearly identify them as accruals recorded at year end for fiscal year 87, and then automatically becoming October 1, 1988 balance. Review of reports 34 for the General Obligation Debt Service fund would show that accrual of $314,362 was not recorded in that fund. Instead it appears under the Utilities Service Tax Debt Service Fund. Identification of the receivable under the "miscel- laneous" caption which is not for property taxes. Or simply a conversation with the Director or Assistant Director of the Finance Department would have cleared most of these misconceptions. We expect you to perform the type of quality work that is 1 City 01' MIAMI, PI.04111A INTEUV60PPICI= MrEM01VANbUM tag Wan Chabra Witt May 160 1988 susACt: Real Estate a n d Personal Property Taxes Receivable raoM� a uel Rodr uez aEFEpENCEB: ENCL6§unEs: As per your request I met with the Dade County Tax Collector Office and the City of Miami Accounts Receivable and General Ledger Sections regarding the subject matter. The following is a report of my findings: Taxes Delinquent as of 4/30/08 As Per Dade County records: Operations - General Fund $ 6,360.185 Debt Service 1-365:670 Miscellaneous 112,415 $ 7,838,270 As per City of Miami records: Operations - General Fund Debt Service Miscellaneous MR:sg cc: Carlos F. Smith Robert E. Parcher $ 2;193;519 478,511 107,869 i $ 2,779,899 98-46'7. *FAMIS152* C I T Y O F M I A M I RPT RFC:REPCRT NO. 16 PAGE- 16- 2 TRIAL BALANCE OF GENERAL LEDGER ACCOUNTS BY FUND 05/O7/88 1 AS OF 04/30/83 ,fit FUND 01 GENERAL f4ND GEN LED TRANSACTIONS* CURRENT YEAR TO DATE C' ACCOUNT YEAR NUMBER ACCOUNT TITLE BEGINNING BALANCE DEBIT CREDIT BALANCED ENO Of DAY 101 EQUITY IN POOLED CASH 11 #604#631.02 135o030o265.65 11 08310811.04- 2808030085.63 108 TAXES RECEIVABLE - REAL CURRENT 8303550043.66 .00 .00 8303550043.66 109 TAXES RECEI_VAeLE-PERSONAL CURRENT 1208910043.58 .00 .00 12*3910043.58 110 RESERVE FOR CURRENT TAXESOREAL 83�5�5'043.66- .0 83*335i 4 - III RESERVE FOR CURRENF TAXES.PERSONAL 1208910043.58- .00 .00 1208910043.58- ' 114 DELINQUENT TAXES RECEIVABLE -REAL 101350737.18 1#467*768.85 4090987.12- 0193&5I8.91 118 ACCOUNTS RECEIVABLE -RESERVED 6 0401.13 229*546.55 u 0 - • 119 ALLOWANCE FOR ACCOUNTS RECEIVABLE 9C6o139.50- 657#630.33 5230872.82- 7720381.99- 120 ACCOUNTS RECELVRbLE 745o201.09 40097i350.06 402900696.10- 551*855.05 121 ASSESS'MEHT LIENS f; C E I VA 8L 257OZ81.a9 49#7T0 - 29uv 2.42. 28 131 DUE FROM OTHER FUNDS 3o2950532.44 .00 .00 3o295oS32.44 133 DUE FROMOTHER GOVERNMENTAL AGENCIES Io48SO431.99 39o809.58 105230214.89- 2#026.68 733-PREPAID _ EXPENSES !l*4Z3wY5 1200140.00• - 49*623.93 156 DEPOSITS AND PREPAID FEES 90668.75 .00 .00 90668.7S 157 TRAVEL_ AND MISC ALWANCES 55*827.33 81*167.00 690668.19- 670326.14 179 LOAN RESERVE 0 f a. a a 000 _ 150000.00 201 VOUCHERS PAYABLE Io2210630.30- 1203290716.78 11030So965.01- 1970878.53- 209 SALES TAX PAYABLE 7.50 2*748.21 60947.42- 40191.71- 216 AtCRUEo- RAGES ACID SALARIES o o - 5#026ol83,82 joazj#359.99- • • - 220 DEPOSITS REFUNDAb.E 5040755.64- 3o0470093.80 20972o69S.93- 430o357.77- 223 PREPAID INCOnE 108860985.40- 2*092#996.40 2070291.00- 10280.00- 230 /6CCOUNTS PAYABLE o - 0 3: o - 0 6. - 239 RETAINED PERCEkTAGES PAYABLE .00 160564.43 230283.70- bo719.27- 301 FUND BALANCE 1101510225.02- .00 .00 11o1S1o225.02- BUDGEtEG REEErPT-S • o - • o - 316 APPROVED APPROPRIATIONS .00 219#292#806:00 33oT080477.00- 18505840329.00 321 RESERVE FOR PURCHASE ORDER REQUISITION 1.00 .00 .00 1.00 RE-S E V`E-FQit-ENCUK3YA C7 - - 0 0 . $4 l2o2;Ga#,O8:p.a0- o o - 331 RESERVE FOR LIENS RECEIVABLE 2570281.89- 160739.61 490700.00- 2900242.28- 401 ESTIMATED REVENJE - REGULAR .00 1840621o348.00 .00 134#621#348.00 4 - REVENUES - REGULAR Go 1*775,078.770 0 - 0 30 - 412 REVENUES - TRANSFERS IN .00 .00 12o9070948.00- 120907*948.00- 4_2_0 APPROPRIATIONS REGULAR .00 33oT08o477.00 21902920806.00- 1850584.329.00- 431 _-_ EXPENDITURES - REGULAR .00 96- ,Z oifo o - o bo459'.63 r 432 EXPENDITURES - TRANSFERS OUT .00 90393o523.00 .00 90393eS23.00 440 ENCUMBRANCES - REGULAR 1.00- 70297o638.49 4e450o585.72- 20847,05).77 441 PRE -ENCUMBRANCES I .0-0�4i95 044y`11 4j,641,472.- -so 809799-' 007 oorAo vcao aurc r+ c&or ue arrrnliuT nn o? _,Pcd. 41 o'1 _mac• 4'2_ nn *FAMIS152* C I T Y O F M I A M I RPT RFC:REPCRT NO. 16 PAGE- 16- 3 RIAL BALANCE OF GENERAL LEDGER ACCOUNTS 8Y FUND 05/07/88. AS OF 04/30/88 FUND 10 SPECIAL REVENUE FUNDS fifjIt-LIED TRANSACTIONS* CURRENT YEAR TO DATE ACCOUNT YEAR NUMBER ACCOUNT TITLE BEGINNING BALANCE DEBIT CREDIT BALANCE• ENO OF DAY 101 EQUITY IN POOLED CASH 3.097.020.19 4.110+385.02 6.204.960.45- 7+UUt•444.rc 114 DELINQUENT TAXES RECEIVABLE -REAL 107.869.18 .00 .00 C107,869.10 2 119 ALLOWANCE FOR AC_CGiNTS RECEIVABLE 1+04O.98- _ .00 •00 + 8- 3 120 ACCOUNTS RECEIVAb_E • Q5.24 4• 56.79 • - •16�Z.66 a 133 DUE FROM OTHER SOVERNMEWTAL AGENCIES 60+014.04 974.580.75 1.438.250.4d- 139.344.33 4 155 PREPAID EXPENSES 1.500.00 .00 1.500.00- .00 157 TRAVEL AND HI SC ADVANCES 77 1171 REHABILITATION LUAN 952.969.55 110.438.00 ' .00 1.063.407.55 175 SINGL_E-F_A_MILY RE_HA3. LOANS 20.818.00 .00 .00 20.818.00 y 17d COMMi DEV REHA6ILITATION LOAN IS • 9.f - 9i0gf:6 • 0 178 UDAG 2ND MORTGAGE LOANS 36.409.27 .00 637.59- 35.771.68 179 LOAN RESERVE 1.297.126.53- 8.475.64 110.438.00- 1.399.088.89- y i'-VOUCHERS �a ABL • - • ' ' 93 ' • :j 209 SALES TAX PAYABLE 7.50 2.710.37 2.997.53- 279.66- 216 ACCRUED WAGES AND SALARIES 165+529.14- 190+840.85 142.243.58- 116.931.87- s DEPIOSTTFU'WD7 C _ + - • • - 0 a 5 3 a67- ri30 PREPAID INCOME 25.00- .00 7.750.00- T.775.00- 223 ' 223 ACCOUNTS PAYABLE 199.00- .00 8.444.00- 8.643.00- s 93- TATNF�JTCt u - • • 00 3.427•626.01- 301 FUND BALANCL 3.427.626.01- .00 .00 �i 315 BUDGETED RECEIPTS .00 .00 18.476+799.00- 28.476.799.00- 16 APPwuU 650100763.cu• ' 00- 3000140650.00 322 RESERVE FOR ENCJM3RANCES - CURRENT .00 3+337.224.90 4.673.760.86- 1.336.535.9o- d 401 ESTIMATED REVENUE - REGULAR .00 28.476.799.00 .00 2$.476.799.00 412 REVENUES - TRANSFERS IN .CO .00 347+925.00- 347.925.00- 420 APPROPRIATIONS - REGULAR .00 38.091.113.00 !8.105.763.00- 30.014.650.00- -43i_EXPENDIT-UiiC: - Relu1A9 luu 6#149*058.20 3• t6:<46. 97 432 EXPENDITURES - TRANSFERS OUT .00 112#823.05 .00 112*823.05 1 440 ENCUMBRANCES - RL6ULAR .00 1.317*724.47 751.481.50- 566.242.97 i'- 99 441 PRE=ENCUMidRAhhCES • • + a,• j 997 PRIOR YEAR ENCUMBRANCE CLEARING ACCOUNT .00 9+921.24 9.921.24- .00 k *FAMIS152* FUND 20 DEBT SERVICE FUNDS C I T Y O F M I A M I RPT RFC:REPCRT NO, 16 TRIAL BALANCE OF GENERAL LEDGER ACCOUNTS BY FUND AS OF 04/30/88 PAGE- 16- 4 05/07/88 GEN_LEDs TRANSACTIONS* CURRENT YEAR TO DATE Cam' ACCOUNT YEAR NUMBER ACCOUNT TITLE BE6INNING BALANCE DEBIT CREDIT BALANCE• ENO Of DAY 101 EQUITY IN POOLED CASH 3.416.177.77 40.744.961.39 28.537.4 1.66- 15,623 7 _50 103 CASH WITH FISCAL A3EKTS 4.217.192.14 121.467.19 4.214.836.19- 1230823.14 1.08 TAXES - REAL CURRENT 20.762.521.56 .00 .00 20.762#521.56 _RECEIVABLE 1D�4iAX ES REtEIYAaLc=PER�OMA-�fUk i�ENT 3*2100970.31• z I 0-,V7U-.-31 110 RESERVE FOk CURRENT TAXES•REAL 20.762.521.56- .00 .00 10.762•S21.56- III RESERVE FOR CURRENT TAXES•PERSONAL 3.210.970.31- .00 .00 3.210.970.31- TV4 DELINQ"NT-r4WM-2-CCEIYABLE -REAL • • 119 ALLOWANCE FOk ACC3JNTS RECEIVABLE 15.620.02- .00 .00 15.620.02- 120 ACCOUNTS RECEIVABLE 2.342.776.78 1.776.22 2.357.299.32- 7.253.68 1-Ti-ASS £SSA NT CfEKS kEfE"IYa�t • • . - • . 0 122 ASSESSMENT LIEN CERTIFICATES 28.134.21 1#435.61 24.491.88- 5.077.94 129 TRASH LIENS kTECEtVABLE 10•S13.36 9.390.00 2.386.15- 17.517.21 7[Ti Z• - 2#9150113.91 2o.572.25- 207 DUE TO OTHER FUNDS 2.844.362.44- .00 .00 2.864.302.44- 216 ACCRUED WAGES AND SALARIES 843.75- 3.494.99 2.651.24- .00 22'S-PREPAID- INCOHc • - UU Go 4*150.00- 2313 ACCOUNTS PAYABLE .CO 10451.99 2.250.80- 798.81- 231 BONDS PAYABLE 2.405.247.00- 6.035.493.95 6.185.OGO.00- 2.554.753.05- 232 INT EREST PAYABLE • • - • •755.61 1#51 l,qjq.u6- 1#3 a I • - 301 FUND BALANCE 3.676.947.99- .00 .00 3.676.947.99- 315 BUDGETED_ RECEIPTS .00 .00 52#816.366.00- 52.816.366.00- 316 APPROVED APPROPRIATIONS • • .0 t • • - • iii33-.OQ 322 RESERVE FOR ENCUMBRANCES - CURRENT .00 28.273.16 38.507.46- 10#234.30- 330 RES_ERVES 177.675.00- .00 .00 177.675.00- 331 RESERVE FOR LIENS RECEIVABLE i • - • • - • • - 401 ESTIMATED REVZNUE - REGULAR .00 52.816.366.00 .00 52.816.366.00 411 REVENUES - REGULAR .00 970.931.28 34.921.910.77- 33.950.979.49- 4TZ--REVENUES=--TRANS"F - 529- - 420 APPROPRIATIONS - REGULAR .00 25.661.202.00 77.855.635.00- 52.194.433.00- 431 EXPENDITURES - aLGULAR .00 14.946.869.10 731.40- 14.946.137.70 432 EXPENDITURES - TkAhSFERS OUT .0b 13.196.362.00 0�3•i-96. 6�.00 440 ENCUMBRANCES - REGULAR .00 726.78 538.54- 188.24 441 PRE -ENCUMBRANCES .00 37.780.68 27.734.62- 10i046.06 999 _ GENERAL CLEAkINa ACCOUNT .00 i27.455.a 42 G5S.8-- .00 TOTALS THIS FUND .00 244.929.137.33 244.929.137.33- .00__