Auditors took inventory of carts in this Charlotte County, Fla., neighborhood. The full audit took several months because auditors had to pull together different types of data. Photo: SCS Engineers
Franchisees owe Marion County nearly $200,000 in additional franchise fees for the most recent fiscal year. These funds will be poured back into the solid waste department's services.
— Rogoff is a project director specializing in solid waste management and financial planning with SCS Engineers, Tampa, Fla.
Top reasons to conduct an audit- Responds directly to specific citizen complaints
- Establishes measurable benchmarks for franchisee performance
- Knowing that everything is potentially auditable keeps franchisees “on their toes”
- Ensure customers are being billed correctly
- Ensures that you are receiving all fees due per local government ordinance or contract
- Establishes reimbursement for damages to the public right of way (e.g. maintenance costs from the impact of collection trucks on local streets and arterials)
- Generates funds to support specific solid waste management objectives (e.g., recycling programs, solid waste facilities, etc.)
- Generates additional revenues for local government to improve public infrastructure
- Provides funds that are now being paid from general fund (e.g., code enforcement, storm-water, etc.)
- Provides documentation when franchise renewals are being considered.
Top 10 auditing issuesWhat to ask when working with potential solid waste franchisees.
- What is the definition of gross receipts or gross revenues in the franchise agreement or ordinance?
- Should sales tax be charged for solid waste collection services?
- Are service area boundaries clearly defined and addressed during customer signups?
- What kind of customer software does the firm use? Can it easily provide detailed reports?
- What level of accounting staff turnover is the franchisee experiencing?
- Do the customer records provided match actual experience gained by field audits?
- How many “write-offs” of invoice credits is the franchisee experiencing?
- Are there mathematical errors in reports provided to the local government?
- What is the level of customer satisfaction? What are the statistics on franchisee performance?
- Are billing practices standardized?