Audit Services

City of Pacifica

Billing and Franchise Fee Audit

2006 - 2007

Client Needs

The City needed a consultant to review:

1. The timing of the distribution of customer statements;
2. The customer billing records, to determine whether or not the rates match the City-approved rate sheets for the service levels;
3. The customer billing records, to determine the proper application of the rate increases resulting from the rate applications submitted by Coastside Scavenger to the City for the rate years ending July 31, 2002 through July 31, 2005;
4. The processing of delinquent accounts to determine the proper inclusion of customers; and,
5. The franchise fee payments to the City.

HF&H Solutions

We reviewed the franchise agreement to determine the proper billing and delinquent account processing procedures.  We selected a sample of customer billing statements from each of the rate years to test for compliance with the procedures described in the franchise agreement.  We obtained the rate sheets for each of the years under review and recalculated the rates based on the City-approved rate increase.  We selected a sample of months to test for the proper calculation of franchise fee payments to the City.  The testing procedures included: 1) verification of proper cash receipts; 2) recalculation of franchise fees; and 3) confirmation of receipt by the City.

Results

Our results noted there were minor errors in the commercial rate calculations and minor mathematical errors in the calculation of the franchise fee payments.  As a result of our review, the City was assured the Company’s billing practices and franchise fee remittance procedures were sufficiently in compliance with the franchise agreement.