Audit Services

City of San Rafael

Billing and Franchise Fee Audit

2004

Client Needs

For over ten years, HF&H has performed the City of San Rafael’s annual rate review of Marin Sanitary Service’s (MSS’) rate adjustment applications for collection, processing, and disposal services.  In 2004, the City of San Rafael adopted a refuse vehicle impact fee, which would be paid by all City accounts.  The Las Gallinas Sanitary District includes accounts located within San Rafael city limits and unincorporated county accounts.  In order to assess the refuse vehicle impact fee on all City of San Rafael accounts, MSS split the Las Gallinas accounts into “City” and “County” accounts.  In addition to the annual financial audit, HF&H was asked to verify the accuracy of MSS’ billing to Las Gallinas Sanitary District accounts.

HF&H Solutions

MSS supplied HF&H with an electronic spreadsheet that included a list of all 8,231 Las Gallinas accounts (residential, commercial, and apartments).  Using a sample size calculator, HF&H determined that an appropriate sample size (to be 95% confident) would be 367 accounts.  HF&H randomly chose the 10th account listed and chose every 22nd account from that point in order to get 367 randomly selected accounts. 

To verify the correct classification of the accounts, HF&H visited the Marin County Assessor’s office and researched each account to determine the account’s Tax Rate Area (TRA). 

Results

HF&H found an error rate of approximately 0.8% based on the testing methodology described above.  MSS was notified to change the misclassified accounts and any accounts located on those streets which were independently verified and found to also be incorrect.