FY 2011-12 ANNUAL REPORT THE OFFICE OF COMMISSION AUDITOR
BOARD OF COUNTY COMMISSIONERS THE OFFICE OF COMMISSION AUDITOR MEMORANDUM TO: FROM: Honorable Chairman Frank Attkisson, and Members, Board of County Commissioners Horace Nwachukwu Commission Auditor DATE: December 14, 2012 SUBJECT: The Office of Commission Auditor s FY 2011-12 Annual Report The Fiscal Year 11-12 Annual Report for the Office of Commission Auditor (OCA) summarizes the accomplishments of the office, to include audits completed, follow-ups, Tourist Development Tax (TDT) collections and enforcement and other miscellaneous activities. During the year, OCA continued to provide the highest quality professional services by: Completing six (6) audit and non-audit service projects, following-up on previously unresolved findings from prior audits, providing audit technical assistance for various projects and inquiries, and continuing work on ongoing audit and non-audit service projects; Initiating Compliance and Enforcement efforts that yielded $1.09 million Reviewing all BCC agendas; Providing detailed financial costs and budgetary impacts analysis for County proposed projects with a fiscal impact; and Responding to formal and informal requests from the BCC on important County matters. The nature and scope of these accomplishments clearly demonstrate our commitment to valueadded services and the dedicated efforts of our talented professionals. Based on feedback received from the Board, our efforts have assisted their decision-making by helping to ensure governmental accountability and transparency. We look forward to continuing our work with the Board in meeting the challenges facing Osceola County.
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Table of Contents INTRODUCTION... 1 MISSION STATEMENT... 2 OBJECTIVES... 2 2011-12 WORK PLAN... 2 Recurring Annual Audits... 2 Audit Projects in Progress as March 16, 2012... 2 Non-Audit Services... 3 Follow-up to Completed Audits... 3 INDEPENDENCE... 5 QUALITY ASSURANCE... 5 CONTINUING PROFESSIONAL EDUCATION (CPE)... 5 CERTIFICATIONS... 6 TABLE OF ORGANIZATION... 6 2011-12 ACCOMPLISHMENTS... 7 INTERNAL AUDITS... 7 1. Follow-Up On Countywide Payroll Audit Issued May 3, 2012... 7 2. Audit Of Construction Management At Risk Services For John Young Parkway Improvements Issued June 8, 2012... 7 3. Follow-Up Of The Inmate Trust Fund Cash Collections And Deposit Audit... 9 NON-AUDIT SERVICES... 10 1. Staff Support For The Right Of Way Acquisition Audit... 10 2. Staff Support For Online Travel Companies Tax Litigation... 10 3. Economic Analysis Of A Solar System On The Parking Garage... 10 ON-GOING PROJECTS... 11 UPCOMING AUDITS... 11 REVENUE AUDITS... 13 TAX COMPLIANCE AND ENFORCEMENT... 13 EXHIBIT I... 15 Organization Of County Government... 15 EXHIBIT II... 17 Tourist Development Taxes... 17 EXHIBIT III... 23 Public Service Tax... 23
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Osceola County The Office of Commission Auditor FY 2011-12 Annual Report INTRODUCTION The Office of Commission Auditor (OCA) was established and codified in Section 2.3 (D) of Osceola County Home Rule Charter on October 1, 1992. It requires the Commission Auditor to evaluate the internal financial control of the County and perform such other duties assigned by the Board of County Commission (BCC). To the degree necessary to fulfill the responsibilities of the office, OCA: Conducts financial, compliance, economy and efficiency, and performance audits of County government; Conduct financial reviews of items or business matters that will either expend or receive funds, property, goods or services which have been scheduled or will be scheduled for BCC s consideration; Upon BCC request, provide a written report or opinion on any transaction or business practice relating to County government; Review any matter related to County business upon the request of the Board; The Commission Auditor is also charged with enforcing and auditing the collection and remittance of Tourist Development Tax (TDT) by all dealers and property management companies. Sections 13.61 through 13.68, Osceola County Ordinances authorizes the Commission Auditor, or designee(s), to use any lawful means in carrying out the duties prescribed in accordance with this section and F.S. Chapters. 212 and 213. To accomplish this objective, OCA conducts revenue audits which verify dealer compliance with tax statutes and/or County ordinances with a goal to collect any funds due to Osceola County. Revenue audits include Tourist Development Tax (TDT) audits, and Public Service Tax audits. The Tax Compliance and Enforcement Division of OCA use record inspection, tax warrants and garnishments to bolster collection of TDT. A list of legislation pertaining to OCA duties is appended as Exhibit 1. 1
MISSION STATEMENT To provide independent and objective assurance and advisory services designed to add value and promote effective and efficient operation of Osceola County government. OBJECTIVES The objectives of the OCA are: 1. To conduct audits, management and legislative analyses, and program evaluations. 2. To determine the extent to which legislative policies are being faithfully, efficiently and effectively implemented by County personnel and provide periodic reports to the BCC as needed. 3. To review BCC agenda items and evaluate the rationality and fiscal impacts of the proposed transactions and/or legislation. 4. Upon request, provide the BCC with memoranda containing independent assessment of pending legislation, issues and proposals coming before the BCC. 5. Upon request by the BCC, recommend fiscal analyses to County policies, services and contracts. 2011-12 WORK PLAN The annual work plan for OCA was approved by the Board of County Commission (BCC) on March 16, 2012. It was developed using a Countywide risk assessment with a view of addressing what we considered the highest priority areas, while limiting the scope of work to what we can realistically accomplish with the staff resources available. Below is a list of the project included in the work plan: 1. Audit of Internal Controls for the Fire Rescue and Emergency Medical Services (EMS) 2. Audit of Permitting Process in the Community Development Department. 3. Audit of County-wide Grants Oversight 4. Audit of Animal Control Proprietary Revenue 5. Audit of Procurement Processes 2
Recurring Annual Audits 1. Inmate Welfare Fund Audit for Fiscal Year 2011 Audit Projects in Progress as March 16, 2012 1. Audit of Construction Manager at Risk Services for John Young Parkway Improvements 2. Audit of Neighborhood Stabilization Program (NSP) 1 Non-Audit Services 1. Staff Support for the Right of Way Acquisition Audit. 2. Staff Support for the Online Travel Companies Tax Litigation Follow-up to Completed Audits 1. County Payroll Audit 3
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Internal Audit is defined as an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. INDEPENDENCE Generally Accepted Government Auditing Standards (GAGAS) Chapter 3.02 requires the audit organization and the individual auditor, whether government or public, must be independent. OCA is effectively organized reporting to the BCC which mitigates the effects of structural threat to independence. OCA s work products are intended to add value to the BCC s consideration of policies, practices and operations of Osceola County and shall be based on facts, evidence and analysis, without interference or undue influence by outside elements. Independence permits employees to render the impartial and unbiased judgments essential to the proper conduct of audits, analyses, and other non-audit services. To enable proactively addressing and avoiding potential impairments to independence, each professional OCA staff member is required to complete and sign an Annual Independence and Ethics Statement listing any known impairments to independence. The form is approved by the Commission Auditor and kept in OCA s personnel folders. A copy of OCA s Annual Independence and Ethics Statement is appended as Exhibit 2 QUALITY ASSURANCE OCA has instituted a continuous quality assurance process as required by GAGAS by: a. Developing policies and procedures designed to provide reasonable assurance of complying with professional standards b. Emphasis on performing high quality work c. Ongoing, periodic assessment of work completed on audits and other projects d. Documentation of lessons learned at the end of every project e. Annual summary and review of the continuous monitoring process to identify and improve on systematic or repetitive issues. CONTINUING PROFESSIONAL EDUCATION (CPE) OCA is committed to maintaining competence through learning and other forms of professional development. Staff members are required to complete at least 24 hours of CPE every 2 years that directly relates to government auditing, the government environment or the specific or unique environment in which the audited entity operates. Auditors who are involved in any amount of planning, directing, or reporting on GAGAS audits and auditors who are not involved in those activities but charge 20 percent or more of their time annually to GAGAS audits should also obtain at least an additional 56 hours of CPE (for a total 5
of 80 hours of CPE in every 2-year period) that enhances the auditor s professional proficiency to perform audits. Auditors are also encouraged to further their education by studying for professional certifications and graduate degrees, resulting in a more qualified auditing staff. CERTIFICATIONS OCA has three (3) Certified Internal Auditor (CIA)s, four (4) Certified Government Auditing Professional (CGAP)s, two (2) Certified Fraud Examiner (CFE)s and three (3) auditors with Certification in Risk Management Assurance (CRMA). TABLE OF ORGANIZATION Osceola County Citizens Board of County Commissioners Commission Auditor ADMINISTRATIVE AUDIT COMPLIANCE & ENFORCEMENT 6
2011-12 ACCOMPLISHMENTS Internal Audits 1. Follow-up on Countywide Payroll Audit issued May 3, 2012 At the conclusion of each audit assignment, the final report issued by OCA includes significant control weaknesses, non-compliance with policies and procedures, and violations of laws and regulations, if any. We work with management throughout the audit process to develop recommendations and action plans to address these departures. The objective of this follow-up audit was to evaluate whether corrective actions has been taken to address findings and recommendations from Countywide Payroll Audit report issued May 13, 2010. Of the 29 recommendations contained in the audit report, management has implemented 28 while one was partially implemented. 2. Audit of Construction Management at Risk Services for John Young Parkway Improvements issued June 8, 2012 Major Findings and Conclusions Finding 1 Owner Direct Purchase Program Cost Savings Not Realized The County did not take advantage of the State of Florida s Owner Direct Payment (ODP) Program for the JYP improvements project which could have generated a cost savings to the County in the amount of $182,242. Finding 2 Create Tools to Document Key Steps Performed (i.e., Checklists) Public Works did not have a tracking or documentation method for complex professional services and construction contracts. Numerous steps are required to create and execute professional services and construction contracts. These contracts involve complex laws and work flows and often continue over long periods of time which in turn may lead to changes in oversight personnel. These factors increase the risk probability that some steps may not be performed or may not be completed in a timely manner. Finding 3 Update Project Information on the Construction Manager s (CM) Project Website CM website was not maintained in compliance with the CM project manual. Although a website was established in September 2008 to keep Osceola County residents, subcontractors and the public informed as to the current status and progress of the JYP road improvement project, the CM did not keep JYP project s website current. We noted that as of May 26, 2011, the website was only updated through September 2009. We also observed that the project 7
schedule information database which contains construction documents, contracts, and other pertinent JYP project information was not updated. Finding 4 Architect s Certification Should Accompany Construction Manager Applications Our review of 20 American Institute of Architects (AIA) Application and Certificate for Payment, Document G702 submitted during our audit period showed that they were not certified by the architect/engineer on record in compliance with Article 8 of the CM Agreement for the JYP improvement project. The architect s signature on the monthly payment request(s) certifies to the County that the quality of work performed meets the contract requirements while also serving as an excellent control that the payment request includes only appropriate and approved project costs. Finding 5 Obtain Supplier Survey Forms for Subcontractors Our review of the subcontractor documentation showed that one of the CM s subcontractors did not submit the supplier survey forms for their subcontractors. Subcontractors received approximately $11.6 million or 41% of the total Guaranteed Maximum Price (GMP) of the JYP road project. Non submission of the supplier survey form constitutes a violation of the County s Local Vendor Preference Policy. Finding 6 Review, Update and Adopt Draft Procedures At the time of our fieldwork, Public Works Department had not adopted the draft procedures developed by a consultant hired by the County to assist with construction processes for the JYP Project. As a result, there were no standard policies and procedures to ensure management s directives were carried out correctly and effectively. Finding 7 Submit Invoices for Toll and Phone Charges CM did not provide detailed documentation to support monthly payment requests for toll and phone charges billed to the JYP Improvement project. Using a random sample, we selected three (15%) of 20 payment requests for toll and phone charges submitted during the audit period to test for validity, completeness, and accuracy. CM only maintained an excel spreadsheet listing the toll and phone charges made during the month without supporting invoice documentation to verify the validity and accuracy of these charges. 8
Corrective Actions Taken By Management Public Works Department concurred with the findings and recommendations cited in the report and had started implementing processes to mitigate any risks and improve their processes. Significant findings which have not been fully addressed by Management None 3. Follow-up of the Inmate Trust Fund Cash Collections and Deposit Audit At the conclusion of each audit assignment, the final report issued by OCA includes significant control weaknesses, non-compliance with policies and procedures, and violations of laws and regulations, if any. We work with management throughout the audit process to develop recommendations and action plans to address these departures. The objective of this follow-up audit was to evaluate whether corrective actions have been taken to address findings and recommendations from the Inmate Trust Fund Cash Collections and Deposit Audit issued October 13, 2010. Of the 37 recommendations contained in the audit report issued October 13, 2010, management has implemented 33 and 4 are planned for implementation. 9
NON-AUDIT SERVICES 1. Staff Support for the Right of Way Acquisition Audit On August 1, 2011, BCC approved a professional services agreement with Keystone Field Services LLC, for an audit of the Right Of Way Acquisition Program. OCA provided staff support to external auditors in their efforts to gather information necessary to achieve their stated objective. Staff also assisted in report writing and participated in exit conferences. Report was issued to the BCC on April 30, 2012. 2. Staff Support for Online Travel Companies Tax Litigation On August 27, 2009, the BCC agreed to retain the law firm of McKool Smith, P.C. to represent the County as outside counsel regarding Tourist Development Tax litigation on Online Travel Companies. OCA has provided staff support to attorneys in their effort to gather necessary information on the Tourist Development Tax sought to be collected as part of litigation. OCA also scheduled appeals hearings for Online Travel Companies with only one company taking advantage of the process. The County Attorney s Office is working with McKool Smith, P.C to conclude the litigation. 3. Economic Analysis of a Solar System on the Parking Garage On December 15, 2011, the BCC requested the OCA conduct an analysis to assess the economic benefit of installing and utilizing solar power on the County s parking garage that was under construction. We evaluated the startup costs, operating costs, and revenue projections of installing a solar system. The primary cost of the project included the installation (parts and labor), and the cost of operating and maintaining the solar system. Based on a pro forma received from the Florida Municipal Power Agency and using 5% as the County s cost of capital, we calculated the Return On Investment (ROI), Net Present Value (NPV), Internal Rate of Return (IRR) and the payback period. A report was issued to the BCC on January 23, 2012. 10
ON-GOING PROJECTS 1. Audit of Animal Control Proprietary Revenue Status: Project is in report writing phase. 2. Audit of Neighborhood Stabilization Program Status: Project is in report writing phase. 3. Follow-up Audit of Inmate Trust Fund Cash Disbursement in Correction Department Status: Fieldwork in progress. 4. Follow-up Audit of Admission, Classification and Release in the Correction Department Status: Fieldwork in progress. 5. Follow-up of Audit of Internal Control in Correction Department Status: Fieldwork in progress. 6. Audit of Procurement Processes Status: Fieldwork in progress. 7. Audit of Internal Control for the Fire Rescue and Emergency Management Services (EMS) Status: Planning phase in progress. UPCOMING AUDITS 1. Audit of Permitting Process in the Department of Community Development 2. Audit of Countywide Grants Oversight 3. Follow-up to Audit of Revenue Fees in the Building Department 4. Follow-up to Audit of Construction Manager at Risk for John Young Parkway Improvements 11
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OCA enforces the collection and remittance of the tourist development tax by all dealers and property management companies. REVENUE AUDITS At the inception of FY 2011-12, OCA had one employee with duties and responsibilities of conducting revenue audits. In July 2012, another auditor was hired to assist in conducting revenue audits. OCA completed eight (8) audits with the objective of determining if TDT is paid in accordance with both Florida Statues and Osceola County Code of Ordinances. Revenues collected as a result of the audits for FY 2011-12 was $98,502. TAX COMPLIANCE AND ENFORCEMENT At the inception of FY 2011-12, OCA employed three (3) Compliance and Enforcement Officers. One (1) of the employees separated from the County in April, 2012. With the use of lawful means to carry out the duties prescribed in accordance to Chapter 212 and 213, Florida Statutes, and Sections 13.61 through 13.68, Osceola County Ordinances, including, but not limited to filing a Tax Warrant against a taxpayer s assets with the Clerk of Courts in Osceola County or any other County in which the taxpayer has assets, Table below shows the activities of the Compliance and Enforcement Unit of OCA in FY 11-12: Compliance and Enforcement Activity for FY 2011-12 Payments Processed 571 Jeopardy Assessment Letters (JAL) issued 296 Appeals Reviewed 77 Tax Warrants Recorded 132 Tax Warrant Satisfactions Recorded 52 Bank Garnishment Letters Issued 14 Taxpayer Account Change Form Processed 124 Application Update Letters Issued 135 Field Visits Conducted 81 Bankruptcy Notifications Memos Issued 21 Returned Check (NSF) Letters Issued 36 Subjectivity Letters Issued 28 Voluntary Disclosures 1 Court Order Memos Issued 6 Revenue collected as a result of compliance and enforcement efforts for FY 2011-12 was $992,572. In total OCA collected approximately $1.09 million in outstanding tourist development taxes owed to the County. 13
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EXHIBIT I Organization Of County Government Section 2.3. - Executive Branch. D. Office of Commission Auditor. The County Commission shall appoint an auditor who shall be a Certified Public Accountant or Public Accountant as defined under the Laws of Florida governing the practice of Public Accountancy in Florida, or such other person qualified by education or experience in governmental accounting, internal auditing practices and fiscal controls. The Commission Auditor shall serve at the pleasure of the County Commission. The auditor shall be responsible for the maintenance of internal financial controls and for the performance of such other duties assigned by the County Commission. To the degree necessary to fulfill the responsibilities of the office, the auditor shall have the power and authority to: 1. Conduct financial and compliance, economy and efficiency, and performance audits of Charter government and officials with written reports submitted to both the County Commission and the County Manager. 2. Have free and unrestricted access to Charter government employees, officials, records, and reports; and where appropriate, require all branches, departments, and officials of Charter government to provide oral and written reports and to produce documents, files, and other records. (Ord. No. 91-12, 1, 10-21-91) 15
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EXHIBIT II Tourist Development Tax Sec. 13-61. - Levy; collection. (a) There is hereby levied and imposed a tourist development tax in the county at the rate of six (6) percent of each whole and major fraction of each dollar of the total rental charged every person who rents, leases or lets for consideration any living quarters or accommodations in any hotel, apartment hotel, motel, resort motel, apartment, apartment motel, rooming-house, mobile home park, recreational vehicle park, or condominium for a term of six (6) months or less, unless such person rents, leases, or lets for consideration living quarters or accommodations which are exempt according to the provisions of F.S. ch. 212. When receipt of consideration is by way of property other than money the tax shall be levied and imposed on the fair market value of such non-monetary consideration. The six (6) percent tourist development tax is comprised of the following components authorized by the provisions of Florida Statutes (2003) identified below: (1) The two (2) percent levy authorized by 125.0104(3)(c); (2) The one (1) percent levy authorized by 125.0104(3)(d); (3) The one (1) percent levy authorized by 125.0104(3)(m); (4) The one (1) percent levy authorized by 125.0104(3)(l); and (5) The one (1) percent levy authorized by 125.0104(3)(n). (b) (c) (d) (e) The tourist development tax shall be in addition to any other tax imposed pursuant to F.S. ch. 212, and in addition to all other taxes, fees, and the considerations for the rental or lease. The tourist development tax shall be charged by the person receiving the consideration for the lease or rental, and it shall be collected from the lessee, tenant, or customer at the time of payment of the consideration for such lease or rental. The taxes imposed by this section shall become county funds at the moment of collection. The tax shall not apply to any person who has entered into a bona fide written lease for longer than six (6) months in duration for continuous residence at any one (1) hotel, motel, apartment house, multiple unit structure (e.g., duplex, triplex, quadraplex, condominium), rooming house, tourist, or mobile home court, single-family dwelling, garage apartment, beach house or cottage, cooperatively owned apartment, condominium unit parcel, or mobile home. In determining whether a lease agreement is bona fide, the county will examine pertinent factors, including, but not limited to, the following: whether the amount of rent provided for the lease is comparable to prevailing market rental rates, and whether the tenant occupied the premises for the entire term of the lease. 17
(f) The listed definitions are for purposes of this article. Other definitions not defined herein will be given the meaning as found in the applicable Florida Statutes and Florida Administrative Code. (1) Dealer means a merchant or individual who is charged with collecting the tax on behalf of the county. (2) Property management company means an individual or entity who manages short-term rental property on behalf of the property owner. (3) Tax actions means an audit assessment, delinquency assessment or shortage assessment, which is issued for tax, penalties, or interest due. (4) Tourist development tax appeal committee means a committee to hear level 2 tourist development tax appeals. The committee is composed of the county manager, county attorney and commission auditor, or their designees. (Ord. No. 77-7, 1; Ord. No. 86-9, 1; Ord. No. 90-29, 1, 8-27-90; Ord. No. 92-5, 1; Ord. No. 96-2, 1, 1-22-96; Ord. No. 97-12, 1, 6-30-97; Ord. No. 01-42, 1, 1-14-02; Ord. No. 03-43, 2, 12-15-03) State law reference Authority to levy tourist development tax, F.S. 125.0104(3). Sec. 13-68. - Local collection, administration and enforcement of the tourist tax. (a) (b) (c) The county shall collect, administer, and enforce the tax on a local basis. The county tax collector shall collect the tax and the commission auditor shall audit and enforce the tax. The county shall pay the tax collector and commission auditor's offices' for the actual cost of administering the tax from the tax revenues, provided that the total payment shall not exceed three (3) percent of collections. The remainder of the tax collected shall be submitted to the county for deposit in the tourist development trust funds on a monthly basis. The county tax collector and commission auditor may promulgate procedures and may prescribe and publish forms as may be necessary for the local collection and administration of the tax. The county shall be bound by all rules promulgated by the department of revenue pursuant to F.S. 125.0104(3)(k), as well as those rules pertaining to the sales and use tax on transient rentals imposed by F.S. 212.03. The county tax collector shall be responsible for the collection and administration of the tax. The dealer or property management company receiving consideration for such rental or lease shall receive, account for and remit the tax to the county tax collector in accordance with F.S.(2001) 212.11(e), as it may be renumbered from time to time. The tax collector shall keep appropriate records of such funds. The same duties and privileges imposed by F.S. ch. 212 upon dealers in tangible property, respecting the collection and remission of tax, the making of returns, the keeping of books, records and accounts, the payment of a dealer's credit in compliance of the rules of the county tax collector in the administration of such chapter shall apply to and be binding upon all persons who are subject to the provisions of this article; provided, however, the county tax collector may authorize a quarterly return and payment when the tax remitted by the person receiving 18
the consideration for such rental or lease of the preceding quarter did not exceed one hundred dollars ($100.00). (d) The commission auditor shall enforce and audit the collection and remission of this tax by all dealers and property management companies. The commission auditor, or designee(s), may use any lawful means to carry out the duties prescribed in accordance with this section and F.S. chs. 212 and 213, including, but not limited to: (1) Performance of audits as authorized by F.S. 212.13; (2) Garnishments as authorized by F.S. 213.68; (3) Record inspections as authorized by F.S. 212.13; (4) Issuance of tax warrants as authorized by F.S. 213.69. (e) (f) The commission auditor shall have the right to proceed in circuit court to seek a mandatory injunction or other appropriate remedy to enforce its right against the offender, as granted by this section, to require the examination of the books and records of such dealer. Dealer responsibility. All dealers conducting business in the county shall comply with all applicable Florida Statutes and county ordinances in addition to the following duties: (1) Maintain records for as long as a tax action can be pursued under F.S. 125.0104. (2) Make all records available for inspection during normal business hours at the dealer's place of business in the county. The dealer shall pay any expense incurred to inspect or audit records outside of the county. (3) Provide adequate work space during the performance of an audit. (4) The county may require a security bond from new tourist development tax dealers whose principals or officers were previously with a tourist development tax dealer that has outstanding tourist development tax liabilities. In addition, the county may require a security bond from dealers who have not filed a return in one hundred twenty (120) days. a. If a security bond is required: 1. The bond will name the county tax collector as the payee in default. 2. The bond shall be filed with the county tax collector's office. 3. The bond's value shall be three (3) times the average monthly tourist development tax remittance, plus ten (10) percent; or if sufficient data is not available, an estimate will be calculated by the county auditor based on this formula. b. If, upon demand by the county, the dealer's delinquent filing periods or outstanding tourist development tax liabilities are not received, the bond shall be utilized to satisfy the dealer's tourist development tax liability. 19
c. There shall be no further bonding requirements when: 1. The principal or officer's previous company has satisfied all outstanding tourist development tax liability; or 2. A dealer with a bond on file with the tax collector has paid all outstanding tourist development tax liabilities and has kept their account current for twelve (12) consecutive months. (5) Property management companies shall complete a supplemental schedule to be filed with the tourist development tax return. Failure to provide a supplemental schedule may result in the tax return not being accepted as complete. The supplemental schedule shall provide the following data: a. All properties managed with: 1. Physical street address; 2. Owner's last name; 3. Tourist tax account number. b. Number of nights rented by: 1. Owner bookings. 2. Property manager bookings. c. Gross rental income by: 1. Owner bookings. 2. Property manager bookings. (6) Dealers shall provide written notice to the tax collector within ten (10) days of any change to properties managed including: a. Management. b. Owner's legal mailing address. (g) Appeals. The county provides each dealer with a means of resolving disputes arising out of tax actions. However, all non-disputed amount of tax, penalties, and interest shall be paid prior to the acceptance of the appeal for consideration. 20
(1) Level 1 appeals. A written appeal must be filed with the commission auditor's office within twenty (20) business days from the date of the audit assessment. The appeal must include: a. Dealer's personal information: 1. Legal name. 2. Doing business as (dba) name, if applicable. 3. Address. 4. Tourist tax account number. 5. Federal taxpayer identification number: A. Social security number. B. Federal employee identification number. C. Foreign taxpayer identification number. b. A statement of the factual or legal grounds in support of the dealer's position that the county's funds are not in jeopardy and/or the assessment or audit statement is incorrect. c. A statement of whether an oral presentation is requested. d. A copy of the assessment or audit statement. e. The time period covered under the assessment and the amount of tax protested. (2) Level 2 appeals. In the event the dealer does not receive a satisfactory resolution in the Level 1 appeal, within twenty (20) business days of issuance of the decision, the dealer may file a second appeal with the tourist development tax appeal committee. The appeal must include all of the data requested in section (g)(1) above, with any additional documentation to support their position. (3) In the event the dealer does not receive a satisfactory resolution in the Level 2 appeal, they may exercise their rights pursuant to F.S. ch. 72. (h) (i) Compromises. The tourist development tax appeal committee is authorized to compromise penalties and interest; and to waive all tax utilizing the applicable criteria established in 12-13, Florida Administrative Code as guidance. The finance manager is authorized to compromise penalties and interest, and to waive tax up to thirty-five thousand dollars ($35,000.00) utilizing the applicable criteria established in 12-13, Florida Administrative Code as guidance. In addition, revenue auditors and tax compliance officers, utilizing the applicable criteria established in 12-13, Florida Administrative Code as guidance, may compromise up to one thousand five hundred dollars ($1,500.00) in penalties and interest. All tourist development tax assessments become final on the 21 st business day after the assessment or final decision of an appeal. (j) Tax revenues may be used only in accordance with the provisions of F.S. 125.0104. (Ord. No. 92-5, 3; Ord. No. 92-11, 2, 5-18-92; Ord. No. 96-2, 2, 1-22-96; Ord. No. 01-42, 5, 1-14-02) 21
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EXHIBIT III Public Service Tax Sec. 13-231. - Title. This article shall be known as the "Osceola County Public Service Tax Ordinance." (Ord. No. 06-15, 1, 5-1-06) Sec. 13-235. - Collection and remittance. (a) (b) (c) (d) It shall be the duty of every seller of electricity, metered natural gas, liquefied petroleum gas (either metered or bottled), manufactured gas (either metered or bottled) or fuel oil within the unincorporated area of Osceola County to collect from the purchaser, for the use of the county, the tax levied hereby at the time of collecting the payment for such item or service. On or before the twentieth day of each calendar month, each seller shall file a return with payment to Osceola County of all such taxes collected during the preceding calendar month. The form of the return shall be determined by the commission auditor, but must include the name and address of the seller, the period of the return, the amount collected from the sale of taxable services, the amount of tax remitted with the return, and the name and telephone number of a person authorized by the seller to respond to inquiries from the office of commission auditor concerning the seller's administration of the tax. In the event the total amount of tax anticipated to be collected within a calendar quarter does not exceed one hundred twenty dollars ($120.00), the seller of such service may, after receiving written authorization from the office of commission auditor, remit the taxes collected during such calendar quarter to the county quarterly. The tax shall be due on or before the 20th day of the month following the end of the calendar quarter in which the taxes were collected. It shall be unlawful for any seller to collect payment for any taxable item or service without, at the same time, collecting the tax levied hereby in respect of such sales, unless such seller shall elect to assume and pay such tax without collecting the same from the purchaser. Any seller failing to collect such tax at the time of collecting the price of any sale, where the seller has not elected to assume and pay such tax, shall be liable to the county for the amount of such tax in like manner as if the same had actually been paid to the seller. Governmental bodies which sell or resell taxable service to non-exempt end users must collect and remit the tax levied under this article. 23
(e) The commission auditor shall be responsible for the administration and enforcement of this article and is authorized and directed to promulgate and publish such rules and procedures from time to time as may be deemed necessary or useful in the collection, remittance, administration, and enforcement of the tax levied under this article. Such rules and procedures shall be binding upon and enforceable against all sellers and other persons subject to the provisions of this article, but only if and to the extent that such rules and procedures are not inconsistent with general law or this article. (Ord. No. 06-15, 1, 5-1-06) Sec. 13-236. - Appeals and compromises. (a) A seller may file a written protest of any determination with the office of the commission auditor within sixty (60) business days from the date the determination is issued. The appeal must include: (1) The following information relating to the seller: a. Legal name; b. Fictitious name (dba), if applicable; c. Address; d. Tax account number; and e. Federal taxpayer identification number (social security number, federal employer identification number, or foreign taxpayer identification number). (2) A statement of the factual or legal grounds in support of the seller's position that the county's funds are not in jeopardy and/or the assessment or audit statement is incorrect. (3) A statement of whether an oral presentation is requested. (4) A copy of the determination to be reviewed. (5) The time period covered under the determination and the amount of tax protested. The office of the commission auditor shall issue a written notice of decision within sixty (60) days. (b) (c) (d) If dissatisfied with the written notice of decision, the seller may petition for reconsideration within thirty (30) days after the issuance of the notice. The petition for reconsideration shall be heard by a public service tax appeal committee composed of the county manager, county attorney and commission auditor. Within thirty (30) days, the public service tax appeal committee shall issue a written notice of reconsideration to the seller. If dissatisfied with the written notice for reconsideration, the seller may file an action in circuit court within sixty (60) days, pursuant to F.S. 166.234. If there is doubt as to liability for any tax or doubt as to collectibility of any such tax, the 24
public service tax appeal committee composed of the county manager, county attorney and commission auditor is authorized to compromise penalties and interest; and to waive all tax. Under the same circumstances, the audit manager is authorized to compromise penalties and interest, and to waive tax up to thirty-five thousand dollars ($35,000.00), and auditors and tax compliance officers may compromise up to one thousand five hundred dollars ($1,500.00) in penalties and interest. (Ord. No. 06-15, 1, 5-1-06) Sec. 13-239. - Penalty. Any seller of electricity, metered natural gas, liquefied petroleum gas (either metered or bottled) and manufactured gas (either metered or bottled) or fuel oil failing to remit to the county as prescribed in section 13-125 shall be liable for penalties at a rate of five (5) percent of the delinquent tax per month not to exceed a total penalty of twenty-five (25) percent. In no event will the penalty for failure to file a return be less than fifteen dollars ($15.00). Sellers filing fraudulent returns or willfully attempting to evade payment of the tax shall be liable for a specific penalty of one hundred (100) percent of the tax. In addition the commission auditor may bring suit to restrain, enjoin, or otherwise prevent the violation of this article, and to collect such unpaid taxes, and shall be entitled to reasonable attorney's fees and costs if it prevails in such suit. (Ord. No. 06-15, 1, 5-1-06) 25