Audit Report of the Business Integrity Commission’s Billing and Collection of Licensing and Registration

Executive Summary

The Business Integrity Commission (BIC) is the law enforcement and regulatory agency that oversees the private sanitation (trade waste) industry and public wholesale markets in New York City.  BIC’s mission is to eliminate organized crime and other forms of corruption and criminality from these industries so that businesses can operate in a fair, competitive, and open environment.

BIC is responsible for investigating applicants who seek to conduct business in the trade waste industry and public wholesale markets and issuing them licenses or registrations to operate, which must be renewed every two to three years.  Application fees range from $1,000 to $7,500, and may be paid by check, money order, or credit card.  BIC uses the NIMBUS system (NIMBUS) to track license and registration applications and account for associated fees.

The objectives of this audit were to determine whether BIC: (1) charged applicants license and registration fees in accordance with the New York City Administrative Code and the Rules of the City of New York; (2) collected appropriate license and registration fees; and (3) properly safeguarded license and registration fees.

Audit Findings and Conclusions 

BIC generally charged and collected appropriate application fees for trade waste and public wholesale market licenses and registrations.  However, BIC did not adequately safeguard application fees that it received because it did not: deposit cash receipts in a timely manner, properly secure cash receipts while they were awaiting deposit, and separate the duties for receiving cash receipts and accounting for them in NIMBUS.  Consequently, application fees were susceptible to misappropriation or loss.

Audit Recommendations 

To address these issues, we make nine recommendations including that BIC should:

• Electronically scan and deposit all funds received in the bank on at least a daily basis.
• Place restrictive endorsements on incoming checks and money orders as soon as they are received.
• Secure checks and money orders awaiting deposit in a locked safe which has a combination that is changed periodically and known to few individuals.
• Separate the responsibilities for collecting license and registration application fees and accounting for them in NIMBUS.

Agency Response

In its response, BIC generally agreed with the report’s findings and stated that it “recognizes the importance of internal controls and considers our response to the audit recommendations to reflect that principle by noting achievable improvements to be implemented, while keeping within the means of the agency and maintaining effectiveness and efficiency.”  Further, BIC stated that “[s]taffing constraints of the Licensing and Budget & Finance Units, as well as the limited size of the agency as a whole, is a key factor in our determination of achievable improvements in response to the audit recommendations.”

The full text of BIC’s response is included as an addendum to the report.