Audit Report on the Monitoring of the Private Carting and Public Wholesale Market Industries by the Business Integrity Commission

AUDIT REPORT IN BRIEF

The Business Integrity Commission (BIC) consolidates under one agency regulatory jurisdiction over the private carting, the public wholesale market, and the shipboard gambling industries. BIC is both a law enforcement and regulatory agency. Its mission is to eliminate organized crime and other forms of corruption and criminality from the industries it regulates. BIC is empowered to investigate applicants, issue licenses and registrations, enforce applicable laws, and promulgate rules and regulations that govern the conduct of the businesses it oversees.

Before a license or registration is granted, BIC conducts background and criminal checks of the applicant business, its principals¹, and managerial employees for the purpose of determining the good character, honesty, and integrity of the applicant business. By conducting these investigations, BIC prevents individuals and businesses with organized crime connections from being involved in the regulated industries. BIC monitors licensed or registered trade waste businesses by investigating customer complaints. BIC’s Trade Waste Enforcement Unit (TWEU) is responsible for handling and resolving trade waste complaints. BIC’s uniformed Market Agents patrol the markets and monitor the businesses in them. BIC also monitors trade waste and market businesses through the renewal application process.

BIC officials informed us that there were no businesses operating in the shipboard gambling industry during our audit period.

BIC officials also informed us that as of August 20, 2007, BIC has been undergoing a restructuring that will address many of the issues identified in our report.

Audit Findings and Conclusions

Our review disclosed significant weaknesses in BIC’s monitoring of the trade waste and market industries. For example, we noted that BIC:

• Failed to institute standard operating procedures (SOPs) for the investigation and resolution of complaints, as required by the New York City Administrative Code §16-522, and did not review BIC Inspectors’ decisions regarding the intake, investigation, and resolution of complaints. In the absence of SOPs and supervisory review, BIC cannot ensure that all complaints that warrant investigation are investigated and that BIC Inspectors conduct investigations appropriately and uniformly.

• Lacks an effective system for tracking the investigation of trade waste complaints because it does not adequately document complaints received; it therefore cannot verify that all complaints received are entered into its database and ultimately resolved.

• Did not regulate all markets or implement a timetable for their regulation, as authorized by the New York City Administrative Code §22-268.

• Does not ensure that its Market Agents are actively patrolling markets and does not ensure that there is adequate coverage of the markets.

• Did not consistently adhere to the New York City Administrative Code and its Policies and Procedures for Processing Trade Waste and Markets Renewal Applications when renewing licenses and registrations.

Audit Recommendations

To address these issues, we make 20 recommendations, including that BIC should:

• Develop and implement standard operating procedures for the investigation and resolution of complaints, as required by New York City Administrative Code §16-522.

• Keep a record of all complaints received and retain original copies of all complaints received by mail, e-mail, and fax.

• Record essential complaint data in its database, including but not limited to—complaint source, action taken to date, status, number of days open, date resolved, and how complaint was resolved.

• Develop a timetable for the sequenced implementation of regulation of the Brooklyn Terminal Market and the Gansevoort Meat Market if it cannot commence regulation of these markets at this time.

• Require Market Agents to make regular entries in their memo books during each shift documenting their actions, as well as the activities and conditions in markets.

• Require Market Supervisors to review memo books, ensure Market Agents make regular entries, and initial memo books during each shift.

• Ensure that background, legal, and criminal checks are conducted on all businesses applying for renewals and all their principals and managerial employees.