audit business license tax program audit report fiscal ye…

Office of the City Auditor INFORMATION CALENDAR February 26, 2008 To: Honorable Mayor and Members of the City Council From: Ann-Marie Hogan, City Auditor Submitted by: Subject: Business License Tax Program Audit Report Fiscal Year 2007 SUMMARY The attached Business License Tax Program Audit Report identifies the Business License Tax revenue identification efforts, challenges, and accomplishments of the Auditor’s Office during fiscal year 2007 (FY07). The Business License Tax audits initiated during FY07 consisted of Berkeley residential rental properties and one professional service business. The work performed during FY07 involved auditing new cases and cases that had been initiated before FY07. Rent Board information, disclosed as authorized by Ballot Measure P, was used to determine the residential rental properties selected for audit. Properties selected appeared unlicensed or owners appeared to have underreported tax due to the City. In addition to the audit work performed, auditors invested staff time to improve automated systems tracking the Business License Tax Program audit activity. CURRENT SITUATION AND ITS EFFECTS During FY07 the Business License Tax Program Audit had 57 open cases, which included 34 cases carried forward from prior years. Audit work completed during FY07 resulted in 24 businesses being billed a total of $128,460 for unpaid taxes, penalties, and interest. There were 17 dropped/closed cases, and 5 cases ...