Business License Tax Program Audit Report For Fiscal Year 2005

Office of the City Auditor INFORMATION CALENDAR April 25, 2006 To: Honorable Mayor and Members of the City Council From: Ann-Marie Hogan, City Auditor Submitted by: Ann-Marie Hogan, City Auditor Subject: Business License Tax Program Audit Report For Fiscal Year 2005 SUMMARY The attached Business License Tax Program Audit Report identifies the Business License tax revenue identification efforts and accomplishments of the Auditor’s Office during fiscal year 2005. All audits initiated during fiscal year 2005 were audits of Berkeley residential rental properties. During the November 2004 election, Berkeley voters passed Ballot Measure P permitting the City to use Rent Board information to help enforce other City ordinances, such as the Berkeley Business License Tax ordinance. The Auditor’s Office saw this as a new opportunity to identify rental properties that were unlicensed or were paying significantly less tax than what was due. Audit work associated with audit cases initiated in prior years also continued. CURRENT SITUATION AND ITS EFFECTS Business License Tax Program audits completed during fiscal year 2005 resulted in 13 businesses being billed a total of $156,862. The $156,862 that was billed includes a $47,368 audit assessment that was referred to Finance for collection. Collection of this receivable is anticipated to be difficult because this Berkeley business location had been sold and the former parent company is located in ...