$8M IN LOST REVENUES UNCOVERED AT DEPARTMENT OF FINANCE
Faulty Billing Process Failing to Collect Money Owed the City
NEW YORK, NY - The Department of Finance (DOF) is failing to properly track and collect tax revenue due on taxi cabs and other commercial vehicles, depriving the City of more than $8 million, according to an audit initiated under former Comptroller William C. Thompson, Jr. and just completed by Comptroller John C. Liu. The Commercial Motor Vehicle Tax (CMVT) brings in $47 million annually.
"$8 million is a lot of money to let fall through the cracks because of sloppy practices," Comptroller Liu said. "This error is even more troublesome when the City is proposing big cutbacks in firehouses, school nurses, libraries and other services. On the heels of the Mayor's proposed preliminary budget, the new fiscal year clearly will necessitate expense reductions and possibly revenue increases to reach a required balanced budget. As we have done here with the CMVT, my office will continue to seek additional savings by auditing and improving the efficiency of City agencies, including the DOF."
Comptroller Liu credited Deputy Comptroller for Audit H. Tina Kim and her team in the Bureau of Financial Audit for presenting these findings.
Chief among the findings:
• There is an unpaid outstanding balance of $8 million due to the fact that CMVT billing periods are kept independent of each other and previous outstanding balances are therefore not carried over to the next billing period.
The recommendations made by Comptroller Liu to the DOF include:
• Ensure that the billing process is corrected and previous years' account balances are carried forward.
• Develop a memo of understanding with the Taxi and Limousine Commission (TLC) and New York State Department of Motor Vehicles to ensure that all CMVT revenue is collected before the approval of licenses for medallions and non-medallion automobiles, thereby improving the collection of outstanding CMVT balances.
• Identify and notify account holders of overpayments to allow them the opportunity to request a refund.
• Determine whether the system should write off account balances of less than $5 or carry them over to the next billing period.