AUDIT COMMITTEE SUMMARY
April 17, 2018
Audit of Finance Sales Tax Recovery Contract
Report Issued February 8, 2018
Audit Objective
Determine if contract administration of the Sales Tax Recovery contract is effective to ensure compliance with key terms to include the commission structure.
Background
In June 2016, the City entered into an initial three year professional services contract with Sales Tax Assurance, LLC (STA) for sales/use tax collection and recovery services on behalf of the City.
STA's collection and recovery services includes but are not limited to physical canvassing, timely screening and analysis, and other proprietary analytics to identify entities that are subject to local sales/use tax that are not reporting, or inappropriately remitting payments to the Texas Comptroller of Public Accounts.
As compensation for their collection and recovery services rendered, STA is entitled to 25% of any recovered and/or new or increased sales/use tax collections for 2 years net of the 2% administration fee retained by the Texas Comptroller of Public Accounts.
The Finance department is responsible for the monitoring and administration of the contract for compliance. They have established a Contract Administration Plan (CAP) to monitor key contractual terms for compliance.
Audit Scope and Methodology
The audit scope included contract compliance monitoring efforts related to the Sales Tax Recovery Contract for Fiscal Year 2016 & 2017. We reviewed key contract terms for compliance. We also reviewed billings from STA for accuracy, timeliness, and support documentation. In addition we reviewed Finance's monitoring procedures which ensure the City receives accurate sale/use tax collections.
Audit Conclusions
Finance has established a Contract Administration Plan to monitor key terms of the Sales Tax Recovery Contract for compliance. We determined that key contractual terms were in compliance such as reporting and insurance requirements. Finance has imp...
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