Hundreds of local businesses and strata-governed condominium complexes did not pay government fees for trash collection in 2014, and may not have paid those fees dating back to 2010, an internal audit report released to the Cayman Compass has revealed.
“During the January-June 2014 billing period, 289 customers categorized as ‘business’ customer[s] were not billed,” the Internal Audit report, made public through a Freedom of Information request, stated.
The issue was noted during a follow-up audit done by the unit last year, after revelations in 2010 that duplicate bills for trash fees were sent out and unauthorized waivers for those fees to churches and schools were given.
The government made changes in 2010 to the system used to track garbage fees – known as EVMAS – to waive those fees on selected trash service routes. Department of Environmental Health managers said the changes made at the time were related to the government’s decision to stop billing residential homes for trash pick-up.
The waiver only applied to standalone properties, or was intended to do so at the time, internal auditors noted.
“However, upon our review, there were several service codes [in the EVMAS system] not related to residential units that were also assigned with zero fees,” the 2014 audit stated. “This includes hotels, offices, small businesses and rental containers.”
Department management who spoke to internal auditors said they had been aware of the problem and were working to resolve it from April 2013. Work on the changes were delayed due to technical issues and other recommended changes to the EVMAS system.
The department said a review of the fees that were not billed was undertaken in December 2014.
“With regards to retroactive fees, a policy decision from the government would need to be determined,” the management response to the audit states.
Trash fee collection
A private consultant review of the Cayman Islands government, completed last year, recommended the outsourcing of both waste collection and landfill services to the private sector. However, in order to do that, it was proposed that waste disposal fees should be reinstated for all system users.
“Current waste collection fee arrangements in the Cayman Islands are ineffective with most residents and many commercial entities not paying for services,” the consultant’s report done by accounting firm Ernst & Young states.
To realize the estimated $2 million cost savings it identified, the EY report makes it clear that the initiative would require the enforced collection of waste disposal fees.
“In order to successfully outsource waste collection, it is a necessary preceding step to implement a collection fee structure and system.” In addition to fees for waste collection, the report states, charges should be introduced for those bringing waste to the landfill site “for both private garbage collection companies and private citizens.”
The EY report also noted several risks to implementation of collection of waste disposal fees, stating that there would be a cost to collection, plus the need for enforcement and regulatory change. In addition, it stated that those not willing to pay may illegally dump their waste.