Jul. 21--A long-time security and skycap contractor for American Airlines and other carriers failed to report millions of dollars in revenue in 2005 and 2006, underpaying fees due Miami International Airport, a new report by the Miami-Dade Office of the Inspector General found.
ASMO, which disputes the findings, is the second such company uncovered by the Inspector General this year, underscoring recurring lapses in Miami-Dade Aviation Department's oversight of financial reporting by companies that hold permits to operate at the airport, said Chris Mazzella, Miami-Dade Inspector General.
"The deficiencies that we uncovered were very significant and we need to make sure that these problems are addressed by the airport," he said. "This is the second incidence and we are concerned about the loss of significant revenues."
ASMO shortchanged the airport $434,150 in fees, most of which has since been paid, the IG's report said, which cited careless accounting practices and inattentive management.
ASMO senior executives disagree, saying the company is up to date in its payments, and while some mistakes were made, the majority were timing issues related to delays in airport enplanement reports.
"Everything has been paid and everything has been reported," ASMO Chief Financial Officer Rene Velazquez said. "Yes, there were a few hiccups, we're not infallible, but everything was done in good faith."
ASMO has worked for American for about six years, under multiple contracts for services including skycaps, help at security checkpoints and wheelchair assistance, said American spokeswoman Martha Pantin. The company also works for more than two dozen other carriers at MIA, ASMO President Joseph Lorenzo said.
REVELATIONS
The IG's investigation revealed that ASMO either did not report or reported late -- because of the IG's detection -- 13.9 percent of its revenue, or $6.2 million, and did not pay or paid late $434,150 in fees due to the airport.
As a result of the audit, ASMO has paid $204,197 to the airport, and owes $75,769 related to $1.1 million in revenue that remains unreported, in addition to other late fees it still owes, the IG report said. ASMO executives say they are not overdue in paying.
All permit holders must pay the airport 7 percent of their revenue to work there. They self-report their revenue. Companies are required to have audits, and the airport has an in-house group that audits permit holders.
In February, Sereca Security, a Doral company that provides security services to airlines at MIA, was also found to have shortchanged the airport by more than $209,000 in 2005 permit fees by underreporting its revenue, the OIG found.
Mazzella said his office is investigating other cases at MIA, but would not disclose the number, nor the names. About 200 companies hold permits at MIA, said Miami-Dade Aviation Chief Financial Officer Anne Syrcle Lee.
The latest report said MIA's administrative practices are "perhaps, the OIG's biggest concern."
"We are particularly concerned that other permittees are not being properly managed and that MDAD is likely losing significant revenues due to unreported and under-reported revenues," the report said. "We believe that rectifying these types of deficiencies on all of its revenue generating agreements should be a top priority for MDAD."
AUDIT DEFICIENCY
Lee said that with so many permittees, it would be impossible for the airport's staff to audit each one, and the IG's services are part of the airport's compliance process. MIA provides IG employees with office space and computers, she said, and pays for their dedicated services, at a cost of $400,000 a year.
"We count on them to pick up discrepancies in the financial reporting," Lee said. "It's a mutual responsibility."
To see more of The Miami Herald or to subscribe to the newspaper, go to http://www.herald.com. Copyright (c) 2007, The Miami Herald Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
