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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Department of Taxation and Finance
Controls Over Unclaimed Bottle Deposits (Follow-Up)


Issued: October 15, 2019
Link to full audit report 2019-F-6

Purpose
To determine the extent of implementation of the five recommendations included in our initial audit report, Controls Over Unclaimed Bottle Deposits (Report 2016-S-96).

Background
The Department of Taxation and Finance (Department) is responsible for enforcing certain aspects of the New York State Returnable Container Act (Act), also known as the “Bottle Bill.” The Act requires every deposit initiator to collect a 5 cent deposit from consumers on containers of less than one gallon of many beverages sold in the State. Consumers may then return their empty beverage containers to a dealer or redemption center to get their deposit back. The Act requires all deposit initiators to register with the Department and remit 80 percent of any unclaimed bottle deposits to the Department on a quarterly basis. The Department has the authority to penalize deposit initiators that fail to register or fail to file quarterly reports. The Department collected $117.7 million and $112.9 million in unclaimed bottle deposits in the State fiscal years ended March 31, 2018 and 2017, respectively.

Our initial report, issued December 19, 2017, determined that the Department deposited all funds received into the General Fund, as required. However, it did not assess penalties on 39 deposit initiators that failed to file required quarterly reports, nor did it assess penalties on those who filed late, and took little action to improve compliance. Further, the Department did not have procedures in place to verify data in the quarterly reports, and our analysis identified multiple red flags in the data that were potential indicators of material errors and/or fraudulent reporting.

Key Finding
The Department has made significant progress in addressing the issues identified in our initial audit report. Of the five prior recommendations, four were implemented and one was partially implemented.

The Department is not required to respond to this follow-up report. However, we allow 30 days from the date this report is issued for officials to provide information on any actions that are planned to address unresolved issues identified in this report.


State Government Accountability Contact Information:
Audit Director: Stephen Goss
Phone: (518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236