Purpose

To determine whether the Department of Environmental Conservation (Department) properly collects all fees and surcharges due to the Environmental Protection Fund (Fund) in compliance with the New York State Electronic Equipment Recycling and Reuse Act (Act). This audit covers the period January 1, 2013 through July 7, 2015.

Background

The Department’s Division of Materials Management (Division) is responsible for administering the Act, which was signed into law on May 28, 2010. The Act is intended to divert electronic waste (e-waste) from landfills and waste combustion facilities and keep toxins such as lead, mercury, and other hazardous materials from potentially contaminating the environment. Covered electronic equipment includes computers, computer peripherals, televisions, small-scale servers, and small electronic equipment.

The Act requires manufacturers of covered electronic equipment to set up and fund programs for the collection and recycling of e-waste in the State. The Act also requires manufacturers that sell more than 1,000 units of covered electronic equipment to register with the Department, pay a one-time registration fee of $5,000, and then annually submit a report of their statewide sales and recycling data and pay an annual $3,000 fee. Sales data is used to calculate a recycling acceptance standard for each manufacturer. If actual recycling falls below this standard, surcharges apply.

Manufacturers may choose to participate in a collective e-waste acceptance program with other manufacturers. Each collective must pay a $10,000 registration fee. The Department is required to deposit all fees and surcharges into the Fund. The Department collected a total of $371,000 in registration fees from 116 manufacturers, eight collectives, and 84 recyclers, as well as $750,000 in annual reporting fees from manufacturers and collectives for the three reporting years ended December 31, 2013 (the fees for each reporting year are due the following year). During the year ended December 31, 2014, the Department also collected $176,000 in surcharges for the 2013 reporting year.

Key Findings

We found the Department properly collected, recorded, and deposited fees and surcharges due the Fund. However, the Division did not segregate the responsibilities for collecting and recording cash receipts of the fees and surcharges. Also, supervisory review of revenue and deposit activities was not documented.

Key Recommendations

Improve controls over the collection and reporting of fees by: separating the handling and recording of cash receipts to the degree feasible; and documenting the results of supervisory reviews of the cash collection process.

Other Related Audit/Report of Interest

Department of Environmental Conservation: Selected Aspects of Inactive Hazardous Waste Site Remediation Cost Recovery (2014-S-14)