Objective

To determine the extent of implementation of the five recommendations included in our initial audit report, Controls Over Vehicle Use and Transportation-Related Expenses (Report 2019-S-37).

About the Program

The Department is composed of a central office and 11 regional offices across the State, of which 10 operate repair shops responsible for the maintenance of Department vehicles. The Department also uses a centralized procurement contract (Contract), negotiated and entered into on behalf of the State by the Office of General Services, for fleet management and repair services, administered by the Contractor. The Contractor provides a network of authorized private repair shops across the State for routine maintenance, repairs, roadside assistance, and towing. The Contractor is required to negotiate costs with the private repair shops in its network and ensure costs are competitive and reasonable.

As of December 2022, the Department’s fleet was comprised of 4,086 registered State-owned and 668 leased vehicles. During the period from April 2021 through December 2022, the Department’s vehicle repair and maintenance expenses totaled approximately $73 million, including about $9.5 million to the Contractor and more than $10.2 million in commercial fuel purchases using the statewide refueling credit card (i.e., WEX card).

The objective of our initial audit report, issued October 7, 2021, was to determine whether the Department had established adequate controls to effectively monitor and ensure accountability over its vehicle use and maintenance expenses. The audit found the Department performed limited to no central monitoring of procurements made through the Contractor to ensure costs were reasonable, despite concerns raised by both central office officials and regional fleet managers about purchases under the Contract. The Department also did little to hold the Contractor accountable for its responsibility to ensure costs complied with Contract terms. Instead, the regional offices generally relied on the Contractor to monitor service costs and did not seek improved pricing for procurements – deferring to the pricing offered and likely not receiving best pricing for services. The audit also identified deficiencies in the Department’s controls over recalls and warranties and its oversight of fuel and mileage, which increase the likelihood that State funds are not being used efficiently and effectively and, in the case of open recalls, may pose safety risks.

Key Finding

The Department has made progress in addressing the issues we identified in the initial audit. Of the initial report’s five audit recommendations, four were implemented and one was not implemented.

Key Recommendation

Officials are given 30 days after the issuance of this report to provide information on any actions planned to address the unresolved issues discussed in this follow-up.