Purpose

To determine whether the Department of Financial Services (Department) has collected, accounted for and distributed all Fee revenue due to the State and whether the Division of Criminal Justice Services (Division) and the Division of State Police (State Police) have ensured that such revenue was spent appropriately. The audit covers from April 1, 2008 through March 31, 2012.

Background

New York State collects the Motor Vehicle Law Enforcement Fee (Fee) on each automobile insured in the State. The Fee is collected by the insurance companies and remitted to the Department. Between April 2008 and March 2012, insurance carriers remitted $384.8 million to the Department. About $18.8 million was deposited into a fund for the Division and the remaining $366 million was deposited into a fund for the State Police. The Division funds grants to assist law enforcement agencies such as police departments and district attorney's offices to combat motor vehicle theft and insurance fraud. The State Police uses Fee revenue to fund its Auto Theft Unit (ATU) and to detect and reduce motor vehicle theft and insurance fraud.

Key Findings

The Department properly collected, accounted for and distributed Fee revenue. However, the Department could better ensure that all Fees are remitted by the insurance companies.

• Division employees visit grantees to monitor how they are using funds, but do not review documentation supporting payment requests and reported performance measures. The Division has completed only seven audits of seven grantees and as of March 2012, the last one was done in October 2008.
• Despite the growth in Fee monies collected, the ATU is not fully staffed and since 2008 the unit has not purchased any new equipment. According to the State Police Annual Motor Vehicle Enforcement Reports, ATU has done fewer investigations resulting in fewer arrests and the recovery of fewer stolen vehicles over the period January 1, 2008 to December 31, 2011.

Key Recommendations

• The Division should train and require Office staff to verify source documents when they visit grantees to confirm expenses and verify performance measures.
• The State Police should ensure that Fee revenue in the allocation plan is used for the stated purpose and changes to the plan and the reason why are documented.

Other Related Audit/Report of Interest

Division of Criminal Justice Services/Division of State Police/State Insurance Department: Administration of the Motor Vehicle Law Enforcement Fee (2003-S-19)