Purpose

The purpose of our performance audit was to determine whether the Department of Motor Vehicles (Department) has adequate procedures in place to accurately report its assessable expenses incurred in connection with the administration of Article VI and Article VII of the Vehicle and Traffic Law. We performed our audit pursuant to legislative mandates included in these statutes, which direct that the Comptroller and the Commissioner of Motor Vehicles ascertain the annual amount of expenses incurred in the administration of these laws. Our audit covered the period April 1, 2011 through March 31, 2013.

Background

The Department administers the Motor Vehicle Financial Security Act (Security Act) and the Motor Vehicle Safety Responsibility Act (Responsibility Act). These Acts help ensure that the operators of motor vehicles driven in New York State possess adequate insurance coverage, or are financially secure, to compensate those persons they might injure or whose property they might damage as a result of an accident. According to Article VI, Section 317 and Article VII, Section 363 of the Vehicle and Traffic Law, the Department is responsible for tracking its cost of administering these Acts, and assessing these costs on insurance carriers that issue policies or contracts of automotive bodily injury insurance.

Key Findings

• For the fiscal years ended March 31, 2012 and March 31, 2013, net assessable expenses for the Acts totaled about $20.3 million and $18.9 million, respectively. The Department is reporting its assessable expenses accurately.
• The Department lacks written policies and procedures for identifying which expenses are assessable.

Key Recommendation

Develop written policies and procedures for identifying assessable expenditures.

Other Related Audits/Reports of Interest

State Education Department: Audit of the Tuition Reimbursement Account for the Three Fiscal Years Ended March 31, 2013 (2014-S-17)
Department of Motor Vehicles: Motor Vehicle Financial Security and Safety Responsibility Acts: Statement of Assessable Expenses for the Three Fiscal Years Ended March 31, 2011 (2012-S-25)