Purpose

To determine what steps the Office of General Services (OGS) has taken to manage the State’s passenger vehicle fleet, and to determine whether agencies have controls in place that ensure vehicles are used in the most economical and efficient manner and that risks associated with vehicle usage have been addressed. The audit covers the period April 1, 2012 to March 3, 2015.

Background

Public employees in many agencies are routinely required to travel for various work reasons such as conducting inspections, making site visits, or attending meetings and recruitment events. Typically, if public transportation is not available or feasible, staff drive to their destination, either in a fleet vehicle provided by the agency, their personal car, or a rental vehicle. Historically, the State has taken a decentralized approach to managing its fleet of passenger cars and trucks. More recently, the State’s Spending and Government Efficiency (SAGE) Commission (which was created in 2011 pursuant to Executive Order No. 4 to review and assess New York State government with the goal of saving taxpayer money, increasing accountability, and improving the delivery of government services) recommended a cost savings initiative to consolidate many activities and functions, including fleet management.

As of June 2014, the State’s fleet inventory included 23,853 vehicles, most of which were special purpose vehicles (e.g., snow plows, large trucks) that are generally unsuited for personal transportation. The remaining 6,700 were cars and light-duty trucks used by staff to conduct business. State records show that, for the two years ended March 31, 2014, more than 25,000 State employees incurred at least $31.8 million in vehicle rental and mileage reimbursement costs. About 85 percent of these costs were incurred to reimburse staff for the use of their personal vehicles.

In recent years, our office performed 33 audits of travel expenses at State agencies and found issues with charges for non-travel items, vehicle rentals that were not adequately monitored, and the potential misuse of rental and fleet vehicles.

Key Findings

• In the almost three years since the SAGE Commission’s recommendations, OGS has not made any formal recommendations regarding the State’s vehicle fleet, as directed in the Commission report. As a result, there has been relatively little progress in achieving the overall goal of consolidating and centralizing management of the fleet, which largely remains the responsibility of managers at the individual agencies. For additional progress to occur, OGS needs to perform a comprehensive analysis of agency needs and take steps to ensure the fleet available to each agency is the proper size and makeup to most efficiently meet agency missions.
• OGS officials indicate that consultants hired in 2013 (at a cost of about $532,000) had already conducted just such an analysis. However, despite our multiple requests spanning more than a year, OGS did not provide us with the consultant’s report nor disclose its results to the public. The failure to comply with our request impaired our ability to fulfill our audit objective.
• At the individual agency level, our surveys and field visits showed most agencies have taken steps to more effectively manage employee travel in an effort to ensure passenger vehicle use is as efficient and cost effective as possible in light of budgetary constraints. While some agencies still need to improve their compliance with vehicle use policies and controls, others have established exemplary practices that should be shared.
• Monitoring practices among State agencies are not always consistent to ensure available passenger vehicle resource use is appropriate for specific employee travel circumstances. The significant use of rental and personal vehicles comes with inherent risks and, while the central review of travel vouchers helps to limit these risks, some still exist and agencies need to do more to mitigate those risks.

Key Recommendations

• Formally assess the adequacy of the internal control environment at OGS, particularly as it relates to cooperation with statutorily authorized State oversight inquiries.
• Complete an overall review of agency fleet needs and make formal recommendations regarding the State’s fleet management.
• Require employees to complete a vehicle use log (to record dates and times of use, purpose of trip, starting location and destination, and start and end odometer readings) when they use a rental vehicle.
• Direct State agencies to establish controls to ensure the OGS Trip Calculator is completed by travelers for all trips anticipated to exceed 100 miles.
• Work with State agencies to facilitate their sharing of successful and innovative practices to more efficiently and effectively manage employee vehicle travel, including establishing carpool policies, tracking rental car mileage, and performing routine vehicle purchase and lease analyses.

Agency Response

In response to our draft report, OGS officials disagreed with our conclusion that they made relatively little progress in consolidating the State’s fleet. As evidence of progress, they referenced a series of various forms, policies, and other initiatives undertaken. Many of these items were recognized by our audit, while others either occurred near to or after the end of our audit fieldwork (and possibly as a result of the audit itself). Further, some of OGS’ initiatives had minimal relevancy to the SAGE Commission’s goal of consolidation and centralization of the State’s vehicle fleet.

In addition, officials based their refusal to provide auditors with critical information (including the paid consultant’s draft report) on their opinion that “sharing the draft report prior to the development of certain policies would have been premature and counterproductive.” However, State agency officials cannot disregard the State Comptroller’s constitutional and statutory audit authority, nor deny the Comptroller’s auditors access to pertinent data and records for the reasons they cited. The unjustified denial of such records is antithetical to open, transparent, and accountable government.

We were generally disappointed that OGS’ response did not directly address several of our key recommendations, particularly the need for a comprehensive review of agency vehicle needs.

Other Related Audits/Reports of Interest

Department of Transportation: Selected Employee Travel Expenses (2012-S-93)
Department of Health: Selected Employee Travel Expenses (2012-S-94)