Objective

To determine if the Department of Motor Vehicles (Department) is appropriately allocating, billing, and collecting the expenses of administering the Motor Vehicle Financial Security Act and the Motor Vehicle Safety Responsibility Act (collectively, “Acts”). The audit covered the period April 1, 2014 through August 20, 2019.

About the Program

The Department administers the Acts pursuant to Articles VI and VII of the Vehicle and Traffic Law. These Acts help ensure that the operators of motor vehicles registered in New York possess adequate insurance coverage, or are financially secure, to compensate persons they might injure or whose property they might damage as a result of an accident. Department activities relating to the Acts fall into three program areas: the Dedicated Bridge and Highway Safety Program, the Compulsory Insurance Services Program, and the Accident Prevention Course Program. Under the Acts, the Department is required to annually estimate the expenses of administering the related programs and assess these expenses on insurance carriers in proportion to their reported premiums. Certain fees paid by self-insurers and for bonded vehicles reduce the assessable expenses.

Key Findings

• ƒƒIn general, the Department is appropriately allocating, billing, and collecting nearly all the expenses related to administering the Acts. However, we identified areas for improvement. For example, the Department could better ensure the accuracy of its allocation and billing practices by analyzing reported premium data and, where indicated, taking appropriate follow-up actions.
• The Department did not bill $126,493 in assessable expenses due to its practice of not adjusting its billing to account for amended premiums reported by insurers. It also lacks a method for carrying prior period balances forward to subsequent periods and, as of August 2019, had not collected $25,265 that it had billed to insurers.

Key Recommendations

• ƒƒEnhance the accuracy and reliability of reported premium data by analyzing premium data and taking follow-up action where appropriate.
• ƒƒTake steps to bill insurance carriers for, and collect, all assessable expenses under the Acts.