Audits Find Problems with Use of Government Vehicles | AccountingWEB

Audits Find Problems with Use of Government Vehicles

Recent audits at state, local and national government departments have revealed weak controls over personal use of government–owned vehicles by employees, government failure to report personal use as a taxable benefit, underutilization of government owned vehicles and inadequate control of employees’ access to government-owned fuel.

Denver City Auditor Dennis Gallagher submitted a 23-page review of the city’s vehicle use to Mayor John Hickenlooper at the end of June, concluding that “because the city refuses to create a centralized database and accounting agency for all city vehicles, it is nearly impossible to efficiently and accurately monitor usage of all city vehicles by employees,” The Rocky Mountain New reports. The audit also expressed concern that Denver did not have sufficient control over whether employees reported the vehicle use as taxable income or paid a per diem fee of $3.

Denver City Finance Director Margaret Browne accepted some of the auditor’s recommendations and will merge three databases for tracking vehicle use. She will also institute annual review of authorization to take home vehicles, but she said that a centralized fleet management program would not be cost-effective, because only 20.5 percent of Denver’s 486 vehicles are driven by non-security personnel, the News says.

Police and fire officials are exempt from Internal Revenue Service (IRS) rules because they are required to take vehicles home in order to respond to emergencies 24 hours a day, seven days a week.

The State of Wisconsin announced last week that it had not treated personal use of state-owned vehicles as taxable income in 2002 and 2003 and agreed to pay the Internal Revenue Service (IRS) $26,100 in back taxes, the Madison Journal Sentinel reports. The state accepted responsibility for the back taxes. The IRS did not charge penalties and agreed not to bill the state for unpaid taxes for other years.

As a result of the audit, Wisconsin has banned almost all personal use of state-owned vehicles.

Auditors from the Energy Department found one in five vehicles underused at the Yucca Mountain Project, according to a report published by the Energy Department inspector general in May, the Associated Press reported. Managers at Yucca Mountain have since cut 19 of the 75 vehicles from their fleet of cars, trucks, minibuses and work vans. Auditors found underutilization was about 28 percent in the department, overall.

In Fairfax County, Virginia, government is tightening control over its fuel supply after an audit report issued in June to the Board of Supervisors said the large number of access codes at the county’s 47 fuel sites increased the risk that employees could take diesel fuel and gasoline for personal use, the Washington Post reports. The county uses nearly 800,000 gallons of fuel per month for mass transit, school buses and official vehicles.

The county has eliminated many codes, according to auditor John J. Adair, and will require a monthly report from each agency that uses fuel, the Post says.

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