REPORT DIGEST

 

DEPARTMENT OF CENTRAL MANAGEMENT SERVICES’ OPERATION OF THE STATE VEHICLE FLEET

 

PERFORMANCE AUDIT

 

Release Date: November 2011

 

State of Illinois, Office of the Auditor General

WILLIAM G. HOLLAND, AUDITOR GENERAL

 

To obtain a copy of the Report contact:

Office of the Auditor General, Iles Park Plaza, 740 E. Ash Street, Springfield, IL 62703

(217)    782-6046 or TTY (888) 261-2887

 

This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov

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SYNOPSIS

 

House Resolution Number 658 directed the Office of the Auditor General (OAG) to audit the Department of Central Management Services’ (CMS) operation of the fleet of passenger cars used by State executive agencies.  The Resolution called for the audit to address the total number of cars; number of take-home cars; necessity of take-home vehicles; cost of vehicles in Fiscal Year 2009; and the adequacy of CMS’ system to record their use and maintenance and to check for official use, including whether it is possible to implement a system to track vehicles for business only.

 

CMS is statutorily responsible for administering the operation of passenger cars under the Governor’s jurisdiction along with any agencies that desire to use CMS vehicle services:  “. . . to acquire, maintain, and administer the operation of the passenger cars reasonably necessary to the operations of the executive department of the State government . . . .” (20 ILCS 405/405 280)   CMS said it is responsible for developing vehicle policies while monitoring vehicle use and maintenance is up to each individual State agency.  

 

The audit identified areas where the administration of the vehicle fleet could be made more efficient and effective:

 

1. Vehicles.  A total of 65 State executive agencies had nearly 16,600 vehicles in Fiscal Year 2010. 

• Almost 75 percent of the vehicles were at agencies under the jurisdiction of CMS (12,000 of 16,600). 

• A total of 5,375 vehicles were assigned to individual employees.

• Approximately 5,150 vehicles were authorized to be taken home. 

• Approximately $129 million was the total spent in Fiscal Year 2009 to acquire, repair, maintain, and operate vehicles.  In Fiscal Year 2010, approximately $121 million was spent on vehicles.

 

2. Breakeven Miles.  CMS calculated that if vehicles were not driven between 7,000 and 12,000 miles per year (depending on type of car) it would be more cost-effective for the State to reimburse the employee for use of a personal vehicle.  Some vehicles were driven less than 7,000 miles per year.

 

3. Logs.  Agencies did not always keep daily or complete vehicle logs, and/or used different types of logs.

 

4. Data.  Agencies’ annual reports to CMS on individually assigned vehicles (IAV) contained errors.

 

5. Coordinators.  Vehicle coordinators, who are responsible for monitoring vehicles at agencies, were not properly checking logs, monitoring commuting miles, or submitting accurate reports to CMS.  

 

6. Commuting.  Some vehicles were used extensively (over 30% of total miles driven) for commuting. 

 

7. Purchasing.  Vehicles are expected to be driven 18,000 miles per year but one-half were driven fewer miles.

 

8. Tax.  Agencies for 9 employees sampled did not provide documentation to show they paid commuting taxes.

 

9. License Plates.  A total of 218 vehicles at 20 agencies had conventional (non-U) license plates.

 

10. Policy.  Most agencies had policies that address the purpose of State vehicles, restrictions on take-home vehicles, procedures for using motor pool vehicles, credit card use, etc. but over 20 agencies did not. 

 

AUDIT CONCLUSIONS AND RECOMMENDATIONS

 

The State of Illinois’ vehicle fleet is not overseen by any one agency with complete responsibility and authority.  The Department of Central Management Services (CMS) has the statutory responsibility to administer the operation of passenger cars under the Governor’s executive departments, along with those agencies that desire to use CMS vehicle services.  The remaining executive branch agencies operate and control their own vehicles.  (report pages 1-3)

 

AUDIT RESOLUTION

 

House Resolution Number 658 asked for the total number of passenger cars at executive branch agencies.  The Office of the Auditor General (OAG) surveyed 82 agencies; 65 agencies reported that they had State-owned vehicles while 17 agencies reported that they did not have any State vehicles.

 

Total Vehicles

 

The 65 agencies had nearly 16,600 vehicles in Fiscal Year 2010 (see Digest Exhibit 1).  

 

• Almost 75 percent of the total State-owned vehicles were at agencies under the jurisdiction of CMS (12,000 of 16,592). 

• Over two-thirds of the vehicles (11,142 of 16,592) were at five agencies, as shown in Digest Exhibit 2. (pages 62-63)

 

Digest Exhibit 1

TYPES OF VEHICLES

Fiscal Year 2010

Vehicle Class

Number

Passenger Cars

5,489

Trucks up to 1½ Tons

3,884

Other Size Trucks

3,099

Minivans

1,115

Vans – Passenger

983

SUV’s

939

Vans – Other

813

All Other Vehicles

270

Total

16,592

Source:  Illinois Auditor General’s survey of State executive branch agencies.

 

 

Digest Exhibit 2

MOST VEHICLES

Fiscal Year 2010

Transportation

4,599

Illinois State Police

2,371

University of Illinois

1,572

Corrections

1,554

Natural Resources

1,046

Toll Highway

724

SIU

677

Human Services

548

Secretary of State

475

Agriculture

312

Illinois State University

310

All Other Agencies

2,404

Total Vehicles

16,592

Source:  Illinois Auditor General’s survey of State executive agencies.

 

Take-Home Vehicles

 

The 65 State agencies had 5,375 vehicles that were personally or individually assigned to employees and 5,144 vehicles were authorized to be taken home on June 30, 2010.   Digest Exhibit 3 shows agencies with more than 100 take-home vehicles.  (pages 65-67)

 

Digest Exhibit 3

TAKE-HOME VEHICLES

Fiscal Year 2010

Name; Total Vehicles; Individually Assigned Vehicles; Take-Home

Illinois State Police; 2,371; 1,830; 1,830

Department of Transportation   ; 4,599; 1,419; 1,281

Department of Corrections; 1,554; 640; 640

Illinois State Toll Highway Authority; 724; 314; *252

Secretary of State; 475; 240; 240

Department of Natural Resources ; 1,046; 235; 226

Department of Revenue; 160; 144; 144

Department of Agriculture; 312; 139; 136

All Other Agencies; 5,351; 414; 395

Total; 16,592; 5,375; 5,144

* Tollway said its take-home vehicles included 200 State Police District 15 vehicles.

Source:  Illinois Auditor General’s survey of State executive branch agencies.

 

Necessity

 

Agencies said it was necessary for their employees to take vehicles home to save the State time and money and for public safety reasons.  Some employees routinely traveled throughout a geographic territory; some were law enforcement personnel; and some were on call 24 hours a day, 7 days a week (e.g., emergency responders).  

 

Based on our sample of 100 take-home vehicles and information maintained by CMS, we questioned the necessity for certain take-home vehicles, such as those with extensive commuting miles or those where the purported need, such as responding to emergencies, was not readily apparent.  (pages 1-3 and 61-70)

 

Fiscal Year 2009 Cost

 

The total cost to acquire, repair, maintain, and operate State vehicles at the 65 State executive branch agencies was approximately $129 million in Fiscal Year 2009 (including $3 million for insurance):  vehicle acquisition or purchase ($45 million), fuel ($40 million), and repairs, maintenance, and other expenses ($41 million). 

 

• The cost of passenger vehicles (e.g., vehicles up to 1½ tons) was over $55 million. 

• Digest Exhibit 4 shows agencies that expended more than $1 million on vehicles in Fiscal Year 2009. 

• In Fiscal Year 2010, agencies reported spending approximately $121 million on their vehicles (including over $3.5 million for insurance).  (pages 71-72)

 

System to Record Use and Maintenance

 

CMS is responsible for ensuring that vehicles necessary for the operation of State government are acquired, maintained, and used in the most efficient and least costly manner according to CMS administrative rules. 

 

• The Division of Vehicles has some information on vehicles under its jurisdiction but DOV said vehicle use and maintenance is up to each agency.  DOV said its role is to oversee the fleet of State vehicles. 

• Agencies said CMS could provide reports on vehicle maintenance, repairs, and annual inspections and have one system for both the CMS and Wright Express credit cards.  (pages 74-77)

 

Tracking Vehicles

 

The Division of Vehicles does not track vehicles to ensure that they are used for official business but leaves it to individual agencies.  The DOV said that agency logs, management oversight, and regular review of fleet expenditures are tools to ensure appropriate use of fleet vehicles.

 

• Global Positioning Systems (GPS) can be used to track the location of vehicles.  Two agencies, the Illinois State Toll Highway Authority and Illinois Workers’ Compensation Commission, are currently using GPS on vehicles.

• DOV said that a GPS system could be expensive but would reduce the cost of managing the fleet.  Other agencies also noted that GPS may be costly but could ensure vehicles were used for State business. 

• GPS systems are becoming more common and being used more as their prices have dropped.   (pages 77-80)

 

VEHICLE ADMINISTRATION

 

Agencies lacked adequate controls over the use of State-owned vehicles.  Specific daily vehicle logs were not kept by all the agencies, making it difficult to determine (1) if vehicles were used for State business only and (2) if it was cost effective to provide a State vehicle (e.g., annual miles driven, excessive commuting).  (page 35)

 

Operations

 

CMS has established administrative rules to govern State vehicles.  The rules state that CMS should ensure that State vehicles are used in “the most efficient and least costly manner.” 

 

The CMS Division of Vehicles said vehicle operations are the responsibility of individual agencies and that it is not charged with monitoring vehicles.  Monitoring is an important responsibility since information on miles driven, commuting miles, and fuel consumption could indicate if the vehicle is necessary or if the vehicle is being driven for official business only. 

 

We recommended that the Division of Vehicles should become more actively involved in the operation and oversight of State vehicles to ensure they are maintained and used in the most efficient and least costly manner.   (pages 17-25)

 

Vehicle Information

 

CMS maintains some information on State-owned vehicles under its jurisdiction in two spreadsheets.  One has information on the entire State fleet under its jurisdiction while a second has information on vehicles that are individually assigned (IAV); see criteria in Digest Exhibit 5.  However, this annual IAV report contained errors which limited its reliability, accuracy, and usefulness.  (pages 4, 18-22)

 

Coordinators

 

Vehicle coordinators at each agency are responsible for monitoring vehicle efficiency and providing oversight, per the CMS Vehicle Guide. 

 

• Vehicle coordinators were not properly checking vehicle logs, monitoring commuting miles, or submitting accurate reports. 

• Having accurate vehicle information is important so the agency knows what the State vehicle is costing, whether a vehicle is necessary, whether the vehicle is being used for State business, and whether federal taxes are being paid.  (pages 25-27)

 

License Plates

 

A total of 218 State vehicles at 20 agencies under the jurisdiction of CMS used conventional (or “straight”) license plates in 2010, rather than “U” plates.  DOV did not keep a public record of the non U-plates approved as required by statute (30 ILCS 610).  DOV did not require that the agency head certify that the vehicle with conventional plates would be used for functions requiring conventional plates, as required by CMS administrative rules (44 Ill. Adm. Code 5040.320(c)(2)):  “The agency head must certify that the vehicle bearing the conventional plate will be used substantially full-time in functions requiring the conventional plate.” [emphasis added]   (pages 29-33)

 

Breakeven Miles

 

In January 2011, the CMS Division of Vehicles performed a calculation on the number of miles that a vehicle would need to be driven to break even (or be cost-effective for the State).  This analysis shows how much a State vehicle costs and may be considered by an agency to determine if it should provide a vehicle for official business or reimburse the employee for using his/her own vehicle.  Costs are not the only consideration in providing a State vehicle as some vehicles are necessary due to lights, equipment, tools, and off-road (4-wheel drive) capability.

 

• Based on the breakeven calculations provided by CMS, if vehicles are not driven a minimum number of miles – between 7,000 and 12,000 miles per year depending on the type of car – it would be more cost-effective for the State to reimburse the employee for use of a personal vehicle.

• One-fourth of the 100 vehicles in our sample were not driven at least 1,150 miles in the two months sampled, or nearly 7,000 miles per year.  (pages 36-41)

 

Purchasing

 

According to CMS administrative rules, agencies may purchase a passenger vehicle if it is expected to be used 18,000 miles per year (see Digest Exhibit 6); otherwise, it may still be purchased if the agency’s operational needs are explained by the agency head.  

 

Digest Exhibit 6

EXPECTED USAGE 18,000 MILES

44 Ill. Adm. Code 5040.270

“Expected usage.  New and leased general purpose passenger vehicles are to be used a minimum of 1,500 miles per month [18,000 miles per year] . . . .”

 

• The Fiscal Year 2010 reports filed by agencies with CMS listed over 1,000 of the 1,800 IAVs that were not driven an average of 18,000 miles per year; some were not even driven 7,000 miles per year.

• In Fiscal Year 2010, agencies requested purchasing 900 passenger vehicles.  All requests were approved by the Division of Vehicles.  Over 250 of the vehicle requests said their new vehicle was expected to be driven exactly 18,000 miles per year.  (pages 40-42)

 

Vehicle Logs and Commuting

 

Digest Exhibit 7

GOVERNOR’S POLICY

Assignment of State Vehicles

April 12, 2010

 Vehicles may not be assigned as a form of compensation, as a benefit, or based solely on an employee’s title . . . . As a general matter, unless it is in the best interests of the State, commuting miles should not exceed 30% of miles driven.  Commuting miles over 30% of total annual miles should be carefully evaluated by agency heads.” [emphasis added]

 

The Governor issued a policy on April 12, 2010 which stated that if a vehicle is used to commute between home and office (work headquarters) more than 30 percent of the total miles, it should be “carefully evaluated” by agency heads (see Digest Exhibit 7). 

 

State vehicles were used extensively (greater than 30% of total miles driven) for commuting, according to the 2010 annual IAV report prepared by the CMS Division of Vehicles. 

 

• We sampled 100 vehicles from 32 agencies for September and October 2010:  76 vehicles were under the jurisdiction of CMS and the remaining 24 vehicles were under the jurisdiction of other executive branch agencies. 

 

Digest Exhibit 8

CMS DIVISION OF VEHICLES

June 10, 2010 Letter to Agencies

 “Agency drivers and agencies are responsible to ensure individually assigned vehicle drivers maintain a vehicle log that includes date, travel destination, beginning and ending mileage, commuting miles, and commuting trips . . . .” [emphasis added]

 

• Of the 76 vehicles under CMS, which were required to keep logs, 50 vehicles had logs (see Digest Exhibit 8).  The logs showed that 20 vehicles (40%) were used to commute more than 30 percent of total miles, including 10 vehicles that were used to commute over 50 percent of the total miles.    

• The number of vehicles used for commuting over 30 percent of the total miles may be even higher as agencies did not always keep daily vehicle logs. 

 

Agencies kept different types of logs, including logs which were just monthly or lacked destinations and commuting miles.  The lack of complete and accurate data on number of days traveled, destinations, total miles, and commuting miles limited our analysis of the need for take home vehicles. 

 

Daily logs can help agency management monitor the purpose for which the vehicle is used and determine if it is cost effective for the State to provide a vehicle.  (pages 4-5, 43-47)

 

Federal Taxes

 

The Internal Revenue Service requires employers to tax the value of vehicles provided to employees for commuting between home and work headquarters (with exceptions such as law enforcement, public safety).  Taxes are due on all employees who commute in an employer’s vehicle. 

 

• For the 100 employees we sampled, 55 employees paid the federal commuting taxes.  Agencies for nine employees did not provide documentation to show they paid commuting taxes. The remaining 36 employees either did not use their State vehicles to commute, or did not have specific vehicle logs, or were exempted from paying this tax (by 2011 IRS Publication 15-B) due to the nature of their work (e.g., vehicles used for police, fire, public safety, cargo, delivery, etc.).

• The Governor’s April 12, 2010 policy on individual assignment of vehicles states that, “Employees’ failure to report their commuting properly can result in additional amounts included in their income.”  (pages 55-56)

 

Monitoring Miles

 

State agencies generally monitor the miles driven on State-owned vehicles by using the vehicle’s mileage logs.  Agencies said they used in-house estimates or a CMS tool called a trip cost calculator for comparing the cost of a vehicle with reimbursing an employee for using a personal vehicle.  (pages 57-60)

 

Vehicle Policy

 

The 43 agencies with most of the State-owned vehicles had established a vehicle policy; however, 22 agencies with State-owned vehicles did not have a policy, including agencies with as many as 81 vehicles. 

 

• These agencies had a combined total of over 350 State-owned vehicles and included 9 agencies with at least 10 vehicles each. 

• A vehicle policy could address the purpose of the vehicle, procedures for using pool vehicle(s), records that need to be kept (e.g., total and commuting miles), reports that need to be filed, taxes that need to be paid if used for commuting or personal use, employees who review the reports (e.g., supervisor, vehicle coordinator), supporting documents that employees need to provide (e.g., vehicle log, credit card receipts), disciplinary action that may be taken if vehicle is improperly used, etc.   (pages 81-83)

 

RECOMMENDATIONS

 

The audit made 14 recommendations to CMS which it generally agreed to implement.  CMS’ entire response is in Appendix G and also after each audit recommendation.

 

 

WILLIAM G. HOLLAND

Auditor General

 

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