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Audit of the LAWA's management controls over its home-garaged & pool vehicles

Audit of the LAWA's management controls over its home-garaged & pool vehicles

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We found some issues that are common to vehicles assigned to individual employees
and to Central pool locations and LAWA Divisions. These include the following:

Finding 10: LAWA does not assess the vehicle needs of Central pools and LAWA
Divisions, or its home-garaged vehicle program.

The Facilities Management Division and other LAWA Divisions confirmed that there has
been no utilization analysis done for either the home-garaged and pool/divisional
vehicles to measure the usage and efficiency of vehicles assigned. LAWA has not
analyzed and therefore cannot ensure that an appropriate number of vehicles are
assigned among the Divisions, or to the home-garaged program.

Utilization analysis includes developing and establishing criteria (e.g., minimum mileage,
trips, or days of use) that can be used to measure the vehicles’ efficiency. It could also
include tracking actual business miles incurred and comparing results with previously
established criteria. For example, if the miles (or other measure) do not meet the
criteria, LAWA may consider eliminating or re-allocating the cars to maximize usage.
Such an analysis would help LAWA balance the distribution of existing vehicles among
the Divisions, and/or reduce the number of fleet vehicles to lower its overall costs.

For example, we observed that there may be excess vehicles reserved for Executives in
the Fleet Maintenance section. Out of 32 loaner cars maintained, eight cars are
reserved for Executives to serve as replacement loaners if/when their assigned home-
garaged vehicle is undergoing maintenance. According to Fleet Maintenance, they do
not allow other staff or Divisions to use the loaner cars that are reserved for Executives.
This is an area where results of a utilization analysis can be useful; helping management
determine if some cars can be eliminated from this section, and re-allocated to other
Divisions where there is a greater need.

Recommendations:

LAWA management should:

18. Assess the vehicle needs of LAWA Divisions and home-garaged vehicle
permittees by performing a utilization analysis. This will ensure LAWA
Divisions and the home-garaged vehicle program are allocated the
appropriate number of vehicles.

19. Establish specific criteria (e.g., expected business miles, minimum
mileage, or days of use) that can be used in measuring the efficiency of
vehicle usage.

30

20. Have a process in place to ensure vehicles that do not meet the expected
criteria are eliminated or re-allocated to other Divisions where more
vehicles are needed.

21. Where material reductions in service levels are observed, attempt fleet
reduction to reduce costs

Finding 11: LAWA’s vehicle replacement practices do not adequately address
current needs; reducing opportunities to purchase less expensive
and fuel-efficient cars whenever feasible.

According to Fleet Maintenance staff, in most cases the replacement vehicle purchased
is the same type (make/model of car or truck) as the old one being replaced. For
example, LAWA’s Information Technology Division stated that they were not consulted
when their vehicles were replaced by LAWA’s Fleet Group to determine their current
needs. They needed a box-truck type but found out they were getting the same type of
truck (with bed) as the replaced vehicle.

As previously mentioned, replacing a vehicle does not require a new justification from the
receiving Division. However, the Division’s current operational needs should be
considered for purchasing decisions related to replacement vehicles, along with an
analysis if a less expensive, more fuel-efficient option would be feasible.

We reviewed a sample of vehicles with a purchase price of up to $51,000, noting that a
majority of these were trucks assigned to the ADG-Inspection Division. Of the 20 pool
vehicles assigned to the ADG-Inspection Division, most are trucks including some sports
utility vehicles. All are assigned to specific employees for their use in inspection
activities during the workday; and many of the Division’s inspection staff drive their
private vehicles for inspection activities and receive mileage reimbursement.

Within the Inspection Division, a variety of vehicle types is used to perform their work.
The Division pool includes small sedans fueled by CNG, pickup trucks, and SUVs, while
several Inspectors utilize their personal vehicles of various makes/models. As a variety
of vehicle types could be adequate for this Division’s use, LAWA should consider the
most cost effective options that will best meet operational needs when buying future
replacement vehicles.

Recommendations:

LAWA management should:

22. Consider current needs of Divisions when purchasing replacement
vehicles, and procure less expensive, more efficient models whenever
feasible.

32

AUDIT OF LAWA’S MANAGEMENT CONTROLS
OVER ITS HOME-GARAGED AND POOL VEHICLES
APPENDIX A

Ranking of Recommendations

Description of Finding

Ranking
Code

Recommendations

Section I: Home-Garaged Vehicles

1

LAWA lacks centralized accountability and
control over assigned take-home vehicles.
Information is inadequately maintained in
LAWA’s centralized listing, and not all employees
who had custody of a LAWA take-home vehicle
were properly authorized.

U

U

LAWA management should:

1. Implement

effective
centralized control over the
administration of home-
garaged vehicles to ensure
full accountability and
accurate reporting.

2. Require periodic verification
of all home-garaged vehicle
assignments to the central
listing,

to

ensure
appropriate control and
accurate reporting.

2

LAWA does not have a process to ensure
employees are formally approved for the home-
garaged vehicle program and that they meet the
Department’s established criteria.

U

U

N

N

3. Develop

clear

and

consistent

criteria

for
assigning home-garaged
vehicles to ensure that each
assignment

can

be
adequately justified by the
City’s business needs in the
most economical manner.

4. Ensure all home-garaged
authorizations, including the
recommendations

for
assignments and executive
management approval, are
maintained in a central
location.

5. Implement a process to
periodically review home-
garaged

vehicle
assignments to ensure that
each permittee continues to
have a justified business
need to take a LAWA
vehicle home.

6. Establish a process to

33

eliminate or re-allocate
vehicles that do not meet
the criteria for assigning a
home-garaged vehicle.

3

.
Providing and maintaining home-garaged
vehicles is more costly than other alternatives.

N

7. Pursue options to lower the
costs associated with the
home-garaged

vehicle
program, such as reducing
the number of take-home
vehicles and making them
available to Divisional pools;
for selected executives,
consider providing a car
allowance in lieu of a home-
garaged vehicle.

4

The Department’s home-garaging policy does
not require permittees to obtain additional
personal car insurance to cover liability that may
arise from driving a City vehicle outside of its
intended use for City business.

N

8. Revise the home-garaged
vehicle program considering
the potential liability to
LAWA arising from driving a
City vehicle outside of its
intended use for City
business,

or

under
circumstances where a
driver could be deemed
grossly negligent. This
would include requiring
employees with authority for
home-garaging to provide
verification of personal
vehicle

insurance,

or

knowingly assume the risk.

5

LAWA’s home-garaging vehicle policy should
include specificity regarding the use of the
vehicles, and be formally approved by LAWA’s
Board.

U

9. Develop a comprehensive
vehicle-use policy,
approved by the LAWA’s
Board, for the Department’s
home-garaged program that
includes specific standards
on the use and assignment
of take-home vehicles.

Section II: Vehicles Assigned to Central
Pools and LAWA Divisions

6

LAWA does not maintain accurate and complete
information on Divisional pool vehicles.

U

10. Ensure

the

fleet

management

system
provides reliable, complete
and

accurate

vehicle

34

information for effective
inventory control.

7

Divisional pool vehicles may not be utilized to
maximize effectiveness, and the mileage
reimbursement program must be better
controlled.

N

U

N

11. Assess the needs and
actual use of the fleet
vehicles that are currently
assigned to Divisions; and
consider reallocation to
maximize

usage

and
effectiveness. Also, ensure
pool vehicles are utilized to
the fullest before approving
staff to use their personal
vehicles

and

receive

mileage reimbursements.

12. Establish

appropriate

controls

to

ensure
employees are assigned
headquarters

location
based on their work
assignment rather than their
home address.

13. Implement

adequate

controls

to

ensure
employees do not receive
mileage reimbursement if
they are also assigned a
pool vehicle. Supervisors
must adequately review
mileage reports to identify
potential abuse.

8

LAWA does not have adequate controls over the
vehicle replacement process, or of the disposal
of replaced vehicles.

U

U

N

14. Establish sufficient controls
to prohibit using the same
vehicle to justify the
purchase of more than one
replacement vehicle.

15. Ensure that replacement
vehicles

targeted

for

replacement

are
surrendered to the fleet
group for proper disposal.

16. Ensure

all

vehicle
purchases are properly
identified

as

either

“Additional”

or
“Replacement” vehicle in
the fleet system for proper
tracking and reporting.

35

9

LAWA must strengthen procedures to ensure
employees with suspended drivers’ licenses are
prevented from driving vehicles on City business.

U

17. Implement

sufficient
procedures to ensure
employees

with

a
suspended license are
prevented from driving on
City business, using either a
City car or their personal
vehicle, and receiving
mileage reimbursement.

Section III: Cross-Cutting Issues

10

LAWA does not assess the vehicle needs of
Central pools and LAWA Divisions, or its home-
garaged vehicle program.

N

N

N

N

18. Assess the vehicle needs of
LAWA Divisions and home-
garaged vehicle permittees
by performing a utilization
analysis. This will ensure
LAWA Divisions and the
home-garaged

vehicle
program are allocated the
appropriate number of
vehicles.

19. Establish specific criteria
(e.g., expected business
miles, minimum mileage, or
days of use) that can be
used in measuring the
efficiency of vehicle usage.

20. Have a process in place to
ensure vehicles that do not
meet the expected criteria
are eliminated or re-
allocated to other Divisions
where more vehicles are
needed.

21. Where material reductions
in service levels are
observed, attempt fleet
reduction to reduce costs.

11

LAWA’s vehicle replacement practices do not
adequately address current needs; reducing
opportunities to purchase less expensive and
fuel-efficient cars whenever feasible.

N

N

22. Consider current needs of
Divisions when purchasing
replacement vehicles, and
procure less expensive,
more efficient models
whenever feasible.

23. Adopt a maximum price and
fuel efficiency guidelines for
all vehicle purchases (i.e.,

36

replacements and additions)
and require that any
exceptions from those
guidelines be justified in
writing.

Description of Recommendation Ranking Codes

U- Urgent-The recommendation pertains to a serious or materially significant audit finding or control
weakness. Due to the seriousness or significance of the matter, immediate management attention and
appropriate corrective action is warranted.

N- Necessary- The recommendation pertains to a moderately significant or potentially serious audit
finding or control weakness. Reasonably prompt corrective action should be taken by management to
address the matter. The recommendation should be implemented within six months.

D- Desirable- The recommendation pertains to an audit finding or control weakness of relatively minor
significance or concern. The timing of any corrective action is left to management’s discretion.

N/A- Not Applicable

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