Audit Uncovers Issues in Public Works Fleet Management Division

A local audit discovered several deficiencies in the City’s fleet management operations. The audit, which examined practices in the Building Systems and Fleet Management Division (BSFMD), identified high, medium, and low-risk issues.

The Fleet Management Division provides service for fleet maintenance and repairs for city vehicles and related equipment, as well as vehicle replacements for many departments. Fleet Management’s technicians maintain vehicles and equipment, ranging from mowers to light electric vehicles to police cruisers to large fire and sanitation trucks

High risk issues include inconsistent monitoring for safety recalls, access to management systems not properly restricted, The audit also found that fleet management billing was often late and lacked proper supporting documentation, leading to significant billing discrepancies.

Access to the management system has been made and corrections have been made to the billing system. Plans are in place to better monitor safety recalls. 

The department’s work plans aim to address all audit recommendations by the end of Fiscal Year 2025, with a focus on procurement processes, vehicle safety, data security, billing practices, and inventory control.

“The Department of Public Works understands the significance of the internal audit findings contained in this report and is committed to making the necessary improvements to the Fleet section of the Building Systems and Fleet Management Division,” said Public Works Director Gregory de Vinck in a memo to Internal Audit Manager Ruthie Holden. 

The Finance Committee is expected to hear details of the audit in an information item on Monday, June 16, before the City Council meeting. The committee is chaired by Mayor Victor Gordo.

No embezzlement was uncovered as a result of the audit. An audit in Dec. 2024 led to the arrest and conviction of a then-recently fired employee in the department who pilfered $6.4 million over 11 years. 

This recent audit identified that BSFMD’s procurement practices were ineffective and not in compliance with City policies. To address this, PW has started implementing new standard operating procedures (SOPs) to bring operations in line with the City’s Purchasing Handbook and municipal code.

A significant project to consolidate 33 types of services into 15 multi-year contracts is already underway and is expected to reduce the number of small purchase orders issued over the next five years. This effort will continue through Fiscal Year 2025, with an expected completion date in June 2025.

The audit also found medium medium risk findings, inaccurate or incomplete data in FASTER.

The audit revealed that FASTER data contained inaccuracies and incomplete information, including missing vehicle warranty details. BSFMD has already corrected 95% of the vehicle warranty data in FASTER and plans to complete the remaining updates by June 2025. The department will also conduct quarterly quality control reviews to ensure ongoing data accuracy.

Issues were also raised about excessive adjustments to parts inventory in the FASTER system. In response, BSFMD has implemented stricter controls, with Parts Technicians now the only staff authorized to manage inventory adjustments. The Fleet Superintendent must approve any inventory changes, and a monthly inventory audit report will be introduced by March 2025 to track and address discrepancies.

The audit also identified several low-risk findings, including weaknesses in the manual logging of fuel transactions and the management of fuel fobs. As of November 2024, BSFMD has implemented an SOP for manually logging fuel transactions and developed a customer service agreement for fuel fob users. The department will also introduce a policy that regulates the distribution and usage of fuel fobs, which will include monthly reconciliation reports from each department. The new policy and service agreement are expected to roll out by June 2025.

The audit found that BSFMD had no performance measures in place to assess the efficiency and effectiveness of its fleet operations. In response, the department is working to develop specific operational and staff performance measures. The new metrics will hold staff accountable for both administrative and operational duties, with full implementation expected by June 2025.

The department expects to complete the majority of the corrective actions by the end of Fiscal Year 2025, with ongoing monitoring to ensure continuous improvement.