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1 Montana* 52*5 Legislative Audit 72v£ix Division 986 Vehicle fleet nanaaenent Legislative Audit Division State ofMontana Report to the Legislature Limited Scope Performance Audit February 1996 Vehicle Fleet Management This reportcontains information pertaining to themanagement ofthe stateofMontana's vehiclefleet. Werecommend theDepartment of Administrationworkwith stateagencies to develop and distribute "best practices" for vehiclemanagement. STATE DOCUMEfJTS CCLL MONTANA STATE LIBRARY HELEN1A5,15MEO.N6TtAhNAAVE5.9S20 il mI-—- HM.: 8- - Directcomments/inquiries to: LegislativeAuditDivision Room 135 StateCapitol PO Box 201705 MT Helena 59620-1705 94P-43 MONTANASTATELIBRARY 0CT17 T997 3 0864 0009 9239 9 ^PR13 1998 PERFORMANCEAUDITS Performance audits conducted by the Legislative Audit Division are designed to assess state government operations. From the audit work, a determination is made as to whether agencies and programs are accomplishing their purposes, and whether they can do so with greater efficiency and economy. Inperforming the audit work, the audit staffuses audit standards set forthbytheUnited States General Accounting Office. Members of the performance audit staff hold degrees in disciplines appropriate to the audit process. Areas ofexpertise include business and public administration, statistics, economics, computer science, communications, and engineering. Performance audits areperformed attherequestoftheLegislativeAuditCommittee which is a bicameralandbipartisanstandingcommitteeoftheMontanaLegislature. Thecommitteeconsists ofsixmembers oftheSenate and sixmembers oftheHouseofRepresentatives. MEMBERS OFTHE LEGISLATIVE AUDITCOMMITTEE Legislative Audit Division Limited Scope Performance Audit Vehicle Fleet Management Audit staffinvolved in this audit was Mary Zednick. Table ofContents List ofTables ijj Administrative and Appointed Officials iv Report Summary S-l Chapter I- Introduction Introduction 1 AuditObjectives l Audit Scope and Methodology 1 Agency Vehicles Included in Review 2 Methodology 2 Management Memorandums 3 ReportOrganization 4 ChapterII- Introduction 5 Background Number ofVehicles and Type 5 LocationofVehicles 8 Chapter III - Optimal Introduction 9 VehicleManagement Varied Approach to Use and Care 9 Procurement Procedures 10 Needs Assessment Practices 10 Options AreAvailable 13 Conclusion 15 Replacement Practices 15 Purchasing 17 Conclusion: ProcurementPoliciesNeeded 18 Use and Control 18 Who Can Usethe Vehicles and for What Purpose? 18 Data Records for Vehicle Usage 20 VehicleUtilization Review 22 Conclusion: UseandControl GuidelinesNeeded 24 Maintenance 24 Operating, Maintenance, and Repair Cost Records 25 Preventive Maintenance Program 26 Managing Vehicle Maintenance Programs 27 Conclusion:Maintenance GuidelinesNeeded 28 Disposal 28 Page i Table ofContents Inventory 29 Conclusion -Agencies Can Workwith Each Otherto ShareBestPractices 31 Agency Response Department ofAdministration 35 Pageii Table 1 Appointed and Administrative Officials Department of Lois Menzies, Director Administration Pageiv Report Summary Introduction The stateowns or leases over 3,000 vehicles ofoneton or less located throughout the state. Thevehicles are managed by 47 state entities. The intent ofthe audit was to use the practices ofthe state agencies themselves to help develop a setof "bestpractices" for vehicleuse, care and maintenance. Thesepractices could then be used by all agencies to manage their fleets. Audit results show the statehas avaried approach to vehicle use and care based on decisions made by individual employees. Thepractices are so individually-based, the state is not fully realizing any efficiency from communication of "bestpractices." Optimal Vehicle We identified fivebasiccomponents ofanoptimal Vehicle Management Management System: Procurement - needs assessments, replacement, and purchasing. Use and control -definitions oflegitimate vehicleuse, data records forusage (dates, mileage, purpose), vehicle utilization, and actual operating costs (fuel, oil, routinemaintenance, and emergency repairs). Maintenance - maintaining cumulative operational and repair cost records foreach vehicle, and adherenceto apreventive maintenance program. Disposal -criteriato follow when disposing ofvehicles. Inventory - maintenanceofdata records for each vehicle by type, serial number, initial cost and location, and conducting, reconciling, and documenting an annual internal inventory ofthe vehiclefleet. Wereviewed vehiclemanagement practices in six state agencies and two university units and found most stateentities visited did nothavewrittenpolicies and procedures concerning the five basic components. The individualized vehicle management style has led to some inconsistencies and inefficiencies. For example: — Most agencies do notconduct formal needs analyses to determine ifavehicle is needed to meettheorganization's mission orobjectives. PageS - 1 Report Summary - Vehicles havebeen replaced shortly aftermoney is spent repairingthem. - New vehicles arepurchased when aused vehicleor short-term leasecouldpossibly meet theprogram's needs. - Personal vehicles areused in some agencies becausethere are no writtenpolicies asto who canusevehicles and for what purpose. ~ Datarecords are not always maintained so vehicleusagecannot bedetermined. - Few utilization reviews areconducted to determine how much vehicles areused or ifthey areused efficiently. - Most agencies do nottrackoperating, maintenance, and repair costs. - Preventivemaintenanceprograms vary within agencies. - Vehicles arenotdisposed ofwhenthey areno longeroperable and insurance is still paid onthem. Thestateneeds policies orguidelines pertainingto vehicle management to alleviatethe inconsistencies and inefficiencies found intheaudit. Inmostofthe agencies wevisited theperson overseeingthevehicles was nothiredforthatduty. Forexample, vehiclemanagement becamepartoftheduties ofapurchasing agent and adivision administrator. A "manual ofbestvehicle management practices" would help these and other agency staff determinethemost appropriatemethods to efficiently manage agency-ownedvehicles. WebelievetheDepartment ofAdministration (DofA) should work with other agencies to develop "bestpractices" forvehicle management. DofA could usetheexistingexpertiseatthe Departments ofTransportation and Fish, Wildlifeand Parksto help formulate appropriateguidelines. Theseguidelines could then be distributed to vehicle/fleetmanagers in state agencies. PageS-2