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Home My WebLink About1516-10 Follow-up report on Light Fleet management (Final 4-11-16)Follow-up report of Light Fleet Management #15/16-10 April 2016 FOLLOW-UP REPORT Light Fleet Management (Internal audit report #14/15-10 issued March 2015) To request this information in an alternate format, please call (541) 330-4674 or send email to David.Givans@Deschutes.org Deschutes County, Oregon David Givans, CPA, CIA, CGMA Deschutes County Internal Auditor PO Box 6005 1300 NW Wall St Bend, OR 97708-6005 (541) 330-4674 David.Givans@Deschutes.org Audit committee: Shawn Armstrong, Chair - Public member John Barnett - Public member Chris Earnest - Public member Lindsey Lombard - Public member Michael Shadrach - Public member Wayne Yeatman - Public member Anthony DeBone, County Commissioner Nancy Blankenship, County Clerk Dan Despotopulos, Fair & Expo Director Follow-up report of Light Fleet Management #15/16-10 April 2016 TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background ………………………………………...………………................................... 1 1.2. Objectives & Scope ……………………………………..………………………….…….… 1 1.3. Methodology ……………………………………………………..…………………….……. 1 2. FOLLOW-UP RESULTS ……………….…...………………………….............................. 2 3. APPENDIX 3.1. Appendix I – Updated Workplan for Report #14/15-10 (Status as of March 2016) …............................................................................ 3-5 Follow-up report of Light Fleet Management #15/16-10 April 2016 Page 1 1. Introduction 1.1 BACKGROUND Audit Authority: The Deschutes County Audit Committee has suggested that follow-ups occur from nine months to one year after the original report issuance. The Audit Committee’s would like to make sure departments satisfactorily address recommendations. 1.2 OBJECTIVES and SCOPE Objectives: The objective was to follow-up on the outstanding audit recommendations. Scope: The follow-up included fourteen (14) recommendations from the internal audit report on Light Fleet Management (#14/15-10 issued June 2015). The Road Department has been working on these recommendations. The follow-up reflects the status as of March 2016. The original internal audit report should be referenced for the full text of recommendations and discussion. 1.3 METHODOLOGY The follow-up report was developed from information provided by Chris Doty, Director, Road Department as well as input from Tom Anderson, County Administrator. In cases where recommendations have not been implemented, comments were sought for the reasons why and the timing for addressing these. The follow- up is, by nature, subjective. In determining the status of recommendations that were followed up, we relied on assertions provided by those involved and did not attempt to independently verify those assertions. The updates received from the Road Department are included in Appendix I. Since no substantive audit work was performed, Government Auditing Standards issued by the Comptroller General of the United States were not followed. DESCHUTES COUNTY INTERNAL AUDIT REPORT DESCHUTES COUNTY INTERNAL AUDIT REPORT DESCHUTES COUNTY INTERNAL AUDIT REPORT Follow-up report of Light Fleet Management #15/16-10 April 2016 Page 2 2. Follow-up Results Figure I - How were recommendations implemented? The follow-up included fourteen (14) recommendations. Management agreed with all of the recommendations. Figure I provides an overview of the implementation status of the recommendations. The details of the updated workplan are provided in Appendix I. With this follow-up, zero percent (0%) of the recommendations are completed. Follow-up report of Light Fleet Management #15/16-10 April 2016 Page 3 3. Appendix Appendix I – Updated Workplan for Report #14/15-10 (Status as of March 2016) Rec No. Recommendation Original Department Comments Updated Status Estimated Date UPDATED COMMENTS 1 It is recommended the County [with the assistance of the Fleet Manager (Road)] develop a fleet management policy, obtain input from County management and departments, and secure approval of the policy from upper management/Board. While developing a fleet management policy is likely to be the eventual outcome, I would suggest that as an intermediate step a work group composed of Fleet/Road management along with appropriate personnel from client departments be convened. The purpose of the group would be to discuss the recommendations contained within the audit report against the context of the unique operational realities and requirements of those departments. A more centralized role of Road Department Fleet Management will be most effective with input from client departments. Even then, the primary role of Fleet management must balance the fleet management goals with the operational needs of the departments. Underway 9/30/2016 A team of Road Department staff is developing a draft fleet policy in which to initiate the conversation with client departments regarding the recommendations in the audit. Once drafted, Road Department staff will meet individually with client departments to discuss the goals of maximizing efficiency within the fleet while meeting the operational needs of the departments. 2 It is recommended the policy guidance include associated forms and materials anticipated to be used to control and monitor vehicle fleet decisions. Underway 9/30/2016 The draft policy will include life-cycle targets, recommended standardized vehicle applications, and a decision tree to guide decision making pertaining to necessity of fleet. 3 It is recommended for the County to consider policies that support increasing vehicle utilization. Underway 9/30/2016 Vehicle utilization targets will be included in the Fleet Policy. 4 It is recommended the County utilize the Fleet Manager role to better understand and develop practices for improving vehicle utilization. Underway 9/30/2016 The draft policy will define the Fleet Manager's role as it pertains to responsibilities and annual deliverables. 5 It is recommended for the Road Department to develop a system for providing a value for transfers of vehicles between departments. Underway 9/30/2016 To be included in the Fleet Policy. Follow-up report of Light Fleet Management #15/16-10 April 2016 Page 4 Rec No. Recommendation Original Department Comments Updated Status Estimated Date UPDATED COMMENTS 6 It is recommended for the Road Department to consider whether it would be beneficial to further refine the way it accounts for its costs. Underway 9/30/2016 The Road Department is evaluating cost accounting related to Fleet Maintenance as a stand alone cost center within the Department. Specifically the overhead rate as it applies to the labor charge. 7 It is recommended for the County to consider how to establish motor pools and associated charges for departments that use them. Increased use of motor pools may be effective means of better utilizing vehicles, but availability is key, along with accountability among participating departments. A measured approach may therefore be optimal Underway 9/30/2016 To be addressed/evaluated in the Fleet Policy and the associated policy development process involving the client departments. 8 It is recommended the County consider implementing an internal service fund approach for fleet. Planned 9/30/2016 To be evaluated after finalization of the Fleet Policy 9 It is recommended for the County (and Road Department) to establish performance measures to assist in assessing the effectiveness and efficiency of the light vehicle fleet as well as fleet services provided. Enhanced performance reporting is supported Underway 12/31/2016 In-process, exclusive of the Fleet Policy development. County policy RM-1 (or similar policy) should be updated to address the following recommendations for take home County vehicles: A more in depth examination of take home vehicles, tax reporting and the utility of Policy RM-1 will be undertaken 10 It is recommended the County institute a system to identify take home vehicle usage and evaluate how to comply with IRS rules. Underway 12/31/2016 Staff is performing research regarding how the industry addresses this topic relating to IRS definitions of the various classifications of qualified non- personal use vehicles. 11 It is recommended for the County to take steps to inform affected departments and employees of potential taxable fringe benefits resulting from take home vehicle use. Underway 12/31/2016 It is anticipated that a separate policy will be formed resulting from the necessity to address the take-home vehicle and fringe calculation issue. Follow-up report of Light Fleet Management #15/16-10 April 2016 Page 5 Rec No. Recommendation Original Department Comments Updated Status Estimated Date UPDATED COMMENTS 12 It is recommended the County establish sufficient systems to gather information that will be needed to evaluate, calculate and report the income and payroll tax for take home vehicles. Planned 12/31/2016 Associated with new policy, above. 13 It is recommended for the departments to institute appropriate policies over provided take home vehicles. Underway within Road 12/31/2016 14 It is recommended the County consider approaches to assure policies are communicated and implemented by departments. Policy GA-19 should be shared with all departments. The intent of Policy G-19 should be reviewed as part of the work group noted above. Data collection should optimally be done in an automated way centrally rather than by client departments, and only if necessary for appropriate analysis. Planned 9/30/2016 To be reinforced through the implementation process associated with the new Fleet Policy. slow start, we have been meeting weekly for the past several months to develop/refine a policy that we intend to use I have reviewed the updated progress submitted by the Road Department. I am in full support of the actions taken to date and the department's schedule to complete the project. Since the items recommended for the County to address (take home vehicle policy, Policy GA-19, data collection, etc.) are either incorporated into or flow from the department's work plan, I have nothing further to add at this time. County Admin will continue to review and monitor response progress. Thanks, Tom Anderson, County Administrator the conversation with client departments. We feel it would be better to have something in - hand when we he discupolicy that has been vetted through client departments. I am hopeful that we will have good information in time for the FY 18 Budget process. ndfor the delay. For whatever reason I had it in my mind that it was due today. {END OF REPORT}