The City of New York Office of the Comptroller
Bureau of Management Audit

AUDIT REPORT ON THE CONTROLS OF THE DEPARTMENT OF DESIGN AND CONSTRUCTION OVER CONTRACTOR-PROVIDED VEHICLES

MH06-130A
JuNE 26, 2006

AUDIT REPORT IN BRIEF

Download the Complete Audit Report (pdf 235 kb)

           This audit determined whether the Department of Design and Construction (DDC) has adequate controls over the use and assignment of contractor-provided vehicles to DDC employees.  The scope of this audit was Fiscal Year 2006.

                Through the use of engineers, architects, and construction professionals, DDC designs and builds the City’s streets, highways, sewers, and water mains as well as its public buildings.  As of May 15, 2006, DDC oversaw 354 construction contracts totaling $1.5 billion. 

                DDC provides its engineers at the Technical Support Division and the Infrastructure Division with vehicles to perform on-site inspections for construction-related projects across the City and to attend meetings at the various job sites.  Some large construction contracts have provisions that provide for one or more vehicles to be used by DDC engineers for the duration of the contract.  Those vehicles are registered to the City even though they are owned by the contractors. All expenses related to those vehicles (including insurance, parking, repair, gas, and maintenance) are considered contractor expenses. In Fiscal Year 2006, contractors provided DDC a total of 107 vehicles, which cost approximately $1.4 million, an average of $1,100 per vehicle per month.

Audit Findings and Conclusions

               While DDC has established some controls over the use and assignment of contractor-provided vehicles (including maintaining assignment forms on file, using trip logs to record how vehicles are used, and instituting procedures for assigning vehicles), we believe that DDC controls over contractor-provided vehicles are inadequate.  Specifically, six of the 154 DDC drivers we reviewed drove contractor-provided vehicles while having suspended drivers licenses or privileges.  In addition, DDC could not provide evidence that one employee, who drove a contractor-provided vehicle on five separate days during Fiscal Year 2006, had a driver’s license.  New York State DMV records contained a non-driver ID only for this driver.

Our review of DDC files for the 154 drivers also revealed that the agency did not have a copy of current licenses for 25 of the 154 drivers.  For 20 of the drivers there was a copy of an expired license on file, and for the other 5 drivers (including the one for whom we could find only a New York State non-driver ID) there was no copy of a license on file. 

In addition, contractor-provided vehicles assigned to the Technical Support Division were used primarily for commuting rather than work-related purposes.  For six of the eight contractor-provided vehicles assigned to the Technical Support Division during Fiscal Year 2006, the percentage of days that they were used exclusively for commuting ranged from 67 percent to 98 percent.

Four (13%) of the 32 engineers in our sample of drivers kept their vehicles at home for a week or more while they were on vacation, making these vehicles unavailable for use by other engineers in the division.  DDC also failed to ensure that accurate records were maintained detailing how contractor-provided vehicles assigned to the Infrastructure Division were used and drivers did not complete their trip logs in accordance with DDC procedures. 

Audit Recommendations

Based on our findings, we make eight recommendations, including those listed below. DDC should:

• Update and review its manual files to ensure that all DDC drivers have valid and up-to-date driver’s licenses.

• Follow up more effectively upon notification by DMV that employee licenses have been revoked or suspended and take appropriate action—either by having those employees correct their license status or by suspending the employees’ driving privileges.

• Better utilize the contractor-provided vehicles assigned to Technical Support.

• DDC should establish a written policy that clearly incorporates procedures for assigned vehicles when an engineer is planning to be away for a week or more and distribute this policy to all drivers.
  
  
• Require that Infrastructure Division drivers complete the trip logs as required.

.Agency Response

               DDC generally agreed with the audit’s findings and recommendations.