Audit Report on the Department of Homeless Services’ Monitoring of Its Employees Who Use E-ZPasses and Parking Permits While Driving City-Owned or Personally-Owned Vehicles on City Business

Audit Report on the Department of Homeless Services’ Monitoring of Its Employees Who Use E-ZPasses and Parking Permits While Driving City-Owned or Personally-Owned Vehicles on City Business

EXECUTIVE SUMMARY

This audit determined whether the New York City Department of Homeless Services (“DHS”) effectively monitors its employees who use City-provided E-ZPasses and parking permits while driving City-owned or personally-owned vehicles on City business in accordance with applicable rules and regulations.

DHS is responsible for providing short-term, emergency shelter for individuals and families who have no other housing options available, and for assisting those residing in shelters to transition into permanent housing.  In Fiscal Year 2014, DHS had 1,859 employees on staff and an operating budget of approximately $1 billion to carry out the agency’s City Charter mandate.  DHS currently has 546 employees who are authorized to use agency E-ZPasses for City business.

Audit Findings and Conclusions

During the audit period, we found that DHS does not effectively monitor the use of E-ZPasses by its authorized drivers in accordance with applicable rules and regulations.  Specifically, we found that DHS did not maintain a log detailing agency E-ZPass usage as required by the City’s and DHS’ policies and procedures.  We also found that several DHS employees appeared to have excessively used their E-ZPasses for non-business purposes.  The auditors found no issues concerning parking permit usage.

Audit Recommendations

To address the findings raised in this audit, we made the following five recommendations:

• DHS should maintain log books detailing E-ZPass usage as required by City rules and regulations.
• DHS should reinforce the policies and procedures detailing E-ZPass usage among employees.
• DHS should limit the personal use of E-ZPass transponders by monitoring usage more closely.
• DHS should monitor and limit the personal use of City vehicles and recoup the full costs of the use of City vehicles for non-business purposes.
• DHS should ensure employees fully reimburse DHS for any personal use of a DHS E-ZPass in a timely fashion.

Agency Response

We received a written response from DHS officials on April 27, 2015.  In their response, DHS officials generally agreed with the audit’s findings and recommendations stating, “we believe that the audit highlights additional measures that DHS can take to improve its internal controls and as such, agrees to implement the audit’s recommendations and adhere to the regulations in the handbook, Reimbursement of E-Z Pass Charges.”  In addition, DHS’ implementation plan states that it will “seek reimbursement from the two cited individuals for excessive wear and tear on a City-owned vehicle.”

We are pleased that DHS has agreed to implement the audit’s recommendations.  However, we disagree with DHS’ contention that its present policies related to E-ZPass use are “sufficient.”  DHS requires that its personnel assigned City-owned vehicles and E-ZPasses to only reconcile monthly E-ZPass statements.  As is discussed in the report, this is not a sufficient control to ensure that City employees adhere to rules and regulations as outlined in the Handbook, Issuance of E-ZPass,that requires that City-sponsored E-ZPasses should only be used when conducting official City business and drivers must keep a log of E-ZPass use.  Our finding that two senior staff members improperly used City-issued E-ZPasses should prompt DHS to re-examine its practices and training and take any additional measures necessary to ensure full agency adherence to City rules.

The full text of the DHS response is included as an addendum to the report.