HIGHLIGHTS Fleet Billing Process

T. Bert Fletcher, CPA, CGMA

City Auditor

HIGHLIGHTS

Highlights of City Auditor Report #1418, a report to the

City Commission and City management

June 5, 2014

Fleet Billing Process

Overall, we concluded the Fleet billing process

accurately charges City departments for the services

received from Fleet. Areas were identified where

enhancements would improve that process. Those

areas related to internal controls, yearend financial

adjustments, the FASTER System, and reporting of

performance measures. Recommendations were

made to address those areas.

WHY THIS AUDIT WAS DONE

This audit was conducted to evaluate the billing process

for the City’s Fleet Division (Fleet). Specifically, our

objective was to answer the following questions: (1) are

internal controls relating to the Fleet billing process

adequate to reasonably assure the process is functioning

as intended; (2) are work orders accurate, reasonable,

complete, and supported; (3) are the parts markup and

labor rates charged by Fleet reasonable and supported;

and (4) does the interface between the Fleet FASTER

System and the City’s PeopleSoft Financials System

(PeopleSoft) correctly transfer information needed to

ensure City departments are accurately and properly

charged for Fleet services.

The scope of the audit included a review of Fleet repair

and maintenance work orders, certain operational

processes related to repairs and maintenance of City

equipment, and aspects of financial activities related to

charging City departments for Fleet services. The audit

covered the period from October 1, 2010, to January 31,

2014.

WHAT WE RECOMMENDED

As part of this audit we made several recommendations to

improve the billing process for Fleet. The more

significant recommendations relate to (1) updating

operating procedures in the areas of equipment intake,

garage operations, the parts section, and the monthly

closeout process; (2) reemphasizing the importance of

correct and accurate work order completion by mechanics

and corresponding reviews by supervisors; (3) increasing

the role of staff external to the parts section in all aspects

of the periodic physical counts of parts; (4) conducting a

formal rate study to determine appropriate labor and parts

rates and markup; and (5) reconsidering the disposition of

surpluses generated from Fleet repair and maintenance

services.

To view the full report, go to

http://www.talgov.com/auditing/auditreports.cfm

For more information, contact us by e-mail at

[email protected] or by telephone at 850/891-8397.

WHAT WE CONCLUDED

The City’s Fleet Division operates as an internal service

fund and bills City user departments for vehicle repair,

maintenance, and other services. We found the Fleet

billing process accurately charges City departments for

those services. In fiscal year 2013, the Fleet Division

generated almost $14 million in revenues and a yearend

surplus of almost $450,000.

Areas identified where improvements should be made

included:

 Complete the update of operating procedures for

equipment intake, garage operations, parts section, and

the monthly closeout process.

 Reemphasize the importance of correct and accurate

work order completion by mechanics and

corresponding reviews by shop supervisors.

 Increase the role of staff independent of the inventory

process in the periodic physical counts of parts

inventory as well as the related reconciliation and

update of parts inventory records.

 Conduct a formal rate study to determine appropriate

rates to charge for labor and parts.

 Consider changes to the method of disposing of

surpluses (or deficits) generated from Fleet operations.

 Establish a procedure to ensure FASTER is timely

updated to reflect cost center changes in PeopleSoft.

 Include purchase numbers from FASTER with the data

transferred to PeopleSoft as part of the purchasing

interface.

 Remove or reclassify certain equipment in FASTER so

as to properly reflect only equipment maintained by

Fleet.

 Review performance measure data to ensure accuracy

of the measures included in the annual budget.

__________________________________Office of the City Auditor

Audit

Report

T. Bert Fletcher, CPA,CGMA

City Auditor

Audit of Fleet Billing Process

Report #1418 June 5, 2014

1

Executive Summary

The purpose of this audit was to evaluate the

billing process for the City’s Fleet Division

(Fleet). Specifically, our objectives were to

answer the following questions:

Are internal controls relating to Fleet billing

adequate to reasonably assure that processes

are functioning as intended?

Are work orders (on which Fleet billings are

based) accurate, reasonable, complete, and

supported?

Are the parts mark-up and labor rates

charged by Fleet reasonable and supported?

Does the interface between the Fleet

FASTER System (software application used

to manage and account for Fleet operations)

and the City’s PeopleSoft Financials System

(City’s accounting system) correctly

transfer information needed to ensure City

departments are accurately and properly

charged for Fleet services.

The scope of our audit included a review of

Fleet repair and maintenance work orders,

certain operational processes related to repair

and maintenance of City equipment, and

aspects of financial activities related to

charging City departments for Fleet services.

Our audit covered the period from October 1,

2010, to January 31, 2014.

Fleet fueling and motor pool operations, as well

as vehicle acquisition services, were

specifically excluded from this audit.

Overall, we concluded the Fleet billing process

accurately charges City departments for vehicle

repair and maintenance services received from

Fleet, and internal controls relating to the Fleet

billing process are adequate to provide

reasonable assurance the Fleet billing process is

working as intended.

In the course of the audit we identified three

areas (internal controls, yearend adjustments,

and FASTER) where changes to processes

should be made to enhance the Fleet billing

process. Additionally, we identified one area

where changes should be made to improve the

reporting of Fleet performance measures.

Internal controls – Within the area of internal

controls we determined:

1. Operating procedures in the areas of

equipment intake, garage operations, parts

section, and the monthly closeout process

were generally adequate. However, we

identified several areas that should be

updated to reflect current processes and

procedures. Fleet management indicated

they were aware of those areas and had

already initiated the process to update the

operating procedures. We recommend

those efforts be competed. (Issue #1)

2. A few errors are occurring within work

orders and are not being detected through

the supervisory review and approval

process. We recommend Fleet management

reemphasize the importance of correct and

Audit Report #1418 Audit of Fleet Billing Process

2

accurate work order completion by

mechanics and corresponding reviews by

supervisors. (Issue #2)

3. Six staff within Fleet had the ability to

reopen (and subsequently reclose)

previously closed work orders. Large

numbers of staff with the ability to reopen

and reclose work orders increases risks

related to fraudulent activities being

concealed within previously closed work

orders. When this was brought to the

attention of Fleet management, the number

of staff with the ability to reopen work

orders was reduced to three employees. We

concur with this Fleet management

corrective action. (Issue #3)

4. Periodic physical counts of parts inventory,

with the results compared/reconciled to the

related inventory records, serve as a critical

control to detect errors and fraudulent

activities. To work properly, those counts

and the related comparison/reconciliation to

inventory records should be observed and/or

conducted and approved by staff

independent of the parts section. While

garage shop mechanics participated in the

periodic counts of the parts inventory, those

counts and the related

comparison/reconciliation to the

corresponding inventory records were

controlled by parts section staff. We

recommend staff independent of the parts

section take a more active role in that

control process. (Fleet has indicated that in

the most recent inventory count, April 2014,

they initiated changes to the inventory

process whereby staff independent of the

parts process are included in all aspects of

the physical count of the parts inventory and

related reconciliation to the inventory

records. We will address this change during

our first follow-up audit). (Issue #4)

Yearend adjustments – As an internal service

fund Fleet should generate little or no profit or

loss from operations. However, based on rates

established for billing purposes, Fleet has

operated at a profit for five of the last six years,

with profits ranging from $30,385 to $674,621.

Within the area of rate establishment and

yearend adjustments we determined:

1. In April 2011 the previous Fleet

management increased the labor rate for

mechanics and the markup for parts and

outsourced services. That increase was not

supported by rate studies to determine the

appropriate labor rate and markup. We

recommend a current rate study be

conducted to establish rates whereby Fleet

will more likely operate with little or no

profit or loss. (Issue #5)

2. Yearend surpluses (profits) from Fleet

garage operations have been transferred to

the City’s vehicle replacement fund. A

more appropriate distribution of those

surpluses would be to return them to City

departments receiving Fleet services in

amounts proportional to services received

during the year. Accordingly, we

recommend management reconsider the

current treatment of Fleet operating

surpluses (or deficits). (Issue #6)

FASTER – Regarding the use of the FASTER

System to manage Fleet garage operations we

determined:

1. Fleet billing information is transferred from

the FASTER System to the PeopleSoft

Financials System through a system

interface. For the system interface to

function properly, City cost center

information must be the same in both

systems. When changes to the cost center

structure were made in the PeopleSoft

Financials System, corresponding changes

were not always timely made within the

Audit of Fleet Billing Process Audit Report #1418

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FASTER System. We recommend Fleet

and the Department of Management and

Administration establish and implement a

procedure to periodically ensure the

FASTER System is timely and properly

updated for cost center changes. (Issue #7)

2. The FASTER System is used for the

purchasing of parts, outsourced services,

and fuel. The purchasing information is

interfaced into the PeopleSoft Financials

System for payment of vendors. We noted

the unique FASTER purchasing number

was not included as part of the interface,

thereby hindering management’s ability to

efficiently trace purchase information from

one system to the other. We recommend

the FASTER purchasing number be

included in the interface between the two

systems. (Issue #8)

3. The FASTER System showed 2,861

vehicles (and equipment) maintained by

Fleet. Our analysis of that data showed 582

of those vehicles (equipment) are

maintained and serviced by other City

departments (StarMetro, City golf courses,

etc.) or represent items (fuel keys) that are

not vehicles or similar equipment. Fleet

management indicated they were already

aware of this issue and planned to remove

from or reclassify those 582 items in the

FASTER system. We recommend those

planned actions be completed. (Issue #9)

As part of this audit, we also examined Fleet

performance measures reported in the City’s

approved FY 2014 budget. We noted some of

those reported measures were not accurate or

reasonable due to errors by Fleet staff when

entering performance information into the

City’s budget application (GOVMAX). To

ensure accurate and proper reporting of

performance measures, we recommend

enhanced reviews of that information after it

has been entered into GOVMAX. (Issue #10)

We would like to thank and acknowledge the

full and complete cooperation and support of

Fleet and Accounting Services during this audit.

Scope, Objectives,

and Methodology

The purpose of this audit was to evaluate the Fleet

billing process. Specifically, our objectives were

to answer the following questions.

1) Are internal controls relating to Fleet billing

adequate to reasonably assure that process

functions as intended?

2) Are work orders (on which Fleet billings are

based) accurate, reasonable, complete, and

supported?

3) Are the parts mark-up and labor rates charged

by Fleet reasonable and supported?

4) Does the interface between the Fleet FASTER

System (software application used to manage

and account for Fleet operations) and the

City’s PeopleSoft Financials System (City

accounting system) correctly transfer

information needed to ensure City

departments are accurately and properly

charged for Fleet services?

The scope of the audit included a review of Fleet

repair and maintenance work orders, certain

operational processes related to repairs and

maintenance of City equipment, and aspects of

financial activities related to charging City

departments for Fleet services. The audit covered

the period from October 1, 2010, to January 31,

2014.

Fleet fueling and motor pool operations were

specifically excluded from this audit, except as

they relate to the annual yearend financial

adjustment (“true-up”) for Fleet garage

operations. The acquisition of new vehicles by

Audit Report #1418 Audit of Fleet Billing Process

4

the City’s Fleet Division was also excluded from

this audit.

To meet the audit objectives identified above we:

Conducted interviews of Fleet and other City

staff.

Observed aspects of Fleet garage, parts, and

administrative operations as they relate to the

billing process.

Reviewed supporting documentation related to

work orders, parts processing, and the

interface of the FASTER system and the

PeopleSoft Financials system.

Selected and tested a random sample of 150

work orders from the audit period.

Obtained, reviewed, and analyzed FASTER

and financial data relating to Fleet garage

operations.

We conducted this audit in accordance with the

International Standards for the Professional

Practice of Internal Auditing and Generally

Accepted Government Auditing Standards. Those

standards require we plan and perform the audit to

obtain sufficient, appropriate evidence to provide

a reasonable basis for our findings and

conclusions based on our audit objectives. We

believe the evidence obtained provides a

reasonable basis for our findings and conclusions

based on our audit objectives.

Background

The City’s Fleet Division (Fleet) provides vehicle

acquisition, maintenance, repair, and fueling

services to City departments. All activities

(maintenance, repair, etc.) other than vehicle

acquisitions are accounted for in the Fleet Garage

Operating Fund. Costs for new vehicles acquired

by the Fleet Division on behalf of City

departments are tracked and accounted for in the

Fleet Vehicle Replacement Reserve Fund. As

previously noted in this report, activity and costs

associated with Fleet’s acquisition of new

vehicles was not addressed by this audit.

Organizationally, Fleet is part of Utility Services

and reports to the Assistant City Manager for

Utility Services. (Note: The term “vehicle” as

used in this report includes cars, trucks, and other

specialty vehicles and equipment such as street

sweepers, trailers, and tractors.)

Fleet as an Internal Service Fund

The Fleet Garage Operating Fund is accounted for

as an internal service fund. Internal service funds

are typically used to account for departments that

provide services to other departments on a cost-

reimbursement basis. Typically, an internal

service fund bills user departments for goods and

services in the course of regular operations; and

amounts billed for those goods (e.g., vehicle parts

and fuel) and services (labor for vehicle repair and

maintenance) should be structured such that the

total amount billed to departments equals the total

cost of delivering those goods and services. In

other words, internal service funds should be

structured such that the applicable functions

operate with little or no profit or loss.

For the past several years the City’s Fleet garage

operation has operated at a profit. The profits

resulted when the amounts Fleet billed City

departments for goods and services exceeded the

cost of providing those goods and services. The

following table shows the financial results of Fleet

garage operations prior to the yearend financial

adjustment (true-up) where any profits or losses of

Fleet are reassigned (e.g., transferred).

Audit of Fleet Billing Process Audit Report #1418

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Table 1

Result of Fleet Garage Operations

Fiscal

Year

Revenues

Profit/(Loss)

Percent

2013

$13,832,745

$447,565

3.2%

2012

12,695,324

496,388

3.9%

2011

11,668,176

674,621

5.8%

2010

11,019,521

30,385

.3%

2009

11,102,572

(1,775)

(.01%)

As can be seen in the above table, the Fleet garage

operation was operating at more or less a

breakeven point for fiscal years 2009 and 2010

but has subsequently operated at a profit for fiscal

years 2011 through 2013. The disposition of year

end balances (i.e., profits) in the Fleet Garage

Operating Fund is discussed in detail within this

report in the section related to the yearend true-up

process.

Organizational and General Information

For financial reporting and cost recovery purposes

in regard to the Garage Operating Fund, Fleet is

organized into the following four areas:

1. Fleet Services – Captures costs associated

with repair and maintenance services

(excluding parts and sublets) for all City

vehicles (with the exception of StarMetro

buses).

2. Fleet Parts – Captures costs associated with

(1) parts placed on City vehicles during repair

and maintenance services, (2) fuel purchased

for City vehicles, and (3) sublets (outsourcing

of repair and maintenance to vendors).

3. Motor Pool – Captures costs associated with

“pool” vehicles made available (rented) to

City departments for authorized City

business/operations.

4. Fleet Administration – Captures costs

associated with management and

administration of the Fleet Division.

Services provided through Fleet Services, Fleet

Parts, and Motor Pool areas are billed to the

applicable benefitting City departments. Costs for

Fleet Administration are proportionately allocated

to applicable City departments separate from the

billing process. In regard to billable activities,

this audit addresses services involving vehicle

repair and maintenance and vehicle parts,

including sublets. The billing of fuel and motor

pool services, as well as the allocation of

administrative costs, were excluded from the

scope of this audit.

Table 2 that follows shows employee staffing for

fiscal year (FY) 2013 within each of the Fleet

financial components.

Table 2

Fleet Division Staffing

Section

Number

Administration

4

Fleet Services

40

Fleet Parts

5

Motor Pool

9

Total

58

Table 3 below shows the respective costs incurred

during FY 2013 within each of the four Fleet

financial components.

Table 3

Fleet Division Costs (FY 13)

Section

Amount

Administration

$1,118,062

Fleet Services

$3,002,061

Fleet Parts

$8,595,838

Motor Pool

$669,220

Total

$13,385,181

Table 4 that follows shows the number of City

vehicles (and equipment) tracked and maintained

by Fleet.

Audit Report #1418 Audit of Fleet Billing Process

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Table 4

Vehicles Maintained by Fleet

Department

Number

of

Vehicles

City Attorney

1

City Treasurer-Clerk

4

City Auditor

1

Executive Services

8

Fire

152

Police

519

Public Works

402

Parks and Recreation

201

Planning

1

Economic and Community

Development

13

Aviation

45

StarMetro

14

Electric Utility

358

Growth Management

29

Solid Waste

79

Utility Business and Customer

Services

322

Communications

1

Department of Management and

Administration

38

Energy Services

17

Fleet Management

138

Underground Utilities

479

Emergency Management

3

Environmental Policy and Energy

Resources

4

Other

32

Total

2,861

Source: FASTER as of 3/14/2014

FASTER Application

The City uses the FASTER application to manage

operations and vehicles maintained by Fleet.

FASTER is used to manage and/or track:

Vehicle activity and history from acquisition

to disposal.

Parts acquisition, inventory, and issuance for

installation on vehicles.

Vehicle repair and maintenance

activities/services performed within the Fleet

garages/shops.

Consolidation and transfer of data relating to

charges for vehicle repair and maintenance

services, fuel usage, and motor pool usage.

Billing Process

City departments are billed for parts and repair

and maintenance services through a “work order”

process. Specifically, a unique FASTER work

order is created each time a City vehicle is

brought to Fleet for services. All activities

relating to repair, maintenance, and parts are

recorded and tracked through the work order

established for the vehicle for that particular

service. Costs associated with those activities as

reflected on the work order are subsequently

billed to the applicable City department to which

the vehicle is assigned. For recent fiscal years,

Fleet processed approximately 11,500 work

orders annually.

For the areas included in the scope of this audit

(vehicle repair and maintenance, vehicle parts,

and sublets) there are three primary billable

activities:

Labor – The time (labor) spent by mechanics

on vehicle maintenance and repair activities is

accounted for within Fleet garage operations.

Specifically, Fleet mechanics track and record

their time on FASTER work orders using

work codes (known as RTYs). For each

particular service/job performed on a vehicle,

the mechanic opens an appropriate RTY code

in FASTER on the established work order

when the work starts and then closes that RTY

code when the applicable service/job is

completed. As several specific services/jobs

may be performed on a vehicle during the

repair and maintenance activity, there may be

multiple RTY codes for a single work order.

FASTER calculates the time between the

opening and closing of each RTY code as the

Audit of Fleet Billing Process Audit Report #1418

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amount of mechanic labor time that will be

charged to the work order. The sum of all

labor time charged to each RTY code is the

total labor charged to a work order. The

standard billing rate charged for mechanics’

labor is $59.50 per hour.

Parts - When a specific part is needed to

complete a repair/maintenance job, the

mechanic within the garage/shop section

requests the part from the Fleet parts section, a

separate unit within Fleet. Based on the

mechanic’s request, a parts specialist obtains

the part from inventory and assigns the part, in

FASTER, directly to the work order

established for the repair/service work being

performed. The part is provided to the

mechanic for installation on the applicable

vehicle. This process is intended to ensure all

parts removed from inventory are assigned to

a work order and billed to a City department.

The standard mark-up rate for parts issued by

the parts sections is 25% (i.e., the amount

charged to the applicable City department is

the cost of the part increased by 25%). The

intent of the 25% mark-up is to recover

overhead costs (e.g., salaries of parts

specialist, supplies, etc.) within the parts

section.

Sublets – In some circumstances it is

appropriate to outsource maintenance or repair

work because the work can be done more

efficiently by a vendor and/or because Fleet

mechanics do not have the expertise to work

on the applicable vehicle (equipment). One

example is repair work on booms placed on

certain electric utility trucks. The term used to

describe outsourced repair and maintenance

work is “sublet.” As with repair and

maintenance work performed by Fleet

mechanics, the sublets are charged through the

FASTER work order process. The amounts

charged are the actual cost (fee charged by

vendor) increased by a 25% mark-up. Similar

to parts, the mark-up is intended to recover

overhead costs.

For purposes of this audit, we categorized the

billing process into the four following

components:

Vehicle Intake – This component relates to the

identification of the need for a repair and/or

maintenance service. Generally, either a vehicle

operator reports something not functioning

properly or, based on information recorded in

FASTER (e.g., maintenance schedules), the

vehicle is brought to Fleet for periodic

preventative maintenance services. When the

vehicle is brought to Fleet, the Fleet customer

service section obtains applicable information

about the vehicle and creates a FASTER work

order. The vehicle is assigned to the appropriate

shop within the garage section. There are

multiple shops, with each shop designated to

perform specific types of work (e.g., heavy duty,

light duty, police cars).

Garage Operations – This component relates to

the actual physical performance of the repair or

maintenance activities by mechanics. After the

work order has been created and assigned to the

appropriate shop through the vehicle intake

process, the supervisor of the shop reviews the

work order and assigns the work to a mechanic, or

to the appropriate vendor if the work is not to be

performed internally by Fleet mechanics. If the

work is performed internally, the assigned

mechanic performs the actual repair and/or

maintenance tasks and records the applicable

information through the FASTER work order

process (e.g., RTY codes, start and stop times).

Upon completion of the work, the assigned

mechanic notifies the shop supervisor. The shop

supervisor reviews the vehicle and work order to

ensure the work was appropriate and complete. In

the event the work was outsourced to a vendor

(sublet), the shop supervisor reviews the returned

vehicle, FASTER work order, and vendor invoice

Audit Report #1418 Audit of Fleet Billing Process

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for appropriateness, accuracy, and completeness.

If work and related work orders are determined

appropriate and complete, the shop supervisor

closes the work order in FASTER and the

applicable City department is notified the vehicle

is ready to be picked up and returned to service.

Parts – Vehicle and equipment parts (inventory)

are stored in a separate secured room within the

Fleet facility. The parts section maintains an

inventory of over 1,600 different parts and is

responsible for ordering, issuing, accounting for,

and safeguarding those parts. Special or unique

parts not retained in inventory are also acquired,

issued, and accounted for by the parts section.

When a part is needed for a repair or maintenance

job, the assigned mechanic goes to a counter

located between the garage area and parts room

(mechanics do not have unsecured access to the

parts room and inventory) and requests the part.

The mechanic notifies the parts staff of the

applicable work order and the parts staff that

obtains and issues the part to the mechanic then

records the parts issuance on that work order

through FASTER. All parts issued by the parts

section should be placed on a work order.

Monthly Closeout – Within five days of the end of

each month, garage and parts issuance monthly

activity recorded in FASTER is closed out,

processed, and transferred to the PeopleSoft

Financials System through a systems interface.

That process is mostly automated but does require

some manual steps by staff in both Fleet and

Accounting Services. One result of the closeout

process is the recording of journal entries in the

City’s accounting system that, in essence, charges

those departments for the Fleet services and

transfers funds from the applicable departmental

funds to the Fleet Garage Operating Fund as

payment for those services.

Diagram 1 below shows the flow of Fleet

operations; beginning with the intake of the

equipment into Fleet, to the garage

maintenance/repair activities, to the issuance of

parts, and ultimately to the monthly closeout

where the FASTER work order information is

summarized and transferred to PeopleSoft.

Diagram 1

Flow of Operations

Internal Controls for Fleet Billing

Internal controls are a key part of any business

process and are intended to ensure the process is

functioning as intended.

We reviewed the internal controls within each of

the four areas of the billing process as defined in

the background section of this report (vehicle

intake, garage operations, parts, and monthly

closeout). Our review of those billing process

areas showed there were adequate controls in

place to provide reasonable assurance the billing

process is functioning such that maintenance and

repair activities (including parts issuances and

sublets) of Fleet are being charged to the City

departments in an accurate, equitable, and proper

manner based on their usage of Fleet services.

We did, however, note some areas where internal

controls could be strengthened. Those areas

related to operating procedures, supervisory

review of work orders, reopening closed work

orders, and independent oversight of the physical

count of parts inventory.

Operating Procedures (Issue #1)

Documented operating procedures help ensure

consistency of operations and compliance with

Garage Operations

Equipment Intake

Parts Section

Monthly Closeout

Audit of Fleet Billing Process Audit Report #1418

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established business rules; and serve as a

reference when needed, such as for new staff.

During our review we noted documented

operating procedures were generally adequate,

complete, and placed into operation. However,

areas were identified where improvements and

enhancements should be considered. Those areas

are described in Table 5 below.

Table 5

Documented Procedures

Billing

Process

Area

Areas for Improvement

Equipment

Intake

Documented procedures for customer service section employees to follow for the vehicle

intake process are generally adequate. Those procedures describe the process and actions to

be taken for vehicles brought to Fleet for repair and maintenance services. However, those

procedures incorrectly (1) indicate customer service section employees will administer the

sublet process regarding receiving and processing vendor invoices after the related work is

done and approved by the applicable shop supervisors (that administrative work is instead

performed by parts section employees) and (2) reflect a version of FASTER (e.g., screenshot

examples) that has been subsequently replaced and updated.

Garage

Operations

Documented procedures for mechanics and supervisors are generally adequate as to the

technical aspects of using FASTER, such as opening and closing RTYs on work orders.

However, those procedures do not address the specific responsibilities and expectations for

mechanics and shop supervisors. Accordingly, the procedures should be enhanced to specify

the tasks mechanics should follow, including when to record the start and stop times for an

RTY, the process for requesting parts from the parts section, the process for notifying shop

supervisors when work is completed and ready for review, etc. Similarly, the procedures for

shop supervisors should be enhanced as to the process for assigning work to mechanics,

reviewing and correcting (as needed) work orders, and closing work orders after approval.

Parts

Section

Detailed documented procedures for the parts section have been established. However, some

of those procedures should be updated to reflect current processes and procedures and to

replace employee names with employee positions. Examples where those procedures are not

current include (1) outdated listing of parts contracts and (2) inappropriate dates for

conducting inventory counts (specified dates that were several years ago). In some areas

those procedures should be enhanced to provide more detailed instruction, such as (1) the

process for sublets and (2) the processes for conducting periodic physical inventory counts,

including staff that should conduct those counts and reconcile the count results to the

FASTER inventory records.

Monthly

Closeout

Documented procedures were established for the monthly closeout process. Those procedures

specify in detail the steps to be taken to close out a month’s activities within the FASTER

System and to generate a computer file for transferring the monthly information into the

PeopleSoft Financials System. However, those procedures should be enhanced to specify the

staff positions responsible for the process and the dates/times of the month the process should

be initiated and completed.

Audit Report #1418 Audit of Fleet Billing Process

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In summary, documented procedures have been

established for key areas pertaining to the Fleet

billing process. However, areas were identified

where improvements and enhancement should be

made. In response to our inquiry on this matter,

Fleet management stated they were aware of these

circumstances and indicated a process to update

and improve the current documented procedures

had been initiated. We recommend Fleet

complete the revisions and updates to the

documented procedures for the noted areas.

Supervisory Review of Work Orders (Issue

#2)

As part of our testing of the Fleet billing process

we selected a random sample of 150 work orders

for examination from a population of 38,724 work

orders that were completed by Fleet during the

period October 1, 2010, to January 31, 2014. Our

review consisted of:

Examining the work orders for logic,

reasonableness, and consistency as to RTY

codes, parts applied, and mechanic/supervisor

note descriptions.

Recalculating the labor charges and markup

applied to parts and sublets for consistency

and accuracy.

Reviewing mechanic time charged to work

orders for reasonableness.

Tracing parts not normally maintained in

inventory and sublet charges to supporting

purchase documentation.

For sampled work orders with part charges

exceeding $200 (32 work orders), observed

the applicable vehicles and, with assistance of

City staff to whom the vehicle was assigned,

verified the installation of the applicable parts.

For the most part, our review showed the work

orders were logical, reasonable, and consistently

prepared and completed. Labor charges and the

markup applied to parts and sublets were

accurately and correctly calculated. Mechanic

time charged to each task was generally

reasonable, and applied parts and sublets were

reasonable and supported by appropriate

documentation.

In the course of our review, we noted only three

instances where work order charges were not

correct or accurate. Specifically:

In two instances, the applicable mechanics did

not open applicable RTY codes for the work

performed until the physical

repair/maintenance was completed. At the

completion of the physical repair/maintenance

the applicable RTY codes were opened and

then immediately closed. As a result the work

orders (and FASTER) do not accurately

reflect the amount of work time actually

devoted to the repair/maintenance. That, in

turn, resulted in the labor cost for both work

orders being understated. In the first instance

there was a $2.62 labor charge to the work

order while the estimate for labor cost for that

specific repair/maintenance is $60-90. In the

second instance there was a $0.40 labor

charge to the work order while the estimate

for labor cost for the specific maintenance is

$60.

In one instance, the applicable mechanic

completed two different repair/maintenance

tasks (hydraulic leak repair and air leak repair)

on a vehicle. The mechanic however, opened

a RTY code for only one of the two tasks on

the work order, and closed that RTY code

after both tasks were physically completed. A

RTY code for the other task was not opened

and closed until the physical

repair/maintenance work for both tasks was

completed. As a result, although total labor

charges of $146.39 were correct, the work

order did not reflect the accurate time and cost

for each respective task (time for one task was

Audit of Fleet Billing Process Audit Report #1418

11

overstated by the amount of time spent

completing the second task, and the time for

the second task was understated as the only

recorded time was the initial opening and

almost simultaneous closing of the applicable

RTY code).

While the overall test results indicate there are no

material errors in regard to accuracy and

correctness of work orders and related billings,

the above described instances do indicate the need

for enhanced reviews of work orders by shop

supervisors. We recommend Fleet management

reemphasize the importance of correct and

accurate work order completion by mechanics and

corresponding reviews by shop supervisors.

Reopening Closed Work Orders (Issue #3)

One specific area reviewed in this audit was the

process of reopening closed work orders.

Previously closed work orders may be reopened

for the purposes of correcting errors, updating

recorded information, and adding information

and/or charges when appropriate. An example

may be when a special part has been ordered,

received, and installed on a vehicle and the

applicable work order closed prior to the receipt

of the vendor invoice for that special part. After

the invoice is received, the work order is reopened

so the cost (and markup) can be added to the work

order.

Notwithstanding there are legitimate and

appropriate reasons to reopen a previously closed

work order, the ability to perform that function

should be restricted to appropriate personnel.

Specifically, staff that can reopen a previously

closed work order, and subsequently reclose the

work order, should not have unsecured access to

vehicle parts. Specifically, if an employee with

unsecured access to parts also has the ability to

reopen a closed work order and subsequently

reclose that work order, and that staff fraudulently

takes a part for unauthorized uses, that fraudulent

act could be more easily concealed through the

inappropriate reopening and reclosing of a

previously closed work order.

As part of this audit, we determined as of March

7, 2014, that six staff had the ability through

FASTER permissions to reopen a previously

closed work order. Each of those six staff also

had the ability to reclose that work order without

independent review by another staff. In addition,

we noted two of those staff (both managers) also

had access to parts inventory. From January 1,

2005, through March 7, 2014, 1,879 work orders

were reopened by nine different employees within

Fleet. Upon bringing this to the attention of Fleet

management during this audit, prompt action was

taken and staff with the ability to reopen work

orders was reduced appropriately to three

employees within the Fleet Administrative

Division. Those three employees do not have

access to parts inventory. We concur with these

actions taken by Fleet management to enhance

controls over work orders.

Independent Oversight of Physical Count

of Parts Inventory (Issue #4)

As stated in the background section of this report,

the Fleet parts section maintains an inventory of

over 1,600 different parts. The value of that parts

inventory as of September 30, 2013, was

approximately $2.38 million. Overall, our review

showed that adequate and appropriate controls

were established for ordering, purchasing,

receiving, storing, accounting for, and securing

parts. However, as described in the following

paragraphs, we noted one area where controls

should be enhanced.

In regard to parts inventory, one critical control

that should be in place is periodic physical counts

of the parts and comparison of the count results to

the quantities recorded in the parts inventory

records. Such counts and comparisons serve two

purposes. First, they serve to ensure accuracy and

Audit Report #1418 Audit of Fleet Billing Process

12

correctness of the recorded inventory records

through either validation of the recorded

quantities or detection and correction of errors in

recorded quantities. Second, if the counts are

performed by staff independent of the parts

function, they serve to help detect unauthorized

diversions of parts (fraud). For example, if a staff

with access to the parts inventory were to

inappropriately divert parts for unauthorized

purposes, a count and related comparison to the

inventory records by staff independent of the parts

function may detect that diversion.

We noted that, in accordance with good internal

control and business practices, Fleet does conduct

periodic physical counts and compare the results

to the inventory records. Specifically, physical

counts are conducted quarterly for a random

sample of parts and the results

compared/reconciled to the FASTER parts

inventory records. Those quarterly counts and

related comparison/reconciliations are performed

by parts section staff. Additionally, an annual

physical count is performed for all parts and the

results compared/reconciled to the FASTER parts

inventory records. The annual count is performed

by parts section staff with assistance from garage

shop mechanics. The comparison and

reconciliation of the annual count to the inventory

records are controlled/performed by parts section

staff.

These counts and comparisons/reconciliations

serve to detect errors. However, because the

counts and related comparisons/reconciliations to

the inventory records are performed and/or

controlled by parts section staff, they are not

adequate to provide likely detection of

unauthorized diversions of parts for fraudulent

purposes by parts section staff. As stated above,

to help ensure timely detection of fraudulent

diversion of parts by staff with access to parts,

good internal control practices provide that

physical counts and related

comparisons/reconciliation to the inventory

records be observed and/or performed by staff

independent of the parts function.

The lack of independent physical inventory counts

and related comparisons/reconciliations was one

of several factors that contributed to the City not

timely detecting a significant unauthorized

diversion of Fleet parts more than a decade ago.

(See Audit Report #0303 “Fleet Parts

Operations,” issued December 10, 2002.) To help

reduce the likelihood of another instance of

unauthorized diversion of Fleet parts, we

recommend staff external to the parts section (1)

conduct or observe the annual physical count and

(2) participate in or review and approve the

related comparison and reconciliation of the count

results to the FASTER inventory records. (Fleet

has indicated that during the most recent

inventory count, April 2014, staff independent of

the parts inventory process was involved in all

aspects of the physical count and the

reconciliation/update of FASTER inventory

records. We commend Fleet for quickly

addressing this issue and will verify these changes

during our first follow-up).

Yearend Adjustments-Fleet Billing

For the last six fiscal years, Fleet generated annual

revenues ranging from $11 million to $13.8

million and expenses ranging from $10.9 million

to $13.4 million. The majority of revenues

resulted from charges for services billed to City

departments receiving Fleet services.

At the end of each City fiscal year the Accounting

Services Section of the Department of

Management and Administration analyzes

financial activity (revenues and expenses) within

each of the City’s internal service funds, including

the Fleet Garage Operating Fund, for the purpose

of determining what, if any, yearend billing and

accounting adjustments may be appropriate.

Yearend adjustments are generally recommended

Audit of Fleet Billing Process Audit Report #1418

13

in those instances where a City activity, accounted

for through an internal service fund, generates

more than a marginal “profit” or “loss.” As

previously noted in the background section of this

report, activities accounted for through the Fleet

Garage Operating Fund should operate with little

(marginal) or no profit or loss, as the amounts

charged City departments for services are

intended to recover the cost of rendering services

and not to generate a profit. The yearend analysis

and adjustment process, performed for most City

internal service funds, is known as the yearend

“true-up” process.

In connection with this audit, we reviewed

financial activity within the Fleet Garage

Operating Fund for the last six fiscal years. As

shown below in Table 6, our analysis showed that,

before the yearend adjustments resulting from the

annual true-up process, Fleet activities generated

more than a marginal profit in four of those six

years.

Table 6

Fleet Revenues and Expenses

Fiscal Year

Revenues

Expenses

Net Income

Percentage Net

Income to

Revenues

2008

$13,580,931

$13,298,092

$282,839

2.08%

2009

11,102,572

11,104,347

(1,775)

(.01%)

2010

11,019,521

10,989,136

30,385

.28%

2011

11,668,176

10,993,555

674,621

5.78%

2012

12,695,324

12,198,937

496,387

3.91%

2013

13,832,745

13,385,181

447,564

3.24%

Totals

$73,899,269

$71,969,248

$1,930,021

2.61%

Establishing Billing Rates (Issue #5)

As previously explained within the background

section of this report, City departments are

charged for Fleet activities for the following

services:

Mechanic labor for garage repair and

maintenance services (current rate of $59.50

per hour).

Parts (cost plus a markup of 25%)

Sublets (cost plus a markup of 25%)

In addition, City departments are charged for fuel

consumption based on quantities of fuel dispensed

through City fueling stations (cost plus a markup

of 10%).

In accordance with the concepts explained

previously in this report, rates for those services

should be established with the intent of recovering

the costs of providing the respective services,

without generating more than a marginal profit or

loss.

We noted Fleet management has not conducted a

formal rate study in recent years to ascertain the

appropriate rates to charge for services (current

City staff did not know the last time a formal rate

study was conducted). The current billing rates

described above were determined and initially

applied in April of 2011. Discussions with Fleet

staff indicate the current rates were determined by

previous Fleet management based on informal

estimates of rates needed to recover costs with no

Audit Report #1418 Audit of Fleet Billing Process

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significant profit or loss. However, as noted in

Table 6 above, those current rates have generated

more than a marginal profit in four of the last six

years. Because the profits generated in those

years have not been returned to applicable City

departments in proportion to the services received

(see following report issue), we recommend that a

formal rate study be performed and rates adjusted

accordingly as an effort to reduce profit

generation to no more than a marginal amount.

True-Up - Yearend Adjustments (Issue #6)

The intent of the yearend adjustment (true-up)

process described above is to identify and

appropriately dispose of any significant profit or

loss resulting from internal service fund

operations. The most equitable and appropriate

treatment (disposition) is to distribute the

applicable profit or loss back to the users

(departments receiving services) in amounts

proportional to the services received during the

year. For a simple example, if one City

department was billed 10 percent of the total

services rendered during the year by an internal

serve fund operation (such as the Fleet vehicle

repair and maintenance services), the yearend

true-up process should result in 10 percent of any

generated profit being returned to that department

through a yearend accounting adjustment.

Contrary to that concept, City management has

not returned annual profits generated in the Fleet

Garage Operating Fund back to applicable City

departments based on their respective services

received during the year. Instead, profits

generated as shown in Table 6 above, ranging up

to $674,621 (FY 2011) have been transferred to

the City’s Vehicle Replacement Reserve Fund.

That fund is used by the City for the acquisition of

new vehicles for all City departments. The

primary funding sources for the Vehicle

Replacement Reserve Fund are budgeted transfers

from the City departments for which City vehicles

are purchased for use in the respective

departments’ operations.

While there may be some correlation between (1)

vehicle repair, maintenance and fueling services

and (2) new vehicles acquired for the various City

departments, the correlation is indirect as the

acquisition of new vehicles is not directly and

solely based on or determined by the costs of

vehicle repair/maintenance and fuel.

Accordingly, City management has not

demonstrated that the dispositions of the profits

generated in the Fleet Garage Operating Fund

have been disposed of (used) in the most equitable

and appropriate manner.

We acknowledge that authorization was requested

from and granted by the City Commission for the

transfers (dispositions) of Fleet Garage Operating

Fund profits to the Vehicle Replacement Reserve

Fund in recent years as part of the annual

commission agenda item pertaining to

dispositions of profits and losses for all City

internal service funds. Notwithstanding that

authorization, we recommend City management

reconsider the current accounting treatment of

those dispositions and instead dispose of any

future Fleet profits (or losses) to applicable City

departments in amounts proportional to the

services received during the year.

NOTE: City management acknowledged our

recommendation for this issue but indicated at

this time they intend to continue to transfer any

profit generated through Fleet vehicle repair and

maintenance services to the City’s Vehicle

Replacement Reserve Fund. We acknowledge this

management policy decision. Accordingly, there

is no action step in Appendix A of this report to

address this issue. However, as indicated above,

transferring the profits to the Vehicle

Replacement Reserve Fund is not, from an

accountability perspective, the most equitable

disposition of those profits.

Audit of Fleet Billing Process Audit Report #1418

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FASTER

As noted in the background section of this report,

the Fleet Division uses FASTER to manage the

City’s vehicles and related equipment and to track

billable activities for repair and maintenance,

parts, fuel, and motor pool services. As such, we

reviewed the data within FASTER as it relates to

the Fleet billing process. In the course of that

review, we identified the following issues.

FASTER Interface with General Ledger

(Issue #7)

As part of the monthly closeout process (see page

8 in this report), billing information and activity

recorded in FASTER is processed and transferred

to the PeopleSoft Financials System through a

systems interface. The process is initiated when a

Microsoft Access application extracts relevant

billing information from FASTER and configures

that information and transfers it to Accounting

Services. Accounting Services further configures

the information so that it can be imported

(interfaced) into PeopleSoft Financials (general

ledger) in the form of accounting journal entries.

As described, the process is primarily automated

with some manual steps.

For the interface process to work correctly and

accurately, cost centers in both FASTER and

PeopleSoft Financials must be the same. Changes

to cost centers occur periodically and are

generally made for departmental reorganizations

or other budgetary reasons. Examples of changes

to cost centers include establishing new cost

centers for new functions and eliminating cost

centers when functions are revised, reorganized,

or terminated. For some reorganizational

changes, an existing cost center is retained but

certain activities formerly accounted for in that

cost center are now accounted for in a newly

created (or different) cost center. Accordingly,

when adjustments to cost centers are made in the

PeopleSoft Financials System, the same

adjustment should be made in FASTER. If

corresponding adjustments in FASTER are not

made, the costs of billed Fleet services for

affected cost centers will not be transferred

accurately and correctly.

We noted there are no procedures to ensure cost

center changes made in the PeopleSoft Financials

System are also made in FASTER. We did note

that staff may (and sometimes do) become aware

that such changes were (are) not made to

FASTER (i.e., after changes were made to the

PeopleSoft Financials System) when the

interfaced charges result in charges to a cost

center within the PeopleSoft Financials System

that are in excess of the budget established for

Fleet services in that cost center. However,

reliance cannot be placed on that circumstance to

ensure corresponding changes are made in

FASTER, as inaccurate and incorrect transfers of

charges can still occur even if a cost center budget

is not exceeded. Accordingly, we recommend

that Fleet, in conjunction with the Department of

Management and Administration (DMA),

establish and implement a procedure to

periodically (e.g., monthly) ensure that FASTER

is timely and properly updated for cost center

changes to the PeopleSoft Financials System.

FASTER Purchasing Interface (Issue #8)

In connection with the provision of repair and

maintenance services, parts and sublets are

periodically acquired. The FASTER System is

used by Fleet in that purchase process.

Specifically, a unique purchase number is

generated within FASTER for each authorized

purchase (e.g., similar to a purchase order). The

applicable items (parts or sublets) are then

acquired. The FASTER System is updated to

document receipt of the purchased items and

applicable vendor invoices. Twice each week

(semi-weekly), the information for completed

purchases (i.e., items ordered and received and

Audit Report #1418 Audit of Fleet Billing Process

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vendor invoice also received) recorded in

FASTER is transferred into the PeopleSoft

Financials System through an interface similar,

but different from, the monthly closeout and

billing interface previously described in this

report. The City’s Accounts Payable Section

within the Department of Management and

Administration processes the purchase

information transferred into the PeopleSoft

Financials System from FASTER for the purpose

of generating payment to the vendors. Actual

payments are made by the City Treasurer-Clerk’s

Office.

In the course of our review of FASTER work

orders, we traced the purchase of certain parts

from the sampled work orders to purchase

information recorded in FASTER and to the

payment information reflected in the PeopleSoft

Financials System. The information in the

PeopleSoft Financials System was used to identify

the supporting records (e.g., vendor invoices) in

the City’s electronic document management

system (EDMS). During that testing, we noted

the unique FASTER purchase number assigned to

individual acquisitions was not included in the

purchase information transferred from the

FASTER System through the systems interface

into the PeopleSoft Financials System. Not

including that unique FASTER purchase number

in the PeopleSoft Financials System made it

cumbersome (less efficient) to correlate individual

purchases in the FASTER System to the

corresponding voucher and payment in the

PeopleSoft Financials System. That, in turn,

made it cumbersome to identify the supporting

documentation in EDMS.

To enhance management’s ability to identify,

correlate, and review supporting documentation

for purchases of parts and sublets, we recommend

the purchase interface be revised such that the

unique FASTER purchase number is included in

the information imported into the PeopleSoft

Financials System.

Misclassification of Equipment (Issue #9)

As part of our audit, we reviewed the specific

vehicles (and equipment) accounted for and

tracked in FASTER. As shown in Table 4 within

this report, a total of 2,861 vehicles and

equipment are tracked within FASTER as

maintained by Fleet. Our analysis showed that

582 of those 2,861 items were not, however,

maintained by Fleet. Those items included, for

example, golf carts from the City’s municipal golf

courses that are maintained by staff at the golf

courses. Other examples include StarMetro buses

which are maintained by StarMetro and keys for

the FuelMaster fueling system which are not

vehicles and should be tracked separately. In

response to our inquiry as to why these 582 items

were tracked in FASTER, Fleet management

indicated that over time, vehicles and

miscellaneous equipment acquired by Fleet for

use by (and maintained by) other City

departments has been added to FASTER at the

time of acquisition but never removed from

FASTER when the items were transferred to the

other City departments.

When this issue was brought to their attention,

Fleet management acknowledged the issue and

stated they were aware of the need for FASTER to

be updated to properly reflect only those vehicles

serviced and maintained by Fleet. Additionally,

Fleet management asserted actions had already

begun to improve the classification of data within

FASTER.

To ensure information and reports generated

through FASTER are accurate and properly

interpreted, we recommend that Fleet

management continue the process of removing or

reclassifying applicable vehicles and equipment in

FASTER so as to properly reflect only those

maintained by Fleet.

Audit of Fleet Billing Process Audit Report #1418

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Performance Measures

As part of this audit we reviewed Fleet

performance measures reported in the City’s FY

2014 approved budget. A total of 17 performance

measures were reported in that budget. Measures

reported included items such as the number of

vehicles per mechanic, parts inventory turnover,

and percentage of Fleet maintenance that is

outsourced. Performance measures serve as a

mechanism for evaluating and demonstrating

efficiency, effectiveness, and results (successes

and challenges) in Fleet operations.

Inaccurate Performance Measures (Issue

#10)

Our review showed that six out of the 17

measures reported in the City’s FY 2014 budget

are not accurate or reasonable. In several

instances the reported measures indicated Fleet

exceeded more than 100% of the activity

measured for FY 2013 year to date activity, which

is not logical. Examples are shown in Table 7 that

follows.

Table 7

Performance Measure Errors

Measure Description

Reported

Measure for

FY2013 Year-to-

Date Activity

Percent of fleet available

during scheduled shifts

(industry standard is 95%).

192.9%

Preventative maintenance as a

percentage of total Fleet

maintenance.

101.3%

Percent of mechanics work

time that is billable (industry

standard is 79%).

141%

Percent of maintenance that is

scheduled (industry standard is

70%).

126.2%

We determined the errors occurred due to staff

mistakes while inputting the performance measure

data into GOVMAX (the City system used to

manage the budget process). Specifically,

although staff had properly captured the

performance measure data from the FASTER

system, that staff incorrectly entered the data into

GOVMAX. To help ensure accurate and

meaningful reporting of performance measures,

we recommend actions be taken to ensure Fleet

performance measure data is correctly entered

into GOVMAX. Such actions should include, but

not be limited to, reviewing data in GOVMAX

after it has been entered to ensure Fleet

performance measures are reported correctly and

accurately.

Conclusion

Overall, we concluded the Fleet billing process

accurately charges City departments for services

received from Fleet. We did however identify

areas where enhancements are/were needed to

improve that process. Specifically, in the course

of the audit we noted:

The updating of operating procedures for Fleet

vehicle intake, garage operations, parts

section, and monthly closeout process to better

reflect current operations and to provide more

enhanced procedural instructions should be

completed.

The importance of accurate and correct work

order completion by mechanics and

corresponding reviews by shop supervisors

should be reemphasized.

Fleet management took prompt action in

response to our audit to reduce the number of

employees with the ability to reopen (and

subsequently reclose) work orders.

Staff independent of the parts process should

take a more active role in the conduct of the

Audit Report #1418 Audit of Fleet Billing Process

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periodic physical counts of parts inventory

and the associated comparison/reconciliation

to, and update of, FASTER inventory records.

A formal rate study should be conducted for

mechanic labor rates, as well as the markup

for parts, sublets and fuel. Those rates should

be adjusted accordingly based on the results of

the rate study.

The current method of disposition for Fleet

profits (or losses) should be reconsidered, with

any future profit/losses allocated (e.g.

returned) to applicable City departments

proportional to the services received during

the year.

A process should be developed by DMA and

Fleet to ensure changes to the City’s cost

center structure are timely and properly made

within FASTER.

The FASTER Purchasing interface should be

revised such that the unique FASTER

purchase number is imported into the

PeopleSoft Financials System.

The process of removing or reclassifying

equipment not maintained by Fleet within

FASTER to properly reflect only those items

maintained by Fleet should be completed.

Performance measure data should be reviewed

after it is entered into GOVMAX to ensure the

data was entered correctly.

We would like to thank the staff and management

of Fleet and Accounting Services for their

assistance and cooperation during this audit.

Appointed Official’s Response

I thank the City Auditor’s Office for the detailed

review provided in the audit of the Fleet

Division’s billing process. Staff will review areas

identified in the audit to improve processes and

consider enhancements as recommended. I would

like to also extend my sincere thanks to the

applicable City departments for their full

cooperation and assistance in the audit process.

Audit of Fleet Billing Process Audit Report #1418

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Appendix A – Management Action Plan

Action Steps

Responsible

Employee

Target

Date

A. Objective:

Improve procedures for the vehicle intake, garage operations, parts section, and

monthly closeout.

1) Complete the review and update the procedures for the Fleet

vehicle intake process.

Buddy Driggers

10/31/14

2) Complete the review and update the procedures for the Fleet

garage operations process.

Buddy Driggers

10/31/14

3) Complete the review and update the procedures for the Fleet parts

process.

Michael Jackson

7/31/14

4) Complete the review and update the procedures for the Fleet

monthly closeout process.

Clem Novenario

7/31/14

B. Objective:

Improve the accuracy of work orders.

1) Remind mechanics of the importance of accuracy and

completeness of work orders including the proper use of RTY

codes for work performed.

Buddy Driggers

9/30/14

2) Reemphasize to shop supervisors the critical role they have in the

review and approval process for work orders.

Buddy Driggers

9/30/14

C. Objective:

Improve internal controls related to periodic physical counts of the parts inventory and

related reconciliation to corresponding records.

1) Staff independent of the parts process will oversee or conduct the

periodic physical counts of the parts inventory.

Michael Jackson

9/30/14

2) Staff independent of the parts process will oversee or conduct the

comparison/reconciliation of the physical count to the FASTER

System inventory records.

Michael Jackson

9/30/14

D. Objective:

Improve the financial results of operations of the Fleet internal service fund.

1) A rate study will be conducted for the purpose of establishing a

labor rate for mechanics and a mark-up rate for parts, sublets, and

fuel that are structured to generate minimal profits (surpluses)

and losses (deficits).

Reese Goad

9/30/15

2) The labor rate for mechanics and the mark-up rates for parts,

sublets, and fuel will be adjusted based on the updated rate study.

Fleet Superintendent

9/30/15

3) Additional (subsequent) rate studies will be conducted

periodically (e.g., annually) to ensure labor and mark-up rates

remain appropriate.

Fleet Superintendent

9/30/16

Audit Report #1418 Audit of Fleet Billing Process

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E. Objective:

Improve the interface of FASTER with the PeopleSoft Financials System.

1) Develop a process to ensure changes to cost centers are

communicated to Fleet within the month that the changes occur.

Accounting Services

Manager

9/30/14

2) Make changes to cost centers within FASTER based on the

information received from DMA within the current monthly

billing cycle.

Clem Novenario

10/31/14

3) The purchase number from FASTER will be imported into the

PeopleSoft Financials System as part of the purchasing interface.

Ryan Hurst

12/31/14

F. Objective:

Improve vehicle information within FASTER.

1) The equipment recorded within FASTER will be reviewed for

proper classification as it relates to Fleet operations.

Clem Novenario

7/31/15

2) Equipment not maintained or serviced by Fleet as identified in

step F.1 above will be removed or reclassified within FASTER.

Clem Novenario

9/30/14

G. Objective:

Improve Fleet performance measure reporting within the City’s Annual Budget.

1) Prior to the completion of the budget process, applicable reports

will be generated from GOVMAX and reviewed to ensure

performance measure information will be accurately presented in

the City’s annual budget.

Tonya Driggers

9/30/14

2) Changes to the performance measure data in GOVMAX will be

made as needed based on the review in step G.1 above.

Tonya Driggers

9/30/14

Copies of this audit report #1418 may be obtained from the City Auditor’s website (http://talgov.com/auditing/index.cfm) or via request by

telephone (850 / 891-8397), by FAX (850 / 891-0912), by mail or in person (Office of the City Auditor, 300 S. Adams Street, Mail Box A-

22, Tallahassee, FL 32301-1731), or by e-mail ([email protected]).

Audit conducted by:

Dennis Sutton, CPA, CIA, Sr. IT Auditor

T. Bert Fletcher, CPA, CGMA, City Auditor