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Accept the internal control review of Fleet Management’s operations
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The Auditor-Controller’s Office (ACO) recommends the Board of Supervisors accept the internal control review of Fleet Management’s operations.
SUMMARY:
In accordance with the ACO Internal Audit Division’s FY 2025/26 Audit Plan, the ACO completed the internal control review of Fleet Management’s operations (Fleet). The review was conducted in conformance with the Global Internal Audit Standards as developed by the Institute of Internal Auditors.
The objective of the review was to determine if the internal controls for Fleet are adequate to maintain compliance with applicable federal and state laws and regulations and county policies. Based on a project risk assessment, the ACO focused the review on Fleet’s internal controls for equipment maintenance and repair, and acquisitions and disposals.
Fleet is one of seven divisions under the Department of General Services. Fleet is responsible for the following services: monthly and daily rental vehicles, equipment maintenance and repair, management of fuel sites, and acquisition and disposal of vehicles and equipment.
The review identified four opportunities for improvement with documenting policies and procedures, addressing vehicle recalls, controlling supply inventory, and reports of vehicle maintenance. Fleet agrees with the review results and either has taken or plans to take corrective actions.
In any system of internal controls inherent limitations exist which may result in errors or irregularities occurring and not being detected. Limitations may include, but are not limited to, resource constraints, management override, and circumvention of internal controls by collusion. Accordingly, the review would not necessarily identify and disclose all weaknesses.
FINANCIAL IMPACT:
The acceptance of the report has no financial impact.
DISCUSSION:
The ACO collected information about Fleet through interviews with staff from the Department of General Services, a tour of Fleet’s facility, physical observation and review of records. During the review, ACO tested controls for risks in the following five areas: (1) disposal of hazardous waste, (2) accurate allocation of Fleet costs, (3) timely preventative maintenance, (4) inventory control for maintenance supplies, (5) repair of recalled vehicles.
The review identified that aside from an overarching need for policies and procedures Fleet had adequate controls for the disposal of hazardous wastes and the accurate allocation of Fleet costs to other departments.
The review identified the following four opportunities for improvement:
1. Fleet did not have formally documented policies and procedures. Without written policies and procedures there are increased risks to operation such as inconsistent performance and difficulty in training staff.
2. There was not a consistent process to ensure all vehicles brought in for service were checked for open recalls. As a result, 13 out of 50 vehicles reviewed had outstanding manufacturer recalls.
3. Controls over supply inventory needed improvement. Fleet can improve use of the Fleet Management Information System (AssetWorks), improve organization of the stockroom, and conduct regularly recurring inventory of supplies.
4. Reports obtained from AssetWorks on different dates had inconsistent information regarding the timing of routine vehicle maintenance. The report inconsistency prevented auditors from determining if vehicles were serviced timely.
ALTERNATIVES:
The Board of Supervisors could elect not to accept the report.
This alternative is not consistent with sound public policy and is therefore not recommended.
OTHER AGENCY INVOLVEMENT:
The Department of General Services has reviewed and accepted the report.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION