Fuel Management

Long Beach, Calif., Audit Finds City Needs to Update Fuel Management System

July 15, 2013

The City of Long Beach, Calif.’s office of the City auditor, Laura Doud, conducted an audit of the City’s fuel system and controls for managing the disbursement of fuel. City management agreed with the audit’s findings and plans to upgrade the City’s fuel management system, which the City began using in 1997.

Doud’s office found that the City purchased 1.8 million gallons of fuel for approximately $5 million in 2012. The auditor noted that the City’s Fleet Services Bureau uses fuel keys to control access to the City’s three fueling operations. The system currently allows for multiple fuel key types, for the inconsistent use of key status, and allows employees to bypass parameter controls built into the system, the report stated. The system also lacks adequate reporting capabilities and limited capabilities for reviewing fuel transactions, according to the audit. Beyond the limitations of the system itself, the report noted that Fleet Services doesn't have enough staff to ensure that current fuel system controls are effective.

John Gross, the director of financial management for the City, said his department agrees with the findings and recommendations in the report, noting that although the auditor did not find any losses, the audit does show that budget cuts over the years have weakened the City’s fuel management controls.

Looking ahead, City management plans to conduct a review to find the most effective way to disburse fuel, which is one of the recommendations in the report. Next, management plans to reconcile the existing fuel key inventory, reconcile billing information, establish appropriate system parameters as part of the fuel system upgrade, and develop system reports, also part of the system upgrade.

According to City management’s response included in the audit report, the City has budged for a fuel management system upgrade in fiscal-year 2014.

By Greg Basich

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