Fuel Management

Audit: New Orleans Must Improve Fuel Controls

June 30, 2016, by Thi Dao

File photo by Vince Taroc.
File photo by Vince Taroc.

The City of New Orleans needs to improve oversight of its fuel dispensing program, an audit from the city's Office of Inspector General found. The audit found the city could not reliably track fuel use or determine who was using fuel, in what quantities, and for which vehicles because the fuel management system wasn't being used properly.

It recommended that the city reissue fuel cards and PINs, develop an effective way to inventory and deactivate cards and PINs, require drivers to enter accurate odometer readings when fueling, and train vehicle coordinators to identify and investigate suspicious fuel transactions.

The city spent approximately $3.2 million on more than 1.6 million gallons of fuel in 2015. This fuel was used by 33 departments and agencies and dispensed in four main fueling facilities and 12 smaller sites with no electronic monitoring devices. Emergency responders — including Police — used more than 50% of the total gallons dispensed.

Auditors found that fuel cards, assigned to each vehicle, were being shared among vehicles, and fuel cards were not deactivated when vehicles were removed from service. Vehicle coordinators within user departments did not participate in attempts to identify cards that needed to be deactivated. Sharing fuel cards and failing to deactivate fuel cards prevented the city from identifying suspicious transactions and monitor vehicle performance, the Inspector General’s report stated.

While cards identify the vehicle, PINs identify the driver obtaining the fuel, which allows monitoring of individual fuel use when vehicles are shared across multiple users. Fuel users broke policy by sharing PINs, with some departments using one PIN for all its drivers. Oftentimes, PINs were also written on fuel card envelopes stored in shared vehicles, and PINs were also seen written on a sign attached to the fuel terminal. The city did not have a process to identify and deactivate PINs of users who were no longer employed there.

Drivers often input incorrect odometer readings into the system, preventing the city from getting accurate fleet data. Evaluators found that almost 28% of Police Department fuel transactions in 2015 had improbable odometer readings.

Fuel coordinators within user departments did not review reports sufficient to identify suspicious transactions, prompting auditors to call for training.

Auditors also found that the city did not effectively monitor fuel use at its non-automated fueling locations; they recommended the city repair its broken fuel dispensing counters.

In a written response to the audit, Andrew Kopplin, first deputy mayor and chief administrative officer, agreed with all the audit recommendations.

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