Government Fleet Top News

Payment Policy Changed for the Use of a Private Vehicle While on Official Business

August 1, 2007

WILLMAR, MN – Minnesota State Auditor Rebecca Otto said state law prohibits public entities from paying both a vehicle allowance and mileage reimbursement to employees who use private vehicles for work, according to the West Central Tribune. As a result, the City of Willmar, Minn., has changed the policy of making both payments to three department heads that use their private vehicles during official business.

The policy had only been in effect since the first of 2007 after new employee contracts were approved. After the state auditor issued her opinion in March, the city changed its policy, according to City Administrator Michael Schmit.

Schmit said he has always received an allowance of about $250 per month to cover gas and maintenance costs associated with using his vehicle for city business, according to the West Central Tribune.

During the last round of contract talks, department directors who used their own vehicles and were not assigned a city vehicle received allowances for the first time. Those who were required to attend meetings outside city limits on official business would be reimbursed based on mileage driven. Three other department directors are assigned city vehicles.

The auditor said state law provides that public entities may pay either an allowance or mileage. The opinion said the auditor’s office will comment on noncompliance whenever an employer is paying both forms of compensation to an employee for use of a personal vehicle.

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