Government Fleet Top News

Late Audit Imperils Detroit Fleet

November 18, 2008

DETROIT – If city officials don’t finish an overdue audit in the next two weeks, Detroit may be forced to shut down its entire 5,300-vehicle fleet — everything from police cars and garbage trucks to city buses, according to The Detroit News. If the Michigan secretary of state doesn’t receive an audit of the city’s books by Nov. 30, state officials could forbid the city from self-insuring vehicles. The audit was due in June.

Some officials doubt the city could afford private insurance. Driving without insurance in Michigan is illegal. 

Chief Financial Officer Joe Harris said he’s meeting with Secretary of State officials next week about the issue.

Further delays of the audit could lower Detroit’s bond rating, costing $100 million in part because of higher interest rates. Already, the Michigan Department of Treasury last month froze another $33.4 million in city revenue sharing because of the audit.

Councilwoman Sheila Cockrel, who heads the council’s finance committee, has said she doesn’t believe the audit will be done by the end of the month. She also admitted she’s concerned the city may have to pull its fleet, according to The Detroit News.

The City Council approved a $350,000, two-month contract Wednesday to hire an outside auditor, Plante & Moran, to help finish the city’s late audit. The city already has a $2.3 million contract with KPMG to do the yearly audit and a separate audit of grant spending.

Detroit also has an $875,000 contract with Randy Lane, a certified public accountant, to assist the city in getting records to KPMG.

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