Audit: City Improved Fleet Replacement Fund

An audit of Killeen, Texas, Fleet Services Department found that the department’s once chronically underfunded vehicle replacement program is now on the road to solvency, and that the city needs to adopt more hybrid and electric vehicles.

According to the 20-page audit report, the city’s gap in funds-needed versus funds-budgeted for annual fleet vehicle replacement has narrowed from about $5 million in FY 2020 to $1.3 million in FY 2022. While the cost of maintenance and repairs has declined, the audit states that the chargeback system for recovering these costs has room for improvement. 

Killeen’s Fleet Services Department currently uses a hybrid system for capturing maintenance costs from its user departments, combining real-time invoicing and annual budgeting. To simplify this process, the city auditor recommended the Fleet Services Department work with the city’s IT Department to consolidate all payments in real time, in which cost data would be provided to user departments for the full services rendered, both parts and labor. The fleet team manages about 1,000 vehicles and other rolling stock with a combined replacement value of around $80 million, according to the audit report.

In addition to improving the city's chargeback system, the city auditor recommended the Fleet Services Department develop a pilot project for the inclusion of alternative-fuel vehicles.

While Texas does not currently mandate the adoption of alternative-fuel technology for local government fleets, Killeen's Fleet Services and Finance departments have conducted informal discussions and preliminary research on the use of hybrid and electric vehicles. However, no formal steps have taken place at this time.