A recent audit by the City of San Antonio reveals the fire department's fleet "does not have adequate controls over the fuel card program." The audit's objective was to determine whether San Antonio Fire Department (SAFD) fleet maintenance is "operating and managed effectively and efficiently and that performance measures are supported and accurate."
The audit, released in May, determined that fleet maintenance was operating effectively and efficiently. However, the audit concluded that there are "opportunities to strengthen the controls" over the fuel card program and purchasing card (P-card) processes.
About the Audit
The audit scope was October 2019 through August 2021. It included work orders created by SAFD Fleet Maintenance, parts room inventory, fuel card transactions, and P-card purchases. The auditor's office examined SAFD’s standard operating procedures specific to Fleet operations, and reviewed the city’s P-card User Guide. It also interviewed fleet and SAFD fiscal personnel to gain an understanding of fleet operations, including preventive maintenance, performance measures, fuel transactions, and P-card purchases.
No "Adequate Controls" Over the Fuel Card Program
The audit determined that the fleet does not have "adequate controls" over its fuel card program to verify that only business-related transactions occur. It also revealed that P-card purchases lacked proper support documentation and included sales tax paid on purchases.
The city previously contracted with Valero to provide SAFD with fuel cards to be used at Valero service stations throughout the city. Beginning in January 2021, SAFD started contracting with WEX Inc. for its fuel purchases.
In reviewing purchases from both contracts, the auditor's office identified purchases made in other cities for both Fire and EMS. It identified specific transactions made in Houston that fleet management determined to be fraudulent. Fleet determined that the EMS fuel card holder was not in Houston during the time the purchases occurred and informed WEX of the fraudulent charges.
The auditor's office also identified numerous purchases of premium and super unleaded fuel when vehicles should have only been using regular unleaded fuel.
Fuel cards for Fire have a limit of $200 dollar per transaction and $400 limit per day. EMS fuel cards have a $75 dollar limit per purchase and $150 limit per day. Data collected by the auditor's office showed fuel purchases for EMS vehicles exceeding the fuel card purchase limits 314 times out of 22,979 transactions; and 15 times out of 29,585 transactions for Fire vehicles.
The auditor's office reported that these incidents happened because SAFD Fleet does not perform a detailed monthly review of fuel purchases. In addition, WEX tracks fuel purchases by the user’s pin number, which must be entered at the pump. The user's pin number is their badge ID number and is set up by the Fleet Manger. The auditor's office expressed concerns that this could lead to potential fraud issues if users know each other’s badge ID numbers.
The report also revealed problems with P-card purchases. When reviewing transactions from September 2020 through September 2021, the auditor's office identified that nine out of 12 months of documentation packets did not have adequate support for all the transactions. Additionally, two out of the 12 months reviewed contained purchases that included sales taxes that were paid.
Although SAFD fleet management and SAFD fiscal had controls in place to review and approve P-card transactions, they did not identify the transactions that were not adequately supported or that included sales tax, the auditor's office reported. Lacking proper P-card controls can result in an environment that is conducive to fraud, waste, and abuse, the auditor's office warned.
The City Auditor's Recommendations
In its report, the city auditor's office recommends that the fire chief:
- "Implement controls over the fuel card program that include a detailed monthly review of fuel card transactions. The monthly review should include looking for anomalous transactions that do not meet the normal business criteria including non-local transactions, excessive transactions per vehicle per day, mismatch of fuel type and vehicle, multiple transactions by the same cardholder in a 24-hour period, etc.
- "Implement additional controls so P-card transactions that do not meet the proper guidelines are not approved and paid."
San Antonio Fire Department Management Responds
According to the audit, SAFD management agreed with the findings and has developed steps to address them.
SAFD released a statement to Government Fleet in response to the audit. In the statement, management explained that the fueling that was conducted outside the city was a result of "card skimming," and was not done by one of its employees.
The statement also said that when the incorrect fuel type was used, it was often tied to the fueling of tools and equipment that are stored on the apparatus, like onboard generators.
Regarding fueling over the allotted times per day, SAFD explained that was a direct result of the department being "a very busy metropolitan fire and EMS service." The statement went on to explain that when call volume is high, it often requires emergency response apparatus to refuel multiple times in one shift.
"Although these discrepancies were extremely rare in the grand scale of our program, the SAFD has taken proactive steps to further reduce the possibility of these discrepancies happening again," the statement said.
One of the major changes implemented requires a unique six-digit pin for each employee when refueling. This replaces a 4-digit input that was used previously. SAFD also has a management analyst conducting additional reviews of the fuel card program to look for specific anomalies.
"The SAFD is confident in the changes that have been implemented and will continue to remain open, transparent, and proactive with all fiscal matters," the statement concluded.