PALO ALTO, CA - Palo Alto officials have halted the city's vehicle-replacement program after an audit found more than a third of the vehicles in the city's fleet were underused in fiscal year 2009, according to a new report from City Auditor Lynda Brouchoud's office.

Released April 14, the audit analyzed the City's fleet utilization and replacement policies and practices; database completeness and accuracy; adequacy of internal controls; and strategy for promoting climate protection goals.

The report identified about $2.5 million in avoided expenditures for fleet replacements, long-term efficiencies totaling $396,000 in potential annual cost avoidances, and $123,000 in alternative-fuel revenue recoveries. The report also recommended better and stable funding for the fleet and improved internal controls over fuel and parts inventories.

Mileage data for 120 transport vehicles (sedans, vans, and light pick-up trucks) in the city fleet revealed 38 percent were driven less than 2,500 miles -- the city's threshold for "minimal utilization." Palo Alto's underutilized vehicles cost the city about $396,000 in fiscal year 2009, which ended June 30, according to the audit.

To avoid more unnecessary expenditures on unused vehicles, Palo Alto officials decided to freeze the city's replacement program for non-emergency vehicles once the auditor's office shared its preliminary results, reported The new audit recommends that the Public Works Department's fleet management continue this freeze until it can "reduce the size of the fleet and increase utilization."

By freezing its vehicle replacement program in 2010, the city refrains from spending about $2.5 million (about $948,000 of which would have funded underutilized vehicles). The audit recommends the freeze continue until the fleet-management team comes up with a better plan for vehicle usage.