SCOTTSDALE, AZ - A City of Scottsdale audit of fleet management rates recommends ensuring consistent vehicle replacement and maintenance and operations rates; developing specific financial policies for the Fleet Management Fund; and obtaining savings through reduction of underutilized, loaner, and take-home vehicles. The Public Works Division's Fleet Management Department maintains more than 1,200 city vehicles and equipment.

The report addresses three key areas for improvement:

1: Fleet Management has not developed a consistent, sound methodology to develop vehicle replacement and maintenance & operation rates. In addition, the fleet department's software is not fully utilized to manage vehicle and rate information, and inconsistent manual overrides cause the data to be less useful.

Recommendation: Fleet Management should ensure that vehicle replacement and maintenance & operation rates are based upon a documented, cost-based methodology that is consistently applied. In addition, Fleet Management should track the vehicle replacement charges for individual vehicles and equipment to ensure departments are not over or undercharged.

2: The City's Fleet Management Fund exceeds actual operating and capital needs. In addition, at least $250,000 of the fleet fund was transferred to another fund for non-fleet purposes, and additional cash transfers totaling $7 million were not clearly designated for fleet purposes.

Recommendation: Develop more specific financial policies for the Fleet Management Fund. The department should establish written guidelines and procedures for the development of a 10-year financial plan. Finally, ensure capital funds are only applied to fleet-related capital projects and review whether any money transferred from the Fleet Fund for non-fleet purposes should be returned.

3: Costs for underutilized, loaner, and take-home vehicles totaled more than $1 million in FY 2010-2011.

Recommendation: Draft a policy and procedures for identifying and removing underutilized vehicles; document policies and procedures for the loaner program and review outstanding loaner vehicles for further fleet reductions; and continue to request an executive review of the take-home vehicle policy and assigned vehicles.

Fleet Management concurred with all findings and has proposed resolutions for each recommendation. All actions are to be completed by June 30, 2011.

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