ASSET MANAGEMENT: More Effective Management of Vehicle Fleet Would Improve Safety and Reduce Costs
The objective for this report was to assess the effectiveness of the company’s current efforts to better manage its vehicle fleet, including any efforts made by the company to respond to our prior observations.
We found that the company has addressed some weaknesses in its management of its vehicle fleet, including improving safety by installing dashboard cameras in almost three-quarters of the fleet, and taking steps to right-size the fleet in response to prior reports by reducing it by approximately 100 vehicles. The company has not, however, addressed other longstanding weaknesses, including mitigating remaining safety risks; ensuring that it needs all the vehicles it has; and responding to misuse of fuel purchase cards, overdue maintenance, and past-due inspections.
As a result, the company continues to face increased safety and liability risks and incurs excess costs. For example, the company will face financial risks for injuries or damages caused by high-risk drivers until comprehensive and regular driver’s license screenings and driving record checks are put in place. Additionally, we identified $91,000 in inappropriate fuel card purchases and costs resulting from a lack of required vehicle maintenance in fiscal year 2019. We also estimate the company could avoid annual lease costs of as much as $872,000 with stronger controls over vehicle justifications and re-justifications.
To address the findings in our report, we recommend that the Procurement department take several actions, including requiring more timely coaching and enforcement actions for drivers with safety violations, periodically checking drivers’ license status and driving histories, requiring the use of more comprehensive criteria to justify obtaining new vehicles and keeping existing ones, and addressing fuel purchase card misuse as well as delayed maintenance and required safety inspections.