Internal Audit Department
AUDIT REPORT
Fleet Operations Audit
Scope Areas 1 & 2:
Vehicle Inventory & Procurement
Project Number: FY2024-FLEETOPS
Report Date: June 14, 2024
To: Office of the Superintendent
Auditors:
Tisha Smoots, Internal Auditor II
Nicole Cook, Senior Compliance Auditor
Scope Area 1: Inventory
Objective1: Examine internal controls related to the reliability of records and
reports regarding DeKalb County School District Vehicle Fleet Inventory.
Objective 2: Determine that systems and practice are in place to ensure that
vehicle identification data captured is authentic, accurate and inclusive across
DCSD software platforms.
As of April 2024, DeKalb County School District (DCSD) vehicle fleets consisted of approximately
996 buses (yellow fleet) and 435 support vehicles (white fleet). DCSD Fleet Services Division
primarily oversees the maintenance, repair, and disposal of fleet vehicles. Fleet Services works
in collabora on with select departments (i.e. Opera ons, Transporta on, Plant Services, Public
Safety, and the Superintendent’s Office) during the budget, approval, and requisi on stages of
vehicle acquisi on.
DeKalb County School District
Vehicle Inventory as of
April 2024 Count
School Buses 996
Support Vehicles 435
Audit Team Ac ons:
The auditors conducted interviews with key Fleet Services and Finance personnel to gain a
be er understanding of their respec ve roles within the inventory management process. The
auditors assessed controls in place regarding inventory management, against Board Policy -
‘Capital Assets’, Standard Opera ng Procedures; including other areas not covered by the above
statutes and guidelines, i.e. best prac ce. The auditors reviewed vehicle inventory reports
provided by Fleet Services & Finance Department - ‘Capital Asset Management Team’. Inventory
reports received from Fleet Services were compared to the Asset Inquiry Report obtained from
Finance. The asset inquiry report reflected 415 support vehicles and 1,173 school buses-yellow
fleet in contrast to our final count reconciled to Fleet Services reports. As, indicated in the table
above the asset inquiry report failed the data integrity test of inclusiveness. Reports were
provided from Fleet Services in-house managed so ware (RTA) and DCSD in house managed
so ware (MUNIS). To provide a reasonable level of assurance that RTA inventory records are
reliable the auditors performed a two-way match of the full popula on of approximately 996
school buses & 435 support vehicles by reviewing reports generated from RTA and MUNIS. A
reconcilia on was performed by tracing and vouching vehicle records from the reports to the
general ledger accounts. Reports were reviewed to ensure that per nent vehicle details (vehicle
iden fica on number, make, model, year, mileage etc.) were recorded correctly. The auditors
performed several data integrity tests to ensure that inventory records were accurate,
authen c, systema c, and inclusive. Vehicle Fleet counts and details were examined for
accuracy and consistency across the various so ware systems. The auditor iden fied several
instances where data was either missing or incorrectly recorded within the so ware. As a result,
Fleet Services inventory records failed several data integrity tests pertaining to missing and the
accuracy of per nent vehicle iden fica on details. The ac ve fleet asset inventory records in
RTA and MUNIS are materially inconsistent. The auditor deemed the vehicle inventory records
unreliable. The discrepancies listed below were discussed with management.
Control Failure 1A: Insufficient, incomplete, and inaccurate vehicle informa on found
within Fleet Vehicle Management Systems records. [Fleet Services Division]-High Risk
Requirement per DCSD Opera ons Division-Fleet Services Department SOP21-22 Sec on 1:
Vehicle Procurement, Deployment and Disposal.
Procurement – Acquisi on states: “The Fleet Service will assist departments by providing
historical vehicle data to jus fy the replacement of a current vehicle…The Fleet Service
Department’s role in the acquisi on of vehicles include Historical Vehicle Data, et al”.
1A-1. Ques onable Purchase Price ($0.00 & $33.00 & $103 & $0); Input Error. The
auditor iden fied 4 support vehicles and 12 yellow fleet vehicles with erroneous
purchase prices. (Inaccurate)
1A-2. Ques onable IN-SERVICE DATE (00/00/0000); Missing Data. The auditor iden fied
184 support fleet vehicles and 33 yellow fleet vehicles with ques onable In-service
dates. (Inaccurate & Insufficient)
1A-3. Ques onable VEH LOCATION; Missing Data. The auditor iden fied 158 support
fleet vehicles with no loca on listed. (Insufficient & Incomplete)
Improvement Opportunity:
Upon review of audit documents and reports received from Fleet Services, we have observed
some inconsistencies. Since safeguarding of assets is a cri cal part of management controls,
receiving reports that contained missing ‘in-service’ dates and physical assigned loca ons for
support vehicles/school buses bring into ques on the reliable of the inventory records provided.
Informa on access is only the beginning of data sharing across departments; though Fleet
Services and Finance have shared access via Samsara, we have observed gaps in the prac ce of
that process. To ensure that systems and prac ces are in place to manage and monitor vehicle
iden fica on records; efficiencies must be developed and introduced to error-proof the data
entry of per nent vehicle iden fica on details and the process of genera ng reports for
reconcilia on and audit purposes. Sufficient, complete, and accurate vehicle informa on is
necessary.
Regular monitoring and repor ng of financial and opera onal informa on between Fleet
Services & Finance Department - ‘Capital Asset Management Team should be
implemented to support decision-making and to ensure op mal management of the
DCSD vehicle fleets.
Management should consider including the assigned department loca on for all vehicle
assets as a cri cal part of data collec on/repor ng as a safeguarding tool for all vehicles.
Management Response:
Mee ng Held 04/23/2024.
Fleet Services stated that they are now collabora ng with Finance to ensure they have the most
current fleet inventory records. Fleet Opera ons Manager has informed us that policies
governing vehicle purchases are concurrently being reviewed and updated. As a result, a wri en
‘School Bus & Support Vehicle Administra on Guide’ is in the works. Fleet Services Director –
has championed this endeavor which should be approved in the near future. In the mean me,
Fleet Data Specialist III will be providing periodic updates to ‘Support vehicles’(White Fleet)
inventory; ‘Buses’ (Yellow Fleet) inventory; as well as a ‘Vehicles on hold and sold’ report to the
Capital Asset Management Team on a quarterly basis.
Control Failure 1B: Unfinished/un-official Vehicle Audit Inventory Report per Fiscal
Year-2021. [Finance-Capital Asset Management]-High Risk
Requirement per Board Policy DIB-Capital Assets Policy for Capital Assets: Adopted/Last
Reviewed: 04/18/2022.
Physical Inventory and Tracking Assets states: “A physical inventory will be conducted on an
annual basis for all Capital Assets. The Division of Finance Capital Asset team will coordinate
the annual physical inventories”.
1B-1. Fiscal Year 2021- Audit Inventory Report. Auditors found both lapses in
con nuous monitoring, and the complete lack of wri en proper controls related to the
tracking of capital assets, “vehicle class’. The audit team heard anecdotal evidence
concerning inventory monitoring, but no formal reports were furnished to corroborate
the statement. The lack of proper controls related to Inventory Management and
oversight are evidenced here and the risk exposure should be mi gated immediately.
(Fiscal Year 2021- Inventory Report not provided for review).
1B-2. Ques onable number of vehicles. Difference of 20 vehicles. Finance report
iden fied 415 white fleet vehicles. Fleet Services iden fied 435 white fleet vehicles.
Auditors reconciled 995 yellow fleet vehicles to 996 iden fied by Fleet Services.
(Inaccurate/Incorrect).
1B-3. Ques onable Model Year. Upon full examina on of vehicle model year records,
Auditor has found as many as 75 inconsistencies per Yellow Vehicle Lis ng provided by
Finance. (Missing Data).
1B-4. Ques onable Serial/Parcel VIN. Fi y-five (55) Vehicle Iden fica on numbers – not
found. Incomplete vehicle records deemed unacceptable. (Missing Data).
Improvement Opportunity:
In the absence of being provided an official Vehicle Inventory Report; the reports received via
Capital Assets personnel were found to be deficient, incomplete, and ill-suited to accomplish
audit objec ves. Consequently, huge discrepancies in total vehicle count were discovered, i.e.
over two-hundred Yellow Fleet Vehicles when compared to Fleet Services records. In addi on,
Finance did not provide evidence of the Fiscal Year 2021- Audit Inventory Report. Our
examina on of records provided from mul ple so ware system became difficult and me-
consuming to fit into a format that was user-friendly for verifica on of data for audit purposes.
Presently, Tyler Munis, RTA, Samsara, and other systems work independently but not as a
whole. Periodic reviews of vehicle asset class are cri cal yet equally so are the right tools that
would produce the desired data output and consistency. What we refer to as ‘the gap’ in the
current process has been iden fied as func on/role within Finance that would translate
real me vehicle data and transac ons from Fleet Services to the Department of Finance -
General Ledger func on and vice-versa. On-going monitoring will also be required.
We recommend that the Capital Assets Management Team fully comply with GAAP
Guidelines as it relates to the integrity of transac onal data (re: general ledger entries),
as well as the accuracy and validity of Financial Statements Repor ng.
Management should conduct annual analyses or reviews of physical inventory results.
Since an official Vehicle Inventory Audit has not been conducted in recent years, we
advise its implementa on as a strong control against risks observed.
Management Response:
Mee ng Held 05/01/2024.
The Capital Asset Management Team under the leadership of ‘Comptroller’ have explained; that
the team is collabora ng with Fleet Services Division personnel to work out the kinks in the
process, to correct vehicle records in efforts to match General Ledger Records to actual
transac onal ac vi es inpu ed by Fleet Services. This endeavor is recent and will be adjusted
upon the comple on of newly updated policies and procedures. The Team is preparing for
Physical Inventory which should be conducted this Summer-2024. The prior physical vehicle
inventory results were brought into ques on; however, we have not received any new
informa on that would change our current finding, i.e. ‘unfinished/unofficial Vehicle Inventory
Report’. Capital Asset Management Team has also communicated that they hope to add one
more person to the team whose func on would help bridge the gap between Finance and Fleet
Services.
Scope Area 2: Acquisition
Objective1: Examine internal controls related to the procurement of DCSD
Support Vehicles and School Buses
Objective2: Assess ‘Risks’ associated with vehicle-acquisition process; &
outline potential opportunities to mitigate associated risks.
DCSD Departments are responsible for obtaining funds for the acquisi on of new and or
replacement support vehicles. The department meets with Fleet Services to discuss vehicle
needs. DCSD makes a regular capital investment in the school bus fleet, although the number of
buses purchased each year varies. School buses are then sourced via qualified and approved
vendors (i.e. Peachstate Freightliner LLC; Rush Truck Center) while support vehicles are
facilitated by ac ve vendors: Allan Vigil Ford, Akin Ford LLC, Wade Ford, Hardy Chevy Buick, and
Griffin Chevrolet. Designated vehicles spend amounts are distributed among named vendors in
accordance with Board of Educa on Direc ves awarded. Please refer below regarding the
departments that purchased vehicles during the audit period with the related dollar spend.
Exhibit 1: Support Vehicles purchased during Audit Scope Period: July 1, 2020, throughout June
30, 2023.
Department GL Charge Code Vehicle Expenditures Contract No.
Purchases
700 Superintendent 573000 1 $45, 763.00 99999-001-SPD-0000155-0006
710 Transportation 573000 18 $557, 315.00 99999-SPD-ES40199373002
719 Fleet Services 573000 2 $101,890.00 99999-SPD-ES40199373-009S
751 Public Safety 573000 38 $1,686,143.00 99999-001-SPD0000183-0003;
99999-001-SPD0000183-0006 ;
99999SPDSPD00001550003; 99999-SPD-
SPD0000155-0006
752 Operations/Plant 573000; 543012 63 $1,837,456.60 99999SPDSPD00001550003; 99999-
Services SPD0000155006; 99999-001-
SPD0000183-0006; 99999-001-
SPD0000183-0003
Total 121 $4,228,567.60
Exhibit 2: School Buses purchased during Audit Scope Period: July 1, 2020, throughout June 30,
2023.
Department GL Charge Code BUS Expenditures Contract No.
Purchases
710 Transportation 573200 25 $3,490,696.40 99999-SPD-G201-60601-0001; 99999-
SPD-G201-60601-0003; 99999-SPD-
SWL20200630-001
752 Operations 573200 14 $1,507,243.00 99999-SPD-G201-60601-0001; 99999-
SPD-G201-60601-0003; 99999-SPD-
G201-60601-0002;
Total 37 $4,997,939.40
Audit Team Ac ons:
We conducted interviews with key Fleet Services, Finance and Public Safety personnel to gain a
be er understanding of their respec ve roles within the vehicle acquisi on process. Control
ac vi es were observed and tested by tracing purchase transac ons extracted from Munis to
suppor ng documenta on (I.e. BOE Memorandums, Expense Summary Reports, Requisi ons,
Purchase Orders, Invoices). Vehicle Acquisi on Process was evaluated for adherence, accuracy,
efficiency, and management oversight. The phases of this process involved vehicle request
approval, budget verifica on, dual controls - approval of requisi on package, requisi on-
purchase order crea on, order, delivery, inspec on, registra on & installa on, vehicle historical
data input and storage. DCSD Procurement policy, procedures, purchase transac ons,
corresponding financial reports, interviews, organiza onal hierarchical data including any
supplemental audit data collected have all been examined and evaluated for adherence,
completeness, accuracy, meliness, as well as management’s ac vi es associated with internal
controls and risk assessment.
The auditors applied monetary unit calcula on based on the number of vehicles purchased by
department during the audit period to determine the best representa on of the vehicle
acquisi on process for the purposes of this audit. The auditors conducted acquisi on process
analysis for the top 3 departments (Transporta on, Opera ons and Public Safety) that acquired
support vehicles during the audit period. The purchase of school buses is mainly handled by
Fleet Services in collabora on with the department of Transporta on. In addi on, professional
judgement was u lized to include a few random departments in order to ascertain whether a
standard purchase process was consistently applied. The auditors evaluated the vehicle
acquisi on process and observed the lack of organiza onal cohesion, as well as non-
conformance to standards. The audit team iden fied 4-Internal Control Failures & 1-Inherent
Risk during the observa on of internal controls governing vehicles’ acquisi on.
Control Failure 2A: Vehicle Purchases recorded to incorrect general ledger account.
[Operations Department/Plant Services]-High Risk
2A-1. General Ledger Account 543012-Maint-Fleet Trucks. Management was unaware
that incorrect General Ledger charge codes had been utilized in purchase transactions.
Support vehicles totaling $906,814.00 were purchased using charge code 543012
instead of the designated 573000-Purchase of Equipment other than Bus category per
GDOE-Chart of Accounts. Evidently, this was never caught; due to the lack of efficient
processes, control activities (i.e. report reconciliations), and inter-organizational
collaboration. (Inaccurate/Incorrect).
Improvement Opportunity:
Internal Controls over processes and procedures must be strengthened by making sure that
qualified personnel are staffed and equipped to meet defined departmental objectives.
Effective policies and procedures governing vehicles’ acquisition must be established or
updated to improve adherence and compliance. Collaboration and data sharing in cases where
key functions overlap/cross departments is another critical step. It is important that Fleet
Services Division and Finance – ‘Capital Assets Team’ establish/improve communications as
needed.
Management Response:
Mee ng Held 04/23/2024. Director of Fleet Services Division has informed us of a work-in-
process standard opera ng procedures manual which is expected to be completed – Fiscal Year
End 2024. Please refer to Management Response addi onal details in the Inventory Scope
sec on of this report.
Control Failure 2B: Lack of written standard operating procedures. [Transportation
Department]-High Risk
2B-1. Wri en Standard Opera ng Procedures. Upon examina on of purchase order
packages related to bus purchases during 2022 and 2023, we have found that Fleet
Department personnel func oned as authorized buyer for these transac ons.
Informa on gathered and departmental prac ce were such that some departments
assumed the responsibili es to procure their vehicles while others leaned on Fleet
Services Personnel to assist them in the process. Consequently, bus acquisi on
transac ons did not originate from the Transporta on Department. Since, there is not
yet a recognized standardized process either communicated or prac ced, uniformity and
consistency has been lacking. Again, the lack of the proper control environment and
informa on & communica on components of internal control are evidenced here.
Improvement Opportunity:
As June 2024, the Transportation department has requested that the Board of Education
approve the purchase of Forty (40) Type C, 72-passenger Air-Conditioned Bluebird gasoline
engine school buses and Five (5) 2026 Blue Bird/Vision 48-Passenger School Bus with lift from
Yancey Bus Sales through the Georgia Statewide Contract (SWC) #99999-SPD-G20160601 for an
amount of $6,446,455. In order to improve operational efficiencies, the processes must be re-
structured, communicated and practiced so that there are uniformity departments wide. This
will improve the basis for carrying out the necessary internal controls across the organization-
DCSD. It is especially urgent to get newer processes implemented promptly.
Control Failure 2C: Lack of written standard operating procedures. [Department of
Public Safety]-High Risk
2C-1. Standard Operating Procedures. The Department of Public Safety has informed us
that to-date their vehicle acquisition method has been primarily their own. In the
absence of a centralized process and procedures, they have assumed the responsibility
of purchasing their vehicle fleets. The buyer per transaction records indicate that
vehicle acquisition originated from the Department of Public Safety in collaboration with
Fleet Services personnel where necessary. They have reported little or no training to
handle this task. And has suggested that this is outside of their purview and desires that
Fleet Services take over this role.
INHERENT RISK Identified: Segregation of Duty [Department of Public Safety]-High
Risk
The auditor iden fied some concerns related to ‘Segrega on of Duty’ (SoD). The risk
iden fied within the Department of Public Safety stems from insufficient or inadequate
staffing and assigned roles that should raise conflict-of-duty concerns (i.e. SoD). The
current Vehicle Acquisi on guidelines performed is an unofficial one in the absence of
management oversight, review, or monitoring. It is apparent that in some situa ons the
dis nc ons between certain job func ons and those who perform them are at mes
either obscure or non-existent. Consequently, a single employee had been tasked with
mul ple roles that could poten ally lead to risk exposure associated with abuse and
fraud. When an employee has mul ple roles within a par cular business process it is
difficult to determine when that process is in danger of being circumvented, such is the
case of the Vehicle Acquisi on Process in the ‘named department. It appears that
execu ve assistant working in the capacity as ini al requestor, buyer, while
simultaneously fully responsible for the administra on of the final vehicle ou i ng
process in connec on to the Peach Pass.
Improvement Opportunity/Risk Mitigation:
As of June 2024, Fleet Services requested that the Board of Education approve the purchase of
fifteen (15) police vehicles. Fifteen (15) - 2024 Ford Explorer Police Interceptor (Black) utility
vehicles would be purchased from Wade Ford Inc. through State of Georgia Contract 99999-
001-SPD0000183-0006 and outfitting of the vehicles would be purchased by an approved
vendor for an amount not to exceed $883,416.30. Internal controls can be strengthened by first
evaluating the effectiveness of its controls, identifying opportunities to discourage errors, while
halting potential abuse and fraud. Once controls have been thoroughly assessed, management
must make needed adjustments and improvements in all areas where internal controls have
been insufficient or compromised. It should be understood that … The Buyer’s role should be
always distinct from Accounts Payable process; subsequent transactions impacting the General
Ledger should be performed by one individual who must remain independent of ‘the approvals’
function. Risk can be further mitigated and contained by spreading accountability among a
team of associates making it harder for any one individual to have total control.
Control Failure 2D: After-the-Fact Purchases [Fleet Services]-Medium Risk
DCSD Procurement policy, procedures, purchase transactions, corresponding financial reports,
interviews, organizational hierarchical data including any supplemental audit data collected
have all been examined and evaluated for adherence, timeliness, as well as management’s
activities associated with internal controls and related risk.
2D-1. After the Fact Purchase. During our audit we selected and analyzed a sample of
purchase order packages using the Monetary Unit method resulting in the most vehicles
purchased, the corresponding amounts, as well as adherence to procedures. Tyler-
Munis generated transaction records were vouched to Fleet Service Division historical
purchase activity spreadsheet to determine adherence and timeliness. Six packages
among Bus Fleets and thirteen from Support Vehicle Fleets were selected. After-the-fact
purchase orders in both fleet categories were found and are highlighted in table below
indicating the control failure related to timeliness and adherence to policy and
procedures.
2D-2. After the Fact Purchase. Negligence related to the breach of Purchase Policy was
discovered according to ‘after-the-fact purchase order’ referenced in the table below.
Three buses were allowed to be ordered and invoiced prior to fiscal year ending
6/30/2021 without the appropriate Board of Education approval as stated in the
‘Justification for the deviation of Policy’ portion of the form on record. Board approval
was finalized three months later which led to late payment and late bus delivery. Thirty-
five Support Vehicles purchased fell short of the Purchasing Policy- DJE requirement
which states that goods or services obtained without valid DCSD purchase order is a
violation. This resulted in the cancellation and replacement of purchase order to reflect
the true transaction period and activity. Consequently, back ordered vehicles led to
major delays in vehicles delivery, as well as changes in order dates, receive dates,
invoice dates and payments.
Exhibit 3: After-the-fact Purchase Orders: School Bus & ‘Support Vehicle’ fleet categories.
Purchase Order #s $Spend Vehicle Purchases Order/Recv./Inv./Pymt. Contract No.
Per FY 21, 22, 23 Dates
22006502 $299,908.40 3 11-18-2021/11-30- GSSB# 99999-SPD-
2021/06-28-2021/12- G20160601-0001
03-2021
23001480/22008454 $837,150.00 35 08-16-2022/08-17- GSC-99999-SPD-
2022-02-22-2023/08- ES40199-373-002
01-2022-10-27- 03-03-
2023
Improvement Opportunity:
Acquisition internal controls ensure audit compliance, reduce risk, and eliminate financial
waste. Internal controls set the rules for what can be purchased, how, and from what supplier.
After-the-fact purchase orders are highly discouraged however, a more comprehensive
response plan should be implemented by management. Once the purchase policy has been
violated, the next steps should include robust re-training of all personnel concerned. Purchase
order packages should include a verification checklist with components such as BOE date of
approval as a pre-requisite to the final dual signatures’ approval. Management should also
evaluate current vendor performance and encourage the sourcing of quality and reliable
suppliers. Once again, proper internal controls over key processes cannot be emphasized
enough; notwithstanding, there will be legitimate instances where items are just not available.