Controls Over Fuel Inventory
Controls over Fuel Inventory
Released November 2012 Download the Full Report here The Office of Fleet Services dispensed 7.4 million gallons of fuel to city departments between March 2010 and June 2012, totaling $22.9 million. The office operates 60 pumps at ten locations throughout the city. It tracks departments’ fuel use with an automated fuel management system called FuelFocus and bills departments monthly. Industry experts identify fuel as the second largest public sector fleet expense, and some estimate that 3% of a company’s fuel budget is lost to theft. Given the weak control environment, it is likely that the city is experiencing a higher percentage of fuel loss due to theft. |
Our audit identified significant control deficiencies and an overall control environment inadequate to prevent or detect theft or misuse of fuel. We identified patterns of use consistent with theft and extended our audit procedures to determine whether fraud had likely occurred. Weak controls over user IDs and lack of CCTV (closed circuit television) tapes prevented conclusive evidence of fraud. However, we found widespread breakdown of controls:
We recommended investment in new fuel controls which could yield $320,000 in annual savings and pay for themselves in less than two years.
- The Office of Fleet Services failed to implement system settings to limit the amount of fuel pumped into vehicles/equipment.
- More than 3,600 user IDs in FuelFocus did not match the list of current employees, which increased the opportunity for fuel misuse.
- FuelFocus contains inaccurate, unreliable user and vehicle information.
We recommended investment in new fuel controls which could yield $320,000 in annual savings and pay for themselves in less than two years.