FORT WAYNE – City employees with take-home cars did not track their personal use of the vehicles, sometimes approved their own vehicles and were not taxed the appropriate amount on the value of the car, according to an internal city audit released Friday.
The audit of the city controller’s office found several reporting issues, specifically with city employee compliance with the city’s own take-home vehicle policy. The review examined activity in the office for 2010 but was not completed until last month.
The number of city employees with take-home vehicles is small – it was 15 in a Journal Gazette review last spring – but many of the employees with those vehicles didn’t follow the city’s own policy, according to the report. The audit did not examine vehicles used for public safety purposes.
Teresa Neumeier, director of internal audit, said the city’s internal take-home vehicle policy requires a regular review of the use of the vehicles to determine whether the business cost is worth it. The audit department, however, was unable to determine whether the cost of the vehicle to the city was appropriate because the city has not required its employees to track their business and personal miles.
In addition, the audit discovered that three of ten employees audited approved their own vehicle request. Such approval should have been obtained from a superior or a governing board, according to the audit.
The study by The Journal Gazette found the city had recently increased the number of take-home vehicles and created an exception so former Deputy Mayor Beth Malloy could have a car.
Controller Pat Roller’s office responded to the report by agreeing to the findings and promised to work to ensure proper information is kept. The changes were to be made by the start of the year. City Attorney Carol Taylor, a member of the internal audit committee, said a group of city employees is working to review numerous policies. She said they will likely be released all at once.
The audit also found the city was not following its own policy in determining the taxable value of a take-home vehicle to an employee. The city was adding $3 per day of vehicle use to a person’s taxable income. While this is an acceptable process for the Internal Revenue Service, it went against city policy for the vehicles.
Neumeier said the city should have been calculating the taxable compensation based on the value of the vehicle and personal miles driven. On average, this would have meant an additional $1,000 in taxable income per employee, which would have increased the employee’s income tax burden.
The controller’s office responded that it agreed with that finding and is working to correct it.
