Audit reveals millions in errors at DMV

Friday, Jan. 18, 2002 | 9:54 a.m.

CARSON CITY -- Lackadaisical accounting at the state Department of Motor Vehicles has led to millions of dollars in errors, which temporarily shortchanged the state and some local governments, a legislative audit says.

The department also made mistakes in refunding money to companies paying tax on special fuels -- sometimes giving them too much money and, in some instances, not enough.

The examination, presented Thursday at a meeting of the Legislative Audit Committee, said the administrative services division of the department "lacks adequate controls to ensure transactions are processed accurately and in accordance with laws and regulations."

Deputy Legislative Auditor Michael Chadwick said from October 1999 through May 2001 the department failed to disburse to the state's general fund $9.5 million in sales tax revenue.

From April 2000 to October 2000 more than $3.9 million in tax collections were not properly distributed to Nevada counties, said the audit.

Chadwick said the department corrected these errors, but there were still weaknesses in the system, increasing the chances for mistakes.

Ginny Lewis, department director, told the committee the agency has made "great strides" in the past two months in correcting these deficiencies. These were the result of "human error," she said. The staff includes only three people, who were responsible for processing $480 million. And the agency took over collection of the gasoline tax in January.

She indicated she would ask the next Legislature for additional employees.

The audit also found undetected errors and incorrect refund checks to companies that pay special fuel taxes. In one case a company was overpaid about $172,000 in refunding a company. In two others underpayments totaled $48,000.

Chadwick said although millions of dollars in refunds are processed, the department did not review supporting documents to verify refund amounts.

The examination said the department receives more than $3.6 million a month in credit card receipts, but the computer report of the collections doesn't agree with the bank deposit.

The auditors said they reviewed 24 days of deposits. In 16 of those days, the credit card receipts did not match the bank deposit.

"Not monitoring credit card deposits and investigating unreconciled differences increases the risk of loss, misuse or error regarding credit card transactions.

"In addition, delays in performing reconciliation procedures could result in significant irregularities going undetected," said the audit.

In another audit, the examination found thousands of dollars in missing equipment from the state Division of Emergency Management. It said about $40,000 in assets were unaccounted for and that the agency failed to follow proper procedure in safeguarding the property.

Auditors also complained the division failed to oversee overtime for workers. In one case, an employee collected $23,400 in overtime in a year, and the agency was criticized for failing to develop regulations since 1999 to disburse money to local governments to pay for disaster relief expenses.

Division Chief Frank Siracusa said much of the missing equipment was more than 10 years old and has since been turned over to local governments. In one case, the state attorney general's office conducted an investigation for theft but never brought any charges.

Siracusa said that the increased use of overtime was due to a loss of staffing, as well as increased duties without additional funding.