TO: FROM: DATE:

FLORIDA

CITY AUDITOR'S OFFICE

Mayor and Council Mem~er Margaret Krym, City Audit September 23, 2014

SUBJECT: Report- Evaluation of Internal Controls - Fuel and Parts Acquisition, Monitoring, Disbursement and Usage

Internal control is an integral component of an entity's management and is intended to provide reasonable assurance that the objectives of the entity are being achieved. It is not one isolated activity, but a series of actions in a process. An effective internal control system must be intentional, planned and managed.

We engaged Clifton Larson Allen LLC to perform an Agreed-Upon Procedures Assessment of the controls intended to provide assurance that data regarding the acquisition and usage of Fuel and Parts in the City's Fleet Division is accurate and complete. Their narrative report is on pages one through eight.

Their results and conclusions begin on page five. Detailed descriptions of the processes along with descriptions of 65 controls and 45 recommendations to strengthen and improve these controls are included as follows:

Fuel Acquisition, Monitoring, Disbursement and Usage Parts Acquisition, Monitoring, Disbursement and Usage

Total recommendations

Number of recommendations

26 19 45

Pages 9 - 31 35- 50

We have discussed each of the 45 recommendations with Management and their responses, along with a responsible party and a forecast completion timeline are provided on the control assessment documents.

The Audit Office will list these 45 recommendations in our follow up action register and will revisit them in six months to two years as dictated by Management's response. We will also be removing the 13 follow up action items from the 2011 Fuel Management Audit as these have been superseded by the new 45 recommendations.

Should you have any questions regarding this report I will be happy to respond.

C: John Szerlag, City Manager Michael llczyszyn, Interim Assistant City Manager Dolores Menendez, City Attorney Rebecca van Deutekom, City Clerk Steve Neff, Public Works Director Victoria Bateman, Financial Services Director John Maclean, ITS Director Paul Koch, Fleet Manager Audit Committee

P 0 Box 150027 815 Nicholas Pkwy.

Cape Coral, FL 33915-0027 Phone 239-242-3383 Fax 239-242-3384

CITY OF CAPE CORAL PUBLIC WORKS DEPARTMENT

TO: Margaret Krym, City Auditor

FROM: Steve Neff, Public Works Directo~~

DATE: September 22, 2014

SUBJECT: Fuel and Parts Acquisition Monitoring, Disbursement and Usage Audit Report

The City Manager and his staff appreciate the thorough review of the fueling and parts management portions of the Fleet and related Finance/Accounting processes. The City's fairly recent hiring of a very experienced Fleet Manager coupled with acquisition of quality fleet/fuel management software is moving the City forward towards its goal of becoming one of the top fleets in the United States.

There are many challenges in taking the Fleet Division to that goal, and staff is committed to address them all. The matrix included in the report provides the City Manager's staff responses and proposed actions/timelines for specific audit items.

SN/bw:(Fleetauditreportmemo)

C: John Szerlag , City Manager Michael llczyszyn, Interim Assistant City Manager Victoria Bateman, Financial Services Director Paul Koch, Fleet Manager

CITY OF CAPE CORAL   

EVALUATION OF INTERNAL CONTROLS  FUEL AND PARTS ACQUISITION, MONITORING, DISBURSEMENT AND USAGE 

 FINAL REPORT JULY 31, 2014 

 

        Page 

           COVER LETTER  i 

  I.   FUEL AND PARTS MANAGEMENT OVERVIEW  1 

  II.  METHODOLOGY  4 

  III. SUMMARY OF RESULTS  5 

  IV. FUEL ACQUISITION, DISBURSEMENT AND USAGE INTERNAL CONTROL DOCUMENTATION,        INCLUDING MANAGEMENT RESPONSE  

9 

  V.  FUEL MANAGEMENT FLOWCHARTS  32 

    FLOWCHART A: FUEL ORDERING, RECEIVING AND PREPARATION FOR PAYMENT  33 

    FLOWCHART B: FUEL COST ALLOCATION AND INVENTORY RECONCILIATION  34 

       

  VI. PARTS ACQUISITION, DISBURSEMENT AND USAGE INTERNAL CONTROL DOCUMENTATION,       INCLUDING MANAGEMENT RESPONSE 

35 

  VII. PARTS MANAGEMENT FLOWCHARTS  51 

    FLOWCHART C: PARTS ORDERING  52 

    FLOWCHART D: PARTS RECEIVING  53 

    FLOWCHART E: PARTS INVOICE PROCESSING  54 

    FLOWCHART F: PARTS COST ALLOCATION  55 

       

       

       

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   July 31, 2014  Ms. Margaret L. Krym, City Auditor City Auditor’s Office City of Cape Coral 1015 Cultural Park Boulevard  Cape Coral, Florida 33990  Dear Ms. Krym:  As  requested by  the City of Cape Coral  (the City), we have completed our engagement  to  review  the internal  controls  associated with  the City’s  fuel  and parts  acquisition, disbursement, monitoring,  and usage processes. Specifically we carried out an assessment in the following areas:   

1. Controls  capturing  transaction  data  for  the  acquisition  and  disbursement  of  fuel  from  source transactions to the accurate recording of that data in the general ledger. 

2. Controls capturing transaction data for the acquisition and disbursement of fleet parts  inventories from source transactions to the accurate capture of that data in the general ledger. 

3. Controls  that provide assurance  that  the  fuel usage database  information  is accurate and  reliable including fuel usage by vehicle and by driver, miles per gallon per vehicle, department, time period, mileage odometer information, etc. 

4. Controls providing assurance that the fleet  inventory parts usage database  information  is accurate and reliable including services provided by vehicle, department, time period, and maintenance type and costs per vehicle.  

5. Controls ensuring accurate tracking and safeguarding of fuel during its movement from one location to another by City staff in tanker trucks.  

6. Controls governing the use of fuel in non‐vehicle equipment. 

7. Controls  utilized  by Management  to monitor  the  efficient,  effective  and  economical  use  of  fuel including:  

a. Reconciliation  of  the  fuel  inventory  amounts  in  the  fleet  management  applications  to  the financial accounting inventory amounts,  

b. Review of utilization reports with anomaly reporting and trend analysis,  

c. Review of maintenance and fuel costs per vehicle compared to vehicle age,  

d. Inspection and recalibration of fuel pumps. 

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The purpose of this consulting engagement was to – 

Review  the data  flow processes and  internal  controls  in  the City’s  fleet management and provide an assessment as  to  their  strengths and or  vulnerabilities post‐installation of  the new  fuel management application, GasBoy. 

Document the processes as they currently exist through detailed flowcharts, including documentation of key control points (manual controls and application controls). 

Review  and  assess  key  risks  previously  identified,  and  determine  the  effectiveness  and  level  of mitigation with updated actions. 

Prepare control descriptions and an internal control assessment tool.  

In  total, we  identified and documented 65  controls  (39  for  fuel, 26  for parts management) within  six  sub‐processes, and made 45  recommendations  to  improve controls,  (26  for  fuel, 19  for parts management). As requested by the City, our study did not include testing of internal controls.  Our  report  is  intended solely  for management of  the City of Cape Coral, and  is not  intended  for any purpose other  than  to  assist  you  with  the  items  mentioned  above.  Consequently,  our  report  is  limited  for  your information  and  use  only  and  should  not  be  used  by  anyone  else.  In  addition,  our  report  is  based  on circumstances that were current prior December 2013, and we have no responsibility to update our report for events and circumstances that occurred after that date.    

Respectfully submitted,   

CliftonLarsonAllen LLP    Jennifer Leary, CPA Partner 704‐998‐5283 jennifer.leary@claconnect.com 

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I. FUEL AND PARTS MANAGEMENT OVERVIEW   The City’s Fleet Management Division (herein referred to as “Fleet”) manages repair and maintenance of a fleet of approximately 850 vehicles and seven non‐vehicle equipment items (i.e., generators). In 2013, the City purchased approximately $2.3 million in fuel and $900 thousand in parts and tires (collectively referred to by the City as “equipment” or “parts”) to satisfy the operational needs of  its  fleet, broken down as follows:    

Fiscal Year 2013 Fuel and Equipment Expenses Equipment  Fuel 

Parts    $ 632,642.07 Tires       281,245.24 Total    $ 913,887.31  

Unleaded                  $ 1,592,281.35 Diesel           499,157.15 Dyed diesel         237,342.88 Total    $ 2,328,781.38 

  Fuel acquisition, distribution and inventory management  Fuel  inventory  in  the  City’s  storage  tanks  and  its  distribution  to  City  vehicles  is  primarily  controlled through  GasBoy,  an  automated  system  that  keeps  track  of  unleaded,  diesel  and  dyed  diesel  fuel delivered by  the  fuel vendors. GasBoy also  tracks  the  fuel dispensed at  the gas  stations and  the  fuel transferred  internally from the storage tanks to fire station fuel pumps or to off‐road vehicles, such as golf  carts,  and  generators using  the City’s  three  tanker  trucks.  Fuel dispensed  to  gas  containers  (gas cans), which have no GasBoy equipment,  is controlled by assigning an asset number  to groups of gas cans designated to specific user departments.    GasBoy operates through a combination of a data (odometer) reader and a  fuel ring mounted around the  fuel  inlet, both  installed  in  the  vehicle, along with  the employee’s  ID badge, programmed  in  the GasBoy system to allow the employee to dispense fuel. Storage tanks and gas stations are also equipped with GasBoy devices to allow tracking of fuel transactions. City vehicles 2006 and newer (770 or about 90% of the total vehicles) are equipped with both data readers and gas rings. Since fuel consumption of vehicles 2005 and older is lower and to reduce equipment cost, those vehicles are only equipped with a fuel ring and their odometer data  is captured through the driver’s manual entry of the mileage  in the GasBoy controller located at the pump. Fuel is only dispensed when the employee swipes the ID badge and the mileage is entered.  Fuel  consumption  by  vehicle  or  non‐vehicle  equipment  is  captured  through  FASTER  Asset  Solutions (FASTER), the City’s asset management system that tracks all parts and labor used in every vehicle. Each vehicle  has  an  asset  number  assigned  in  FASTER,  and  asset  numbers  are  associated  to  the  City department  that owns  the  asset. GasBoy  and  FASTER  are  integrated  through  an  automatic  interface (installed in November 2013) that allows daily uploads into FASTER, of GasBoy records of fuel distributed from the pumps and tanker trucks.   FASTER does not  interface with the City’s financial management system, JD Edwards (JDE). As a result, there are certain manual processes  in place to facilitate the accounting of parts and fuel transactions. For  recordkeeping,  inventory  reconciliations, and  cost allocation purposes,  fuel purchase  invoices are 

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manually entered in GasBoy and recorded to the general ledger only after the invoice and order are duly reconciled.   Since  the  City’s  fleet management  is  an  internal  service  fund  operation  (not  general  fund),  all  the expenses  related  to  vehicle maintenance  and  repair  (parts  and  labor)  have  to  be  allocated  (charged back) to the department that owns the vehicle (user department).   On a monthly basis the Accounting Department  extracts  data  from  GasBoy  on  fuel  consumption  and  Fleet  extracts  a  fuel  consumption report  from  FASTER,  detailed  by  vehicle  and  user  department.  The  two  reports  are  reconciled  and Accounting  charges  fuel  consumption  back  to  user  departments.  Charges  of  parts  and  labor  are processed through manual postings to the departments’ respective general ledger expense accounts in JDE.  The City is allowed to request a reimbursement for state and federal excise taxes paid on purchases of diesel and unleaded fuels. Monthly, Accounting gathers state tax information from GasBoy and FASTER records, completes of  the Local Government User of Diesel Fuel Tax Return  form, and submits  to  the Florida Department of Revenue for the tax refund.   The following graphic represents the flow of data between GasBoy, FASTER and JD Edwards (JDE).  

    

Storage tank/ pump stations

Vendor fuel delivery

Tanker Trucks

(a)

Fire Stations’ fuel pumps

Individual vehicles, gas cells & golf

carts

Non GasBoy monitored equipment

Automatic credit to GasBoy inventory.

Automatic transfers/pass throughs within GasBoy inventory

Automatic debits to GasBoy inventory at tank, pump or vehicle level

Automatic credit to JDE inventory by receipt of PO by fuel type

Manual credit to user departments and debit to JDE inventory at pump/tank level

GasBoy realm (core fuel inventory system)

Fuel Management Data Flow Diagram

Faster realm

JDE realm

Interface/User dept.

disbursement detail

General ledger, tank/pump inventory

- Gas cans

Cost allocationVendor payment

Legend:

Interface

Notes:(a) Incoming tanker truck fuel (either vendor or transfers from existing stock) is not yet being recorded in GasBoy. Disbursements are recorded as a manual log.

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Parts acquisition and distribution  Except for fluids, City policy is to order parts as needed and to not carry inventory of parts. The City has elected  to  use NAPA Auto  Supply  as  the  contractual  third‐party  priority  vendor with  the  purpose  of reducing City administrative effort and  time delays associated with procuring parts, while maximizing the advantages of volume discounts and contract pricing. NAPA has an On‐Site Store at the City’s Fleet facilities  manned  by  a  full‐time  NAPA  employee.  NAPA  stocks  frequently  used  products  in  this warehouse or orders  from  its external warehouse as needed. NAPA also has  the authority  to procure parts  that  NAPA  does  not  stock,  including  specialty  parts,  on  the  City’s  behalf.  In  this  case,  NAPA researches vendors and prices, consults with City personnel as needed, and selects the most beneficial option for the City. A price mark‐up is added on non‐NAPA stocked purchases. In certain occasions, Fleet procures outside the NAPA arrangement, especially when the purchase is through state contract where the City benefits from discounts when it orders directly.   Parts’ acquisition and disbursement is also supported by FASTER, which uses a Work Order (WO) system to  track  all  parts  and  labor  associated  to  vehicle  (asset)  repair  and maintenance. WOs  can  only  be created for a valid asset number and NAPA can only place purchase orders in its system with an existing FASTER WO.   The NAPA and FASTER systems are  integrated  through an  interface  that allows daily uploads of NAPA procurement  transactions. Daily, NAPA  invoices are  reconciled  to  the  interface report before  they are entered into JDE.    The following graphic represents the flow of data between GasBoy, FASTER and JDE.  

Parts Management Data Flow Diagram  

 

FASTER realm

NAPA purchases

NAPA system realm

Direct City purchases

Work Order system used to capture and track parts usage by vehicle

Manual requisition

Manual receipt

NAPA/FASTER interface

JDE realm

General ledger/ cost allocation

Manual receiptManual receipt

JDE Purchase Order

Cost allocation &Vendor payment

Manual interface

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II. METHODOLOGY  Our  first  step  was  to  interview  key  individuals  to  document  our  understanding  of  fuel  and  parts management practices, and to identify related sub‐processes.  Individuals interviewed included –   Public Works Director  Finance Department Manager  Fleet Superintendent  Finance Department Accountant  Fleet Account Coordinator  Accounts Payable Supervisor  Fleet Service Writer  Information Technology Services Director  Fleet Mechanics (2)  Information Technology ICT Manager  NAPA In‐House Representative    

 The next  step  in our assessment  consisted of evaluating  fuel and parts acquisition and disbursement activities  by  organizing  them  into  sub‐processes.  For  each  sub‐process we  flowcharted  the  relevant steps as carried out by incumbent parties. The flowcharts within the six sub‐processes listed below are included under report Sections V and VII, pages 22 and 34.  Fuel Management 

 A. Fuel ordering, receiving and preparation for payment B. Fuel cost allocation and inventory reconciliation 

 Parts Management 

 C. Parts ordering D. Parts receiving E. Parts invoice processing F. Parts cost allocation 

 For each identified internal control, we then described the control activity and made recommendations to strengthen the design and implementation of the controls wherever pertinent. In total, we identified and  documented  65  controls  (39  for  fuel,  26  for  parts) within  the  six  sub‐processes  listed  above. Internal Control Documentation details are found under report Sections IV and VI, pages 22 and 34 on pages 8 and 25, respectively.    

This space left blank intentionally. 

 

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III. SUMMARY OF RESULTS  We determined that the City, with the exception of the deficiencies and recommendations noted below and within our control matrices, maintains reasonable level of controls for –   Capturing  transaction  data  for  the  acquisition  and  disbursement  of  fuel  and  parts  from  source 

transactions to the accurate recording of that data in the general ledger,  

Governing the use of fuel and parts and ensuring that usage information is accurate and reliable, and  

Allocating (charging back) fuel and parts costs to user departments.   While controls are  in place,  the City needs  to  take certain measures  to strengthen  these controls and ensure  that  they  function  as  they  were  designed.  Our  engagement  yielded  a  total  of  45 recommendations to improve controls, 26 for fuel management and 19 for parts management; these recommendations are  included  in the  Internal Control Documentation tools, Sections  IV and VI  (pages 22 and 34) of this report.   We believe  that  two of  the recommendations resulting  from  this evaluation are particularly critical  to ensuring that acquisition and transaction data is captured accurately and completely, guaranteeing data integrity, and preventing loss. Recommendation 5 addresses the criticality of entering transactions into the  various  systems  on  a  timely  basis;  Recommendation  6  addresses  rules  necessary  for  performing reconciliations of fuel purchases, fuel paid and fuel  inventory periodically to facilitate the resolution of discrepancies among the existing systems. It is of concern that no significant progress has been achieved on these recommendations since the draft report was discussed with Management in January 2014.  Additionally, we believe that implementing these recommendations for stronger internal controls will be instrumental  in  realizing  Management’s  goal  to  achieve  the  100  Best  Fleets  in  North  America recognition in 2015.  Following  is a summary of what we believe are the most relevant observations and recommendations, which we have organized in the areas of tools, rules and people.   TOOLS  Acquisition, disbursement and usage of both fuel and parts  is supported by a robust, multi‐application system, that has the capacity to capture all instances of disbursement of fuel and parts to vehicles and to generate management reports necessary to monitor and control the activity. As a whole, the system is designed to allow management the ability to assure stakeholders that the City  is receiving all of the fuel and parts for which  it  is paying, and to account for their usage at any given point. However, there are certain elements that hinder the system’s full utilization, the most notable being incomplete system parameters and lack of management reports.  Incomplete system parameters   There  is not a single  list of assets or a formal procedure to concurrently update asset  information 

within the three databases. While JDE  is the system of asset records,  independent asset databases exist  in both  FASTER  and GasBoy.  Since  the  three  systems  are not  integrated,  assets have  to be 

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added  or  removed  through  independent  processes.  To  improve,  the  City  needs  to  reconcile  the databases, eliminate any discrepancies and develop an all encompassing procedure going forward.   

Vehicle  parameters  are  not  completely  established  in  GasBoy  or  in  FASTER.  Consequently,  fuel consumption is being monitored at a summary level of total fuel disbursed; detailed consumption by vehicle is not monitored. So far, vehicles have been programmed only with basic information such as asset number, user department, make and model. Detailed usage parameters such as vehicle  fuel capacity, designated driver, type of fuel, maximum fuel disbursement amount, average usage, etc. have  not  yet  been  programmed. Until  this  information  is  available,  the  City  cannot  control  fuel consumption at a detailed level. Fleet expects to have a complete record of all vehicles by the end of 2013. The City should assign a high priority to this task. 

  For Vehicles 2005 and older, which do not have a data reader and mileage  is entered manually at 

the GasBoy’s pump console, Fleet has yet to add a feature to  force the manual entry. Until this  is done,  employees  can  get  fuel without  entering  the mileage.  The  City  should  also  assign  a  high priority to this task. 

While the tanker trucks are equipped with GasBoy equipment, this system was not fully functional 

at  the  time  of  this  project  and  Accounting  was  having  difficulty  gathering  fuel  transfer  data. Management is currently working on correcting these issues. This task should also be designated as high priority. 

 Absence of fuel and parts management reports While  there  are  sufficient mechanisms  to  capture  acquisition  and  disbursement  data,  currently  no reports are being prepared to monitor and control the efficient, effective and economical use of fuel and parts. Without  standard periodic  reports on utilization, anomalies and  trend analysis,  it  is difficult  to assure  that  the  fuel  and  parts  inventory  and  usage  database  information  is  accurate  and  reliable. Incomplete  system  vehicle  parameters  and  absence  of  data  analysis  staff were  cited  as  the  primary causes, and management plans to produce detailed consumption reports in the near future.  As  soon  as  possible  and  once  asset  information  is  complete,  the  City  should  develop  standard monitoring and usage reports to address fuel usage by vehicle and by driver, miles per gallon per vehicle and  by  department; maintenance  type  and  parts’  costs  per  vehicle,  department,  and  time  period, among  others.  Reports  should  also  address  internal  transfers,  generators’  fuel  usage,  golf  carts  fuel usage, and fuel usage  in portable gas containers. Vehicles with unusual readings should be flagged for follow  up.  Additionally,  the  City  should  develop  metrics  that  assess  fuel  and  parts  management performance such as fuel cost per vehicle compared to vehicle age.  RULES  Overall,  the  City  is  lacking  documented  procedures,  including  time  completion  standards  and performance measures,  to  guide  the  activity  of  those  involved  in  fuel  and  parts management,  and ensure that tasks are completed timely and accurately. Timely reconciliation of data and timely entry of records are important areas where formal procedures and standards are needed.     

7 

Rules for timely reconciliations of data  There  is a need to establish procedures for data reconciliations. Since fuel and parts management are supported  by multiple  systems  that  are  not  fully  integrated,  reconciliation  consists  of  a multi‐step process between  the purchases, disbursements, and  inventory, and  is essential. Reconciliation of  the databases  and  interface  reports  is  needed  to  assure  transactions  are  accurately  recorded. Reconciliations occur at various times at various points, for example:    Work orders  for one day’s activity have  to be  reconciled with  the NAPA/FASTER  interface  report, 

prior  to  the  entry  of  the  invoice  into  JDE  to  verify  that  transactions  are  entered  accurately  and completely to FASTER.  

Fleet  reconciles  the GasBoy/FASTER  interface  file  to  the FASTER database daily  to ensure  that all transactions are imported accurately and completely to FASTER.  

Monthly, Fleet  reconciles a  summary extract  from GasBoy prepared by Accounting  to  the FASTER total disbursements for the month, prior to posting transaction in the general ledger. 

Monthly, Accounting reconciles the total available volumes available in GasBoy to the total volume available  in  JDE  for  deliveries,  disbursements  and  transfers.  Fleet  then  reconciles  the  GasBoy information to FASTER records.  

Monthly,  Fleet  reconciles  a  FASTER  billing  summary  report  prepared  by Accounting  of  parts  and labor by department and by asset to FASTER totals for the month, prior to posting transaction in the general ledger. 

 Rules for timely entry of records  Currently, reconciliations are not fully effective primarily due to delays with entering records, the extent of manual entries into the systems, and apparent staff limitations. Timely entry is essential to obtaining all possible revenue from tax reimbursement and from discounts for prompt payment of parts’ invoices. Timely entry  is also key  for accurate  cost allocations.    If all  information  is not promptly entered  into GasBoy, FASTER and JDE, the City cannot fully account for how much fuel was delivered and who used it and  for what purpose at any given point. The City needs  to develop  timeliness standards  for entering records in the pertinent systems, for example:  

‐ Create PO in JDE the day of the delivery. ‐ Receive POs in JDE and in GasBoy at least twice per week. ‐ Enter invoices in JDE twice per week. ‐ Have all monthly transactions in the system by the 5th of the following month. ‐ Fleet agrees the inventory in FASTER with the inventory in JDE by the 5th of the following 

month.  Rules for monitoring NAPA procurements   NAPA has  the authority  to procure parts  that NAPA does not  stock on  the City’s behalf.  In  this  case, NAPA researches vendors and prices, selecting the option that most benefits the City, and adding a mark up  to  the  third party vendor price. The City can  improve cost effectiveness by  implementing periodic analyses of non‐NAPA stocked items, and by requesting NAPA to stock additional parts to avoid mark‐up 

8 

costs. Additionally, the City can improve NAPA’s selection process by giving NAPA access to asset repair and part usage history. The City should also work with NAPA to develop a procedure to track warranties and ensure that the City maximizes their use.   PEOPLE  The organizational structure and staffing  level of Fleet may not be adequate to support the magnitude and complexity of the City’s fuel operation, or to achieve the Fleet goals that the City has established. In addition to the Fleet Manager, the Fleet’s fuel management/administration team consists of one Fleet Superintendent who splits time with fleet services duties, and one Account Coordinator. There are two mechanics temporarily assigned to fuel operational duties and internal fuel distribution. Currently, there is no dedicated staff that is specifically trained to analyze and manage fuel operations.  The  City  should  benchmark  current  Fleet  staffing  levels  against  comparable  jurisdictions. As  needed, increase number of staff or provide training to existing staff in order to meet the demands of City’s fuel operation.  In the future, the City should evaluate the cost‐effectiveness of doing the  internal transfers in‐house versus outsourcing all or part of that activity to the fuel vendors.      

This space left blank intentionally. 

 

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

9

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

GEN

ERAL

Man

agem

ent R

espo

nse:

Th

e fle

et m

anag

emen

t div

isio

n w

ill b

e re

stru

ctur

ing

and

addi

ng

addi

tiona

l sta

ff as

nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to

mee

t the

am

bitio

us g

oals

and

obj

ectiv

es o

utlin

ed in

this

do

cum

ent.

1TheCityhas

documentedpolicies

andproceduresforall

fuelmanagemen

tprocesses.

TheCity’sAdministrativeRegulation(AR)#24,Cityw

ide

FuelManagemen

t,describes

thepolicyandprocedures

governingtheuse

anddistributionoffuelbyCity

vehiclesandeq

uipmen

t.

However,A

R#24isoutdated

asitdoes

notaddress

the

new

fuelmanagem

entsystem

s,GasBoyanditsinterface

withFA

STER

,theCity’sassetmanagem

entsystem

.Also,

certainspecificfuelmanagem

entproceduresarenot

form

allydocumen

ted,asnotedbelow.

Recommendation1

(a)UpdateAR#24(Cityw

ideFuelM

anagemen

t)to

reflectcurrentfuelmanagem

entprocedures.

Includeadditionalproceduresas

recommendedinthisstudy.

(b)Proceduresshouldaddressthetimelyentryof

transactionsinallsystemsthat

supportfuel

managem

entthrough

specifictimestandards.

SeeRecommen

dation5.

(a) T

he c

ityw

ide

fuel

man

agem

ent o

pera

tion

is

curr

ently

bei

ng d

ivid

ed in

to (3

) sep

arat

e op

erat

ions

. (1)

City

wid

e ve

hicl

e/eq

uipm

ent

refu

elin

g. O

pera

tiona

l con

trol

is u

nder

Fle

et

Man

agem

ent.

(2) R

efue

ling

oper

atio

ns fo

r Wat

er T

reat

men

t Pl

ants

and

bac

kup

gene

rato

rs. O

pera

tiona

l con

trol

is

und

er th

e W

ater

Dep

artm

ent.

(3) T

he re

fuel

ing

of st

andb

y ge

nera

tors

loca

ted

at

city

faci

litie

s. O

pera

tiona

l con

trol

is u

nder

Fac

ility

Mai

nten

ance

. AR

#24

is b

eing

upd

ated

to re

flect

thes

e ch

ange

s.

Fleet Manager

A

2TheCitylocatesfuel

atthelowest

reasonablecostand

theCityordersfuelin

theam

ountsneeded

tooptimizethose

costs.

TheCityhas

contractswithtw

ovendorsthat

supplyfuel

intransportquantity

deliveries,atunitpricesbased

on

theData

Transm

issionNetwork

(DTN

)FastRacksAverage

Pricesontheday

ofthedeliveryplusamarkup.

Fuelordersneedto

beplacedinsuch

way

that

the

quantities

ordered

andthenumber

ofdeliveriesremains

withincontractparam

eters;otherwise,theCitycanincur

additionalcosts.Fleetpersonneldesignated

as“Fuel

Managers”

obtainGasBoyfuelreadings

ofthesix

storage

tanks,andrecommen

dthefuelorder

amountby

fueltype.Th

eFleetSuperintenden

treview

sthe

recommendedorder

andadjuststo

meetfuelvendor

contractstipulations.

Recommendation2

Trackandperiodicallyanalyzefuelordersthat

exceed

edcontractstipulationinterm

sofnumber

ofallowed

weeklydeliveries.Based

ontheresults,

refineorderingproceduresto

elim

inateexcess

deliveriesandcostsinthefuture,orrenegotiate

contractrates.

The

Flee

t Div

isio

n is

initi

atin

g pe

riod

ic m

anua

l re

view

s and

will

wor

k w

ith IT

to fi

naliz

e th

e au

tom

ated

pro

cess

.

Fleet Manager

C

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

10

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

3TheCitytakes

advantage

of

availablediscountsas

describedinthe

vendorfuelcontracts.

Curren

tfuelvendorcontractsdonotprovideany

discountsforeven

tssuch

asearlypaymen

ts.

None.

4Thereisadeq

uate

segregationofduties

forfuelordering,

receivingand

paymen

t.

Segregationofduties

fororderingisnotoptimalfor

placingfuelordersandreceivingtheordersintheCity’s

financialmanagem

entsystem

,JDEdwards(JDE),

because

theFleetSuperintendentcurren

tlycompletes

both

tasks.Additionally,theFleet

Superintenden

tisalso

incharge

ofapprovingthedeliveryorder.

Paymen

tisproperlysegregated

totheAccountsPayable

Dep

artm

ent(AP).

Stafflim

itationswerecitedas

theprimaryreasonfor

inadeq

uatesegregationoftheseduties.

Recommendation3

Leverage

newFleetManager

andtheAccount

Coordinatorforbettersegregationofapproval,

orderingandreceivingduties.

Com

plet

ed

Fleet Manager / Purchasing Manager

Completed

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

11

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

5Fuelmanagemen

tand

operationsis

supported

byan

adeq

uate

organizational

structure

andnumber

ofstaff.

Theorganizationalstructure

andstaffinglevelm

aynot

beadequateto

supportthemagnitudeandcomplexity

oftheCity’sfueloperation.Thefollowingissues

were

noted:

Inadditionto

theFleet

Manager,theFleet

Dep

artm

ent’sfuelmanagem

ent/administrationteam

consistsofoneFleetSuperintenden

twhosplitstime

withfleetservices

duties,andoneAccount

Coordinator.Curren

tly,there

isnoded

icated

fuel

managem

entandanalysispersonnel.

Therearetw

omechanicscurren

tlyassigned

tosupportfueloperationalduties,such

asobtaining

storage

tankfuelreadings

andrecommen

dingfuel

order

amounts;they

arealso

incharge

ofthe

internaldistributionoffuelusingthetankertrucks.

Thisassignmen

tappearsto

take

attentionfrom

their

core

mechanicduties

andpotentiallycreatesa

backlog.

Recommendation4

(a)Ben

chmarkthestaffing(typeandnumber)

levelsthat

supportfueloperationsagainst

comparablejurisdictions.Asneeded

,increase

number

ofstaffortrainexistingstaffinorder

tomeetthedem

andsofCity’sfueloperation.

(b)Inthelongterm

,theCityshouldevaluatethe

cost

effectiven

essofdoingtheinternal

transfersin

house

versusoutsourcingthat

duty

tothefuelvendorswhile

leavingroom

forself

distributionincasesofemergency.

(a) T

he F

leet

Div

isio

n ha

s pla

ns to

recl

assi

fy a

w

elde

r fab

rica

tor p

ositi

on in

to a

fuel

tech

pos

ition

.

(b) C

ompl

eted

. Fue

l is d

eliv

ered

to ta

nks b

y fu

el

vend

or.

Fleet Manager Fleet Manager

Completed

6Fuelordering,

transfersand

disbursem

entsare

centralized

.

Fuelordering,transfersanddisbursementsare

centralized

city

wideundertheFleetManagem

ent

Dep

artm

entas

supported

bytheGasBoysystem

.No

fuelpurchases

aremadewithcred

itcards,unlessthe

purchaseisassociated

withtravel.Thissettingfosters

accountability

andpromoteseconomiesofscale.

None.

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

12

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

FINANCIALDATA

INTEGRITYANDRELIABILITY

7Computerized

system

sareinplace

toautomatically

capture

fuelinventory

dataandminim

ize

human

error.

Fuelmanagemen

tissupported

byGasBoy,aweb

based

inventory

managem

entsystem

forfuelvolume(gallons).

GasBoycapturesdataonfuelinfluxanddisbursem

ents

through

electroniceq

uipmen

tinstalledonCityfuel

tanks,veh

iclesandequipmen

t.Mostvehicles(about92%)areeq

uipped

withafuelring

andadatareader

(odometerreader),that

operatein

conjunctionwiththeem

ployeeID

badge,program

med

inGasBoyto

allowandcontrolfueldisbursem

ent.For

vehicles2005andolder,odometer

readingiscaptured

bythedrivermanuallyen

teringthemileageinaGasBoy

controllerlocatedat

thepumpandfuelisnotdisbursed

ifthemileageisnoten

tered.Storage

tanks

arealso

equipped

withafuelringplusaGasBoyautomatictank

gauge

console,w

hichprintsinventory

amounts

containedinthetanks.Theonlytw

ofuelactivity

centers

noteq

uipped

withGasBoyinstrumentsarethetw

odyed

dieselstorage

tanks

(FST1andFST2)locatedat

theFleet

compound,thestorage

tanklocatedat

theCitymarina,

andtheCity’sgenerators,allofwhicharemanually

“sticked

”(seealso

IC#19).

TheCityalso

usesFA

STER

aweb

based

asset

managem

entsystem

that

tracks

fuelconsumption,

automotive

partsandlaborbyvehicle/asset.G

asBoyand

FASTER

areintegratedthrough

acomputerinterfacethat

allowsdailyuploadsofGasBoyrecordsinto

FASTER

of

fueldistributedfrom

thepumpsandtankertrucksto

the

vehicles/assets.

None.

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

13

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

8Manualprocesses,

especially

relatedto

interfaces

betw

een

theexistingsystem

s,arelim

ited

.When

necessary,thereare

sufficientchecks

and

balancesto

ensure

integrityoffinancial

andoperatingdata.

Thethreesystem

ssupportingfueloperations–GasBoy,

FASTER

andJDE,arenotfully

integratedandtherefore,

thereissomenecessary

duplicationandinform

ation

that

has

tobeen

teredmanually.However,

managem

enthas

putinto

place

compensatingcontrols

toen

sure

dataintegrityan

dthat

thethreedatabases

reconcileas

described

inIC#17and#34,below.

Specifically:

Fuelpurchaseorders(POs)arecreatedmanuallyin

JDEbecause

thefuelhas

tobechargedat

theprice

ontheday

ofthedelivery,nottheprice

ontheday

thedeliveryorder

was

placed(seealso

IC#17).

JDEdoes

notinterfacewithGasBoytherefore,fuel

transactionsareextractedfrom

GasBoyandmanual

postings

ofdeb

itsto

thebusinessunitsandcred

its

tothefuelinventory

aresubsequentlymadeinJDE

(seealso

IC#31).

Since

GasBoydeliverieshaveto

beassociated

with

JDEpurchaseordersto

enablereconciliations,PO

inform

ationhas

tobedoubleen

teredinto

both

JDE

andGasBoy.POinform

ationisen

teredinGasBoy

againstdelivery

orders,created

inGasBoy(seealso

IC#17).

None.

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

14

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

9Transactiondatafor

theacquisitionand

disbursem

entoffuel

iscapturedinthe

City’sgeneralledger

accuratelyand

completely.

While

thefinancialmanagem

entsystem

,JDE,does

not

interfacewithGasBoyorwithFA

STER

,managem

enthas

established

checks

andbalancesto

ensure

integrityof

financialdataandaccuracy

ofthegeneralledger.

Specifically,acquisitionsarerecorded

inJDEwhenthe

fuelorder

isreceived

;disbursem

entsarerecorded

inJDE

viamonthlymanualpostings

inthegeneralledgerof

dataextractedfrom

GasBoybutonlyafterithas

been

reconciledwithFA

STER

records.

Curren

tlythere

isan

issueinthat

thePOsarenotinJDE

intimeforwhen

theFleetSuperintenden

tshouldenter

those

POsto

GasBoy.To

getby,theFleet

SuperintendentandITSagreed

totemporarilyassign

the

invoicenumberto

GasBoydeliveriesandsubsequen

tly

replace

withthePOnumberswhen

available.

Recommendation5

(a)Im

mediately,m

akethetimelyen

tryof

transactionsinto

thesystem

sapriority.

Developproceduresincludingtimestandards

toen

sure

that

alltransactionsarepromptly

recorded

inthesystem

s.Forexam

ple:

CreatePOinJDEtheday

ofthedelivery.

ReceivePOsinJDEandinGasBoyat

leasttw

iceweekly.

EnterinvoicesinJDEtw

iceper

week.

Haveallm

onthlytransactionsinthe

system

bythe5thofthefollowing

month.

Fleetagrees

theinventory

inFA

STER

withtheinventory

inJDEbythe5thof

thefollowingmonth.

Auditorconsidersthisrecommen

dationis

criticalinen

suringthat

acquisitionand

transactiondataiscapturedaccuratelyand

completely.

(b)Consider

aprocedure

totimestam

ptransactionsto

monitortimelydataen

try.

(c)To

reduce

therisksrelatedto

theam

ountof

manualentries,managem

entshouldwork

toiden

tifywaysto

automateorinterfacethese

entriesto

avoidtheinefficien

cyandrisk

of

errorsresultingfrom

duplicativemanualen

try.

Flee

t res

pons

e:(a

, b, &

c) T

he fl

eet m

anag

emen

t div

isio

n w

ill b

e re

stru

ctur

ing

and

addi

ng a

dditi

onal

st

aff a

s nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he a

mbi

tious

goa

ls

and

obje

ctiv

es o

utlin

ed in

this

doc

umen

t.

The

Flee

t Div

isio

n is

initi

atin

g pe

riod

ic m

anua

l re

view

s and

will

wor

k w

ith IT

to fi

naliz

e th

e au

tom

ated

pro

cess

.

ITS

resp

onse

:(b

) Bo

th J

DE

and

Gas

Boy

time-

stam

p tr

ansa

ctio

ns. W

e pr

ovid

ed F

leet

with

a n

ew

Custo

m Q

uery

repo

rt on

Jul

y 23

, 201

4 –

the

“Fue

l O

rder

/Del

iver

y Au

dit R

epor

t” th

at th

at d

ispl

ays

days

diff

eren

ce b

etw

een

Requ

est &

Del

iver

y Dat

es;

betw

een

Del

iver

y and

Gas

Boy P

O E

ntry

; and

be

twee

n D

eliv

ery D

ate a

nd JD

E Re

ceip

t Dat

e.

(c) W

e m

et w

ith A

ccou

ntin

g an

d Fl

eet o

n 5/

29/2

014

to th

orou

ghly

disc

uss o

ptio

ns fo

r in

tegr

atio

n be

twee

n G

asBo

y an

d JD

E. T

here

is n

o be

nefit

in p

ursu

ing

this

at t

his t

ime.

We

are

wor

king

w

ith F

aste

r to

upgr

ade

to th

e ve

rsio

n 6.

2.26

by

the

end

of A

ugus

t.. W

e w

ere

advi

sed

by th

e Fa

ster

CEO

on

7/2

8/20

14 th

at th

e “T

anks

” m

odul

e, h

eret

ofor

e pr

omis

ed fo

r rel

ease

6.3

, is i

ndef

inite

ly d

elay

ed.

The

Tank

s mod

ule

is a

n in

tegr

al fe

atur

e of

the

Clie

nt S

erve

r ver

sion

but

was

dro

pped

in th

eir n

ew

web

pro

duct

.

ITS ITS Fleet Manager

10/15/2014 6/15/2014 C A

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

15

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

10

Fuelinventories

are

periodicallyverified

bycomparing

amountsto

financial

andoperational

recordsto

ensure

integrityofthedata

andpreventloss.

Aprocessisinplace

toperiodicallyreconciletheGasboy

andFA

STER

fuelinventory

databases

tothefinance

database(JDE).D

ifferencesarepromptlyinvestigated

andresolved

.

Reconciliationsofdatawithinthethreesystem

soffuel

purchases,fuelpaidandfuelinventory

arecompleted

everymonth

through

amultistep

processinvolvingthe

threesystem

s.After

themonthlycostallocationis

completed(seeIC

#31),theAccountingDep

artm

ent

agrees

thetotalvolumeavailableinGasBoyto

thetotal

volumeavailableinJDEfordeliveries,disbursem

ents

andtransfers.

Thisinform

ationisthen

submittedto

Fleetto

agreeto

thetotalgallonsdisbursed

inFA

STER

.

AsofJune30,2014,theAccountingDep

artm

ent

continues

toberesponsibleforthereconciliationofall

thedata,andFleethas

notbegunto

perform

the

reconciliationsofthefueldisbursed

inFA

STER

.

Recommendation6

(a)Especially

untilthefuelm

anagem

ent

proceduresconsolidate,perform

reconciliationsweeklyorbiweeklyto

facilitate

theresolutionofdiscrep

ancies

anddevelop

confiden

ceintheprocess.

(b)Ensure

that

reconciliationsoffuelpurchases,

fuelpaidandfuelinventory

arecarriedout

timelyandaccuratelybydeveloping

proceduresforen

tryandvalidationofdata

withinthesystem

s,such

aschecklists.

Auditorconsidersthisrecommen

dationis

criticalinen

suringdataintegrityand

preventingloss.Fleet

shouldstartperform

ing

thereconciliationsoftheFA

STER

disbursem

entsim

med

iately.

(a &

b) T

he fl

eet m

anag

emen

t div

isio

n w

ill b

e re

stru

ctur

ing

and

addi

ng a

dditi

onal

staf

f as

nece

ssar

y pe

r CM

’s p

ropo

sed

Budg

et in

ord

er

to m

eet t

he a

mbi

tious

goa

ls a

nd o

bjec

tives

ou

tline

d in

this

doc

umen

t.

The

Flee

t Div

isio

n is

initi

atin

g pe

riod

ic m

anua

l re

view

s and

will

wor

k w

ith IT

to fi

naliz

e th

e au

tom

ated

pro

cess

.

Fleet Manager

C A

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

16

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

11

Proceduresarein

place

toreviewthe

GasBoy/

FASTER

interfacedaily

transm

issionfilesto

verifythat

thedata

was

transm

itted

accurately.

FleetreceivedandstartedusingtheGasBoy/FA

STER

interfacemoduleonNovember

13,2013.A

tpresent,the

Inform

ationTechnology

Services

departm

ent(ITS)isin

theprocessofassistingFleet

withvalidatingthat

transactionsarecomingovercorrectly,anddetermining

ifanyadditionalstandardprocedures/controls

needto

beim

plemen

tedto

ensure

accuracy.

AsofJune30,2014,ITS

isnolongerperform

ingthisrole

andFleet

isfully

responsibleforvalidatingaccuracy

of

transactionscomingovertheGasBoy/FA

STER

interface.

However,ITS

iswritingcertainreportsfortheFleet

Manager

tosupportthisprocess.

Recommendation7

Asneeded

,andincoordinationwithITS,develop

form

alproceduresformanaginginterface

transm

issionlogs,alongwithadescriptionof

commonerrorsandcourseofactionwhen

anomaliesaredetected

,includingnotificationto

theFleetManager.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in

orde

r to

mee

t the

am

bitio

us g

oals

and

ob

ject

ives

out

lined

in th

is d

ocum

ent.

The

Flee

t Div

isio

n is

initi

atin

g pe

riod

ic m

anua

l re

view

s and

will

wor

k w

ith IT

to fi

naliz

e th

e au

tom

ated

pro

cess

.

Fleet Manager

C B

12

Policiesand

proceduresarein

place

toperiodically

inspectandcalibrate

tankandvehicle

monitoring

equipmen

tcapturing

fuelinventory

data.

Inspectionandcalibrationwas

doneat

thetimethenew

equipmen

twas

dep

loyedinJuly2013andwillbedone

onayearlybasis,every

August.

Recommendation8

Documen

tannualinspectionandcalibrationof

tankandvehiclemonitoringeq

uipmen

tthrough

awritten

procedure.

Agre

e

Fleet Manager

B

13

Allaccessportsfor

undergroundstorage

tanks,backup

generatorsand

outsidegasolinetanks

areproperlylocked

.

Outsidestorage

tanks

havefencesaroundthem

,butare

generallynotlocked

.Storage

tanks

atEverestarelocked

andaCityidentificationbadge

isneededto

accessthem

.FleetServices

tanks

areinafencedinareathat

islocked

afternorm

albusinesshours.Large

backupgeneratorsat

CityHall,Em

ergency

OperationsCen

ter(EOC)andPolice

areinsecure

areasandlocked

.

None.

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

17

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

14

EmployeeID

badges

arepromptly

activatedor

deactivated

from

the

GasBoysystem

for

new

andterm

inated

employees.

While

aprocessisinplace

toactivate

ordeactivatenew

orterm

inatedem

ployees

from

GasBoy,itisnotform

ally

documented.

Recommendation9

(a)IncoordinationwiththeHuman

Resources

Dep

artm

ent,expandtheStatusChangeform

toincludeFleet

authorizationandfuelusage

param

eters.Similarly,fleetmattersshouldbe

included

inem

ployeeexitprocedures.

(b)Periodically,produce

areportofallCity

employees

withfuelacquisitionrightsand

distribute

toCitydepartm

entsto

validate

and/oriden

tifyem

ployees

that

shouldno

longerhavefuelacquisitionrights.

(a &

b) T

he fl

eet m

anag

emen

t div

isio

n w

ill b

e re

stru

ctur

ing

and

addi

ng a

dditi

onal

staf

f as

nece

ssar

y pe

r CM

’s p

ropo

sed

Budg

et in

ord

er

to m

eet t

he a

mbi

tious

goa

ls a

nd o

bjec

tives

ou

tline

d in

this

doc

umen

t.

Fleet Manager

C

15

Thecity

has

established

administratorrights

forem

ergency

situationsto

override

thestandard

disbursem

entprocess

usingemployeeID

badges.Policiesexist

tocontrolthis

process.

While

thereareadministratorrightsestablished

for

emergency

situations,there

arenospecificdocumen

ted

policiesthat

describetheiruse.

Recommendation10

Form

alizepoliciesandproceduresto

use

administratorrightsforem

ergency

situationsto

overridethestandarddisbursem

entprocess.

Agre

e

Fleet Manager

B

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

18

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

16

Aninternaltraining

program

onfuel

managem

entand

updates

tothesystem

isinplace

and

provided

tonewor

existingem

ployees

asneeded.

Curren

tlythere

isnotan

internaltrainingprogram

on

fuelmanagemen

tandupdates

tothesystem

inplace.

Recommendation11

Developan

internaltrainingprogram

onfuel

managem

entandupdates

andprovideitto

new

orexistingem

ployees

asneeded.

This

will

be

deve

lope

d on

ce th

e fu

el te

ch is

in p

lace

an

d tr

aine

d.

Fleet Manager

C

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

19

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

FUEL

ORDER

INGANDVEN

DORDELIVER

Y

17

Purchaseordersare

createdaccurately

andtimely.

ThereisablanketPOinplace

foreach

fuelvendor

againstwhichindividualPOsarecreatedas

vendorfuel

deliveriesaremadeper

theCity’srequest.

ThePOassociated

toeachdeliveryorderiscreatedin

JDEafterthefuelisdelivered

because

fuelprice

fluctuates

dailyandthePOispricedaccordingto

the

price

thedateofthedelivery.

Daily,A

ccountsPayablereceives

from

thefuelven

dor

andsubmitsto

theFleetAccountCoordinatortheData

Transm

issionNetwork

(DTN

)FastRacksAveragePrices.

TheAccountCoordinatorusesthisinform

ationto

manuallycomplete

anExcelPricingWorksheetto

generatetheprice

fortheorder

delivered

.Subsequently,

theAccountCoordinatorcreatesthePOinJDEby

manuallyen

teringtheorderam

ountandprice.

Theprice

calculationmadebytheAccountCoordinator

isvalidated

bytheFleet

Superintendentbefore

receiving

thePOinJDE.

POinform

ationisalso

enteredinGasBoyinorder

toassociatePOsinJDEandinGasBoyandto

allowmonthly

reconciliationsbetween

thesystem

s.

SeeRecommen

dation5,above.

Recommendation12

Continueto

retrieve

theDTN

FastRacks

Average

pricesinform

ationandconsider

shiftingthisduty

from

APto

theFleetAccountCoordinator.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in o

rder

to

mee

t the

am

bitio

us g

oals

and

obj

ectiv

es o

utlin

ed in

th

is d

ocum

ent.

Purchasing Manager

B

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

20

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

18

Fuelvendordeliveries

areverified

toen

sure

that

theam

ount

ordered

istheam

ount

received

.

Ven

dorsdeliver

fueldirectlyto

storage

tanks

(whichare

also

pumpstations),tocertaingeneratorsandto

the

City’sthreetankertrucks.Upondelivery,thedesignated

“FuelManagers”

comparevendordeliveryreceiptto

GasBoyautomatictankgauge

consolereceipt.

Additionally,priorto

receivingtheorderinJDEtheFleet

SuperintendentreconcilesPOinform

ationwithdelivery

receipt(seealso

IC#29).

Recommendation13

Consider

developingaprocedure

toform

alizethe

comparisonofthevendor’sdeliveryreceiptsto

aGasBoyreceiptperform

edbythe“Fuel

Managers”,andto

reportanydiscrepancies

overa

pre

established

variationthreshold.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in

orde

r to

mee

t the

am

bitio

us g

oals

and

ob

ject

ives

out

lined

in th

is d

ocum

ent.

The

Flee

t Div

isio

n is

initi

atin

g pe

riod

ic m

anua

l re

view

s and

will

wor

k w

ith IT

to fi

naliz

e th

e au

tom

ated

pro

cess

.

Fleet Manager

C A

19

Proceduresarein

place

tomanually

“stick”(ormeasure)

before

andaftereach

deliveryto

ensure

the

deliveryam

ountis

withinthe3%

difference

allowed

dueto

temperature.

Thetw

odyeddieselstorage

tanks

(FST1andFST2)

locatedat

theFleetcompoundandthestorage

tank

locatedat

theCitymarinaaremanually“sticked

”because

they

arenoteq

uipped

withGasBoyreaders.

Fleetplansto

installreadersinFST1

andFST2

inthenear

future;themarinafuelingactivity

willlikelyendinMarch

2014.Citygeneratorsarealso

manually“sticked

”since

they

arenoteq

uipped

withdatareaders.

Recommendation14

Rep

lace

manual“sticking”

procedure

with

automated

readings

wherever

itiseconomically

pertinent.

The

(7) v

ehic

le/e

quip

men

t ref

uelin

g ta

nks w

ithin

th

e ci

ty a

lrea

dy h

ave

auto

mat

ed ta

nk g

augi

ng

equi

pmen

t.

Fleet Manager

Today

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

21

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

FUEL

DISBURSEMEN

TANDTR

ACKING

20

TheCitycanaccount

fortheusage

ofall

fuel.

Exceptforthetw

odyedfueltanks

locatedintheFleet

compoundandonefueltanklocatedat

themarina,all

storage

tanks,transfer

trucks,gaspumps,gascells,and

vehicles(includingboatsandgolfcarts)areeq

uipped

withGasBoyeq

uipmen

tthat

continuallycollectsfuel

acquisitionanddisbursem

entactivity.W

hile

thetanker

trucksareequippedwithGasBoyeq

uipmen

t,thissystem

was

notfully

functionalat

thetimeofthisprojectand

Accountingwas

havingdifficultygatheringfueltransfer

data.Managemen

twas

workingoncorrectingtheissues.

When

ever

thereisGasBoyeq

uipmentoffline,uponlog

onthedesignated

managercanseeawarningflashing

onandoffinform

ingthat

astationisoffline.

Aslongas

theinform

ationispromptlyen

teredinto

JDE

andGasBoy,theCityhas

theability

toaccountforhow

much

fuelwas

delivered

andwhouseditandforwhat

purpose

atanygivenpoint.

SeeRecommen

dation5,above.

SeeRecommen

dation17(a)below.)

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

22

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

21

Adeq

uatecontrols

existto

govern

the

use

offuelinvehicles

andallinstancesof

disbursem

entto

vehiclesarerecorded

.

Onlyvehicles,assets(i.e.,storage

tanks,gen

erators),and

employees

program

med

inGasBoycanacquirefueland

thesystem

automaticallyrecordseveryinstance

of

disbursem

ent.

Exceptforvehicles2005andolder,fuelis

onlydispen

sedwiththeexactcombinationofthevehicle

datareader,fuelring,andtheem

ployee’sID

badge,all

program

med

inGasBoyto

allowtheem

ployeeto

dispen

sefuel.Datafor2005andolder

vehiclesis

capturedbythedrivermanuallyenteringthemileagein

theGasBoycontroller.

However,w

hile

therearesufficientandreliable

mechanismsto

capture

disbursem

entdata,thereareno

clearlydefined

managem

entreportsto

allowcontinuous

monitoringandcontroloffuelusage.

Recommendation15

(a)Assoonas

possible,developstanding

managem

entreports(based

ondefined

metrics)to

allowadeq

uatemonitoring,tren

danalysis,andcontroloffuelusage.

(b)Establishmechanisms,tren

danalysis,and

metrics

tomonitortheaccuracy

ofthemileage

manuallyen

teredbythedriverforvehicles

2005andolder.

(a &

b) T

he fl

eet m

anag

emen

t div

isio

n w

ill b

e re

stru

ctur

ing

and

addi

ng a

dditi

onal

staf

f as

nece

ssar

y pe

r CM

’s p

ropo

sed

Budg

et in

ord

er

to m

eet t

he a

mbi

tious

goa

ls a

nd o

bjec

tives

ou

tline

d in

this

doc

umen

t.

Fleet Manager

C

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

23

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

22

TheCitymonitors

FASTER

dataonfuel

consumptionper

vehicleto

ensure

consumptionstays

withinreasonable

levelsandreduce

the

risk

ofloss.

Curren

tly,fuelconsumptionismonitoredat

asummary

leveloftotalfueldisbursed;d

etailedconsumptionby

vehicleisnotmonitored.Sofarvehicleshavebeen

program

med

inFA

STER

onlywithbasicinform

ationsuch

asassetnumber,userdep

artm

ent,makeandmodel.

Detailedusage

param

eterssuch

asvehiclefuelcapacity,

designateddriver,typeoffuel,m

axim

um

fuel

disbursem

entam

ount,averageusage,etc.havenotyet

beenprogram

med

.

Fleetexpectsto

haveacomplete

record

ofallveh

iclesby

theen

dofthecalendar

year.U

ntilthisiscompleted,

inform

ationto

optimallycontrolfuelconsumption

cannotbegenerated

.Fleetisalso

intheprocessof

manuallyaddingafeature

toeveryvehicle(2005and

older)that

does

nothaveadatareader

that

forces

the

manualentryofthemileage.Untilthisisdone,

employees

cangetfuelwithoutenteringthemileage.

Managemen

tplansto

produce

detailedconsumption

reportsinthenearfuture.

Recommendation16

Assoonas

possible,program

FASTER

with

complete

assetinform

ationto

allowad

equate

monitoringandcontroloffuelusage.M

onitoring

reportsshouldaddressinternaltransfers(seeIC

#23),generators’fuelusage

(seeIC

#25),golfcarts

fuelusage

(seeIC

#26),andportablegas

containers(seeIC

#27).

Inform

ationto

bemonitoredcanincludefuel

usage

byvehicleandbydriver,milespergallon

per

vehicle,“user”dep

artm

ent,timeperiod,

odometer

inform

ation;fuelcostper

vehicle

compared

tovehicleage.

Veh

icleswithunusual

readings

shouldbeflaggedforfollow.

The

Flee

t Div

isio

n is

cur

rent

ly e

valu

atin

g th

e pr

oces

s. Fu

ll im

plem

enta

tion

shou

ld ta

ke p

lace

w

ithin

the

next

12

mon

ths.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in o

rder

to

mee

t the

am

bitio

us g

oals

and

obj

ectiv

es o

utlin

ed in

th

is d

ocum

ent.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in o

rder

to

mee

t the

am

bitio

us g

oals

and

obj

ectiv

es

outli

ned

in th

is d

ocum

ent.

Fleet Manager

C C B

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

24

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

23

Controlsexistto

accuratelytrackfuel

duringinternal

transfersintanker

trucks.

TheCityusesthetankertrucks(oneforeach

typeof

fuel)to

internallytransfer

fuelfrom

thestorage

tanks

tothepumpslocatedat

each

fire

station(5),to

certain

generators,andto

thegolfcourseto

replenishthegolf

cars.Monthly,A

ccountingagrees

thetransfersas

part

ofthetotalreconciliationoftotalvolumeavailablein

GasBoyandJDE.

While

thetankertrucksareeq

uippedwithGasBoy

equipmen

t,thissystem

was

notfully

functionalat

the

timeofthisprojectandAccountingwas

havingdifficulty

gatheringfueltransfer

data.Managem

entwas

working

oncorrectingtheissues.

Recommendation17

(a)Resolvetheissues

relatedto

tankertruck

GasBoyeq

uipmen

tas

soonas

possible.

(b)Developstandardreportsto

continually

monitorinternalfueltransfers.

Com

plet

ed

Fleet Manager

24

GPStracking(orother

features)isinplace

fortheinternal

distributiontrucks.

Trackingdatais

continually

monitored.

TheCitydoes

notuse

GPStrackingfortheinternal

distributiontrucks.

None.

25

Adeq

uatecontrols

existto

govern

the

use

offuelinnon

vehicleeq

uipmen

t,such

asgenerators.

Gen

eratorsareeq

uippedwithGasBoy

Recommendation18

Developstandardreportsto

continuallymonitor

fuelused,andrelatedtrends/metrics,inCity

generators.

Faci

litie

s Man

agem

ent r

espo

nse:

All

City

ge

nera

tors

are

exe

rcis

ed re

gula

rly

and

fuel

leve

ls

are

reco

rded

mon

thly

.

FacilitiesManagement

05/21/2014

26

TheCitytracks

individualgolfcart

fuelusage.

Golfcartfuelusage

istrackedthrough

gasrings

installed

ineverygolfcart.

Recommendation19

Developstandardreportsto

continuallymonitor

fuelused,andrelatedtrends/metrics,inCitygolf

carts.

Flee

t will

revi

ew th

e fe

asib

ility

of t

his r

eque

st. G

olf

cart

s and

oth

er sm

all e

quip

men

t are

com

mon

ly

equi

pped

with

pla

stic

fuel

tank

s. It

is v

ery

diffi

cult

to m

ount

the

Gas

Boy

fuel

ring

to th

is ty

pe o

f eq

uipm

ent.

Fleet Manager

B

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

25

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

27

Recordsforfuel

dispen

sedthrough

portablecontainers

(gas

cans)are

maintainedand

disbursem

entcontrols

areadeq

uate.

Each

operatingdep

artm

entisassigned

threedifferent

assetnumbers,oneforeachfueltype.Multipleportable

containers(gas

cans)aregrouped

together

andassigned

oneassetnumber.Theindividualfillingthecontainers

musttypeintheassetnumber

intheGasBoycontroller

locatedat

thepumpbefore

itwilldispen

sefuel. There

isarestrictiononthetotalgallonsdispen

sedandthefuel

typedispen

sedbased

ontheassetnumber.

While

dataonthetotalgallonsdispen

sedistracked

withinthesystem

,therearenostandingreportsto

continuallytrackthisinform

ation.

Recommendation20

Improve

controlsondisbursem

entsto

gascansby

developingstandardmonitoringreportsforthese

assets.Set

alim

itto

thenumber

ofgallonsan

“asset”canuse

inamonth/w

eek/day

forthe

averageconsumptionusage.U

sehistoricdata

analyses

tomakethisdeterm

ination.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in o

rder

to

mee

t the

am

bitio

us g

oals

and

obj

ectiv

es

outli

ned

in th

is d

ocum

ent.

Fleet Manager

B

28

TheCitymaintainsa

singlelistofassets,

andthereisa

consisten

tprocessfor

addingassetsto

the

existingdatabases.

While

JDEisthesystem

ofrecord

forCityassets,

indep

endentassetdatabases

also

existinboth

FASTER

andGasBoy.Since

thethreesystem

sarenotintegrated

,assetshaveto

beadded

orremovedthrough

indep

endentprocesses.

TheFinance

Accountantisresponsibleforaddingand

retiringassetsfrom

JDE.

TheFleet

Superintenden

tis

responsibleforaddingandretiringassetsfrom

FASTER

andGasBoyuponnotificationfrom

theFinance

Accountant.

Theassetsinthethreedatabases

havenotbeen

reconciledsince

FASTER

’sinceptioninOctober

2012.

Accordingto

staff,discrep

ancies

existbetweenthethree

databases.

Recommendation21

(a)Utilizeadataanalysistoolsuch

asIDEA

toiden

tifydiscrep

ancies

betweentheJDE,

FASTER

andGasBoyassetdatabases.U

seresultsto

correctdatabases,oraddress

reconciliationdiscrepancies.

(b)Developaform

alprocedure

toconcurrently

inputnew

assetsandremove

oldassetsfrom

GasBoyandFA

STER

immediatelyafterthey

are

updatedinJDEto

ensure

thedatabases

maintainthesameinform

ation.

(a) F

leet

is c

urre

ntly

con

duct

ing

a ha

nds-

on re

view

of

eve

ry a

sset

with

in th

e ci

ty.

(b.)

This

pro

cess

will

be

deve

lope

d af

ter t

he

adm

inis

trat

ive

secr

etar

y po

sitio

n is

fille

d.

Fleet Manager

B B

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

26

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

VEN

DORPAYMEN

TPROCESSING

29

Purchasepricesand

quantities

received

areverified

before

paymen

tisapproved.

Priorto

receivingthedeliveryinJDEandinGasBoy,the

FleetSuperintendentverifies

theprice

established

by

thevendorbyreview

ingthePOpricingsheetcreatedby

theAccountCoordinatorusingDTN

FastRacks

prices.

FleetSuperintendentalso

verifies

amountsordered

and

received

bycomparingthePOwiththevendorand

GasBoyreceipts.

None.

30

Inform

ationrequired

toprocessinvoices

iscomplete,accurate

andauthorized.

Priorto

enteringinvoices

into

JDE,theAccount

Coordinatorperform

sathreeway

match

ofinvoice,PO

anddeliveryreceipts.Additionally,A

Pspotchecks

invoicetransactionslookingbyfordifferencesbetween

what

was

received

andinvoiced

priorto

postingthe

payablesto

thegeneralledger.

None.

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

27

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

FUEL

COST

ALLOCATION

31

Proceduresarein

place

toen

sure

that

fuelcostsare

accuratelyandtimely

allocated(charged

back)to

user

dep

artm

ents.

Monthly,theAccountingDep

artm

entextracts

consolidated

disbursem

entvolumeinform

ationfrom

GasBoyandsummarizes

theinform

ationbybusiness

unit(userdepartm

ents).To

talsarethenposted

manuallyto

JDEbutonlyaftertheFleetSuperintendent

confirm

sthat

theam

ountsarethesameas

FASTER

’stotaldisbursem

entsforthemonth.PostinginJDE

consistsofdebitsto

bebusinessunitsandcreditsto

the

inventory

oftotalgallonsusedforthemonth.

JDEcalculatescostbased

ontheweightedaverageofall

thefueldeliveriespaidduringthemonth,inform

ation

that

iscapturedwhen

thedeliveryisreceived

inJDE.

Thekeyto

timelyandaccurate

fuelcostallocationisto

ensure

that

Fleetreceives

fuelpromptlyinJDE,andthat

invoices

arealso

promptlyprocessed

andsubmittedto

AP.

SeeRecommen

dation5,above.

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

28

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

32

Fuelpurchases

are

periodically

reconciledto

the

costsallocatedto

user

dep

artm

ents.

Differencespromptly

researched

and

clarified.

Fleetmanagemen

tisdecentralizedandfuelmonitoring

practices

may

notbeconsisten

tam

onguser

dep

artm

ents.Curren

tly,departm

entsdonothaveaccess

toFA

STER

;also,therearenostandingperiodicreports

availableto

userdep

artm

entsto

monitorfuelusage

data

such

asfuelusage

byvehicleandbydriver,fuelusage

tren

ds,comparisonto

previousyears,andcost

comparisons.

Dep

artm

entsdoreceivemonthlycostallocation

inform

ation;however,since

dep

artm

entsdonothave

accessto

FASTER

,they

donothavethemeansto

comparetheallocationsmadebyAccountingto

FASTER

records.

Recommendation22

Provideuserdep

artm

entsview

ingaccess

toFA

STER

.Developstandingutilizationand

exceptionreportsanddevelopform

alprocedures

foruserdep

artm

entsto

accessthose

reportsand

review

keydatato

iden

tifyanomalies,anddiscuss

relevantfindings

withFleet.Th

iswillallowFleet

customersto

track,monitorandmanagefuelcosts

bylookingat

reportsthat

showutilization,fuel

consumption,billingrecordsandwork

orders.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in o

rder

to

mee

t the

am

bitio

us g

oals

and

obj

ectiv

es

outli

ned

in th

is d

ocum

ent. .

Fleet Manager

C

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

29

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

33

Taxreim

bursem

ent

returnsforcityvehicle

consumptionare

prepared

and

submittedtimelyto

Florida'sDep

artm

ent

ofReven

ueinatimely

manner.

Onamonthlybasis,theCityshouldrequesta

reim

bursementfrom

theStateofFloridaontaxespaid

forpurchases

ofdieselandunleaded

fuel.

Toobtainallpossiblerevenue,allfuelprocuremen

tsneedto

beincludedinthemonthlyfueltaxreturn.To

achieve

this,allfueltransactionsforthemonth

needto

beinJDEandGasBoynolaterthan

thefirstweekofthe

followingmonth.O

therwise,an

amendedreturn

has

tobefiled,w

hichcausesinefficien

cy.Accordingto

AccountsPayableManager,taxreim

bursem

ent

reportingwas

beh

indas

ofNovember

26andthestate

has

contactedtheCitytw

iceto

followup.

SeeRecommen

dation5,above.

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

30

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

DATA

BASE

ANDSYSTEM

SECURITY

34

Changesto

the

GasBoysystem

databases

are

properlyauthorized.

TheCity’sInform

ationTechnology

Services

(ITS)

dep

artm

enthas

aform

alprocedure

(Procedure

No.IT

SS04)to

govern

changesto

databases

andapplications.

AllchangesmustberequestedinadocumentedRequest

forChange

form

,followthemultilevelapprovalprocess,

andbemanaged

bytheChange

Advisory

Board.

Changesto

GasBoyaregoverned

bythispolicy.

Ofnote

isthat

therewere

certainissues

withthe

selectionandim

plemen

tationofGasBoywhereb

ytheprocesswas

notsupported

byareview

committeeoraclear/defined

evaluationand

selectionprocess.Additionally,w

hile

ITS

participated

inthedraftingofthesystem

requirem

ents,ITS

had

limited

involvem

entinthe

evaluationandselectionoftheapplication.

Recommendation23

Goingforw

ard,sen

iorCitymanagem

entshould

ensure

that

softwareselectionand

implemen

tationbedirectedbyareview

committeeoraform

alselectionprocessthat

involves

keystakeh

olders,includingITS,startingat

theearlystages.Such

processshouldinclude

form

altrackingofrisksandissues

throughoutthe

entire

process.

Agre

e

35

Proper

mechanisms

areinplace

for

establishingGasBoy

system

users.

TheCityhas

aform

alprocedure

(Procedure

No.IT

DS5.3

01)to

govern

useraccessrights.A

nITSNew

User/Change

UserProfileform

isrequired

tobe

completedbythehiringdepartm

entandsubmittedto

ITSforthesetupofthenetw

ork

andapplicationaccess.

AdministrationofGasBoyusers’does

notfollowthis

policybecause

theFleetDep

artm

entan

dnotITSis

establishingGasBoyusers.

Recommendation24

Transfer

GasBoyuseraccountadministration

responsibility

from

Fleet

toITS.

ITS

Resp

onse

: We

impl

emen

ted

the

late

st v

ersi

on o

f G

asBo

y –

vers

ion

6.4.

46 –

in J

une.

Thi

s is A

ctiv

e D

irec

tory

com

plia

nt. T

his h

as n

ow e

nabl

ed u

s to

build

AD

gro

ups f

or th

e us

er b

ase

defin

ing

wha

t th

ey c

an d

o in

the

syst

em. S

yste

m a

dmin

istr

atio

n is

now

hand

led

by F

leet

send

ing

requ

ests

to th

e IT

S H

elp

Des

k .

ITS

6/20/2014

IV.

FUEL

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTER

NALCONTROLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

PriorityDefinition

s:A=With

in6mon

ths

B=With

in1year

C=With

in2years

31

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Managem

entResponse

ResponsibleParty

ForecastCompletion

36

Anestablished

back

upprocessisinplace

forthedatabases

topreventunwanted

lossofinform

ation

dueto

deletionor

corruptionofdata.

TheCityhas

aform

alprocedure

(Procedure

No.IT

DS11.5

001)to

govern

dataandprogram

backups.

Incremen

talbackupsareperform

eddaily,andafull

backupisperform

edweekly.Copiesofthefullbackup

arestoredinan

offsite

storage

facility.

Backupsof

GasBoydatabases

aregoverned

bythispolicy.

None.

37

Appropriate

mechanismsarein

place

toen

sure

the

integrityofGasBoy

historicaldata.

TheCity’scurren

toffboardingpolicyrequires

applicationadministratorsto

remove

theuser’saccess

rightsfrom

thesystem

,notto

deletetheiraccount;

therefore,retainingthehistoricaldataassociated

witha

user.

GasBoyisgoverned

bythispolicy.

Recommendation25

Continueto

work

inconjunctionwithITSon

maxim

izingtheuse

ofcontrolm

echanisms

availableinGasBoyto

ensure

theintegrityof

historicaldata.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in o

rder

to

mee

t the

am

bitio

us g

oals

and

obj

ectiv

es o

utlin

ed in

th

is d

ocum

ent.

Fleet Manager

C/

38

Accessto

GasBoyis

controlledthrough

theuse

ofauser

nam

eandpassw

ord.

GasBoy’spassw

ord

configurationsarepredefined

within

theapplication.TheCityhas

theability

tochange

or

altertheseconfigurationsandthecurren

tconfigurations

alignwiththeCity’sPassw

ord

Policy(PolicyNo.ITDS5.3

02).

None.

39

TheCityhas

maintenance

contractsfortheir

fuelmanagemen

tsystem

sto

ensure

continuityofvendor

supportandreceive

future

upgrades

asthey

become

available.

TheCityhas

anannualmaintenance

contractthat

covers

vendorsupport;clausesregardingfuture

upgrades

however

arenoteviden

twithinthecontract.

Recommendation26

Totheextentpractical,ensure

theGasBoy

contractaddresses

availability

andupdateof

future

upgrades

toconfirm

supportand

functionalityareupto

date.

ITS

resp

onse

:The

Gilb

arco

/Gas

Boy

mai

nten

ance

ar

rang

emen

t pro

vide

s rel

ease

of a

ll G

asBo

y re

leas

es. W

e ju

st u

pgra

ded

to th

e AD

com

plia

nt

vers

ion.

ITS

5/21/2014

32 

V. FUEL MANAGEMENT FLOWCHARTS 

FLOWCHART A: FUEL ORDERING, RECEIVING AND PREPARATION FOR PAYMENT FLOWCHART B: FUEL COST ALLOCATION AND INVENTORY RECONCILIATION 

   

Flowchart A: Fuel Ordering, Receiving and Preparation for Payment

Accounts PayableFleet Account Coordinator

Fleet SuperintendentDesignated Fuel

Manager

Prepares fuel order in Excel or

GasBoy based on GasBoy tank

inventory readings

Reviews order, adjusting to

ensure it meets contract stipulation

Creates delivery order in GasBoy

Receives delivery order email

Obtains vendor delivery receipt for every storage tank

that is filled and retrieves Veeder Root (GasBoy)

receipts available

Receives delivery in JDE against PO

Compares vendor delivery receipt to GasBoy receipt

Performs 3-way match of invoice, PO and delivery

receipt

Enters invoice in JDE to enable

payment

Reviews JV report and related

documentation for proper fund coding

and overall accuracy

Resolves any discrepancies with

Fleet

AP Supervisor spot checks JV

report transactions for differences

between what was received and

invoiced

AP Supervisor approves payment

by posting transaction (JV) to

AP in the JDE general ledger

End

Submits receipts to Fleet

Superintendent

Submits GasBoy email delivery

order to vendor, copy to Account Coordinator and

others

Upon vendor

fuel delivery

Enters PO information in

GasBoy against delivery order (2)

Reconciles delivery receipts

with PO information and validates price

calculation

Upon invoice receipt

Creates PO in JDE (2)

Calculates fuel order cost using

the Pricing Worksheet (Excel) and the daily DTN FastRack Average

Prices

Prints and saves PO, delivery order, Pricing worksheet daily pricing info in a file

Resolves any discrepancies

Saves PO and receipts in a file

a

a

Resolves any discrepancies

Produces Journal Voucher (JV)

report in JDE and submits to AP with

support

Payment process

1. Update AR #24 to reflect current fuel management procedures. Critically, procedures should address the timely entry of transactions in all systems that support fuel management through the implementation of specific time entry standards.

2. Track and periodically analyze fuel orders that exceeded contract stipulation in terms of number of allowed weekly deliveries. 3. Leverage new Fleet Manager and the Account Coordinator for better segregation of approval, ordering and receiving duties. 4. Benchmark the Fleet staffing levels against comparable jurisdictions. Evaluate cost-effectiveness of in-house fuel transfer operation.12(a) Develop a procedure that addresses prompt creation of POs in JDE and their entry into GasBoy12(b) Shift the responsibility of accessing to the DTN FastRacks Average prices information form AP to the Fleet Account Coordinator.13. Formalize the comparison of the vendor's delivery receipts to Veeder Root (GasBoy)21. Identify discrepancies between the JDE, FASTER and GasBoy asset databases and correct databases based on results.

1 4 22

Selected recommendations for improvement as presented in Exhibit A.1, Fuel Management Internal Control Documentation

Start

13

2

3

12b

12a

12a

33

Flowchart B: Fuel Cost Allocations and Inventory Reconciliations

Business UnitsFleet SuperintendentFinance Dept.

Accounting ManagerFinance Dept.

Accountant

Obtains GasBoy monthly export on fuel disbursement

detail

Summarizes by business unit and

fuel type and exports into Excel

Prepares summary journal

entry

Post debits and credits to the JDE

general ledger

Agrees the total monthly volume

available in GasBoy to the total volume available in JDE

Compare fuel cost allocation to

FASTER records for the month

End

Verifies that all fuel for the month has been received

in both GasBoy and JDE

Agrees summary information to FASTER total

disbursements for the month

Checks JDE fuel levels to make sure they are

sufficient to accept fuel credit

(disbursement)

Submits GasBoy/JDE reconciliation to Fleet Spdt. and

Fleet Manager

Agrees the total gallons in GasBoy/

JDE to the total gallons disbursed

in FASTER

Acknowledges receipt

Sends monthly cost allocation report to Fleet

Spdt. and Mngr.

End

Reconciliation

Cost Allocation

Start

Start

Start

Receives GasBoy/FASTER interface

report

Validates correctness of

transactions and investigates

discrepancies

6. Especially until the fuel management procedures consolidate, perform reconciliations weekly or bi-weekly.7. As needed, develop procedures for managing interface transmission logs with description of common errors and resolution actions.15. As soon as possible, develop detailed management reports to allow adequate monitoring and control of fuel usage.16. As soon as possible, program FASTER with complete asset information to allow adequate monitoring and control of fuel usage. 17. Resolve the issues related to tanker truck GasBoy equipment. Develop standard reports to continually monitor internal fuel transfers.22. Provide user departments viewing access to FASTER to allow validation of fuel usage and costs.

Selected recommendations for improvement as presented in Exhibit A.1, Fuel Management Internal Control Documentation

Provides sign-off (email) confirming

reconciliation

Sends monthly report to business

units’ Account Coordinators

Verifies physical inventory, verifies all

transactions in GasBoy, and gives okay to

Finance to reconcile

End

34

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

35

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

GEN

ERAL

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he a

mbi

tious

goa

ls a

nd o

bjec

tives

ou

tline

d in

this

doc

umen

t.

1TheCityhas

documented

policiesand

proceduresforall

partsmanagemen

trelatedprocesses.

Nowritten

policiesandproceduresexistregarding

partsmanagemen

t.Recommendation1

Developform

alpoliciesan

dproceduresforparts

managem

entto

covertopicssuch

as:

Fleetstaffrolesandresponsibilities

Partsselectionandauthorization

Partandsupplierquality

Orderingandreceipt

Timelyprocessingoftransactionsinto

the

pertinentsystem

s

Part

s sel

ectio

n, p

art a

nd su

pplie

r qua

lity

and

orde

ring

an

d re

ceip

t are

bei

ng h

andl

ed th

roug

h th

e ci

ty's

outs

ourc

ed re

pair

par

ts v

endo

r. Th

e cu

rren

t NAP

A co

ntra

ct e

xpir

es in

Dec

embe

r of 2

014.

The

flee

t div

isio

n is

cur

rent

ly w

orki

ng o

n a

new

RFP

for t

he c

ity's

repa

ir

part

s ope

ratio

n.

Fleet Manager

C

2Partsorderingis

centralized

.PartsorderingiscentralizedintheFleetDep

artm

ent.

Thispolicyfostersaccountability

andpromotes

economiesofscale.

Atpresenthowever,thereisnomechanism

tostopor

preventuserdep

artm

entsfrom

orderingpartsand

services

directlyandnotthrough

Fleet.W

hen

this

happen

s,norecord

iscreatedofrepaircosts,

negativelyim

pactingfleetmanagem

ent,

standardizationandcosts.

Recommendation2

Developapolicythat

addresses

centralized

procuremen

tofpartsintheFleetDep

artm

ent,

anddesignates

Fleetas

thesingleauthorized

dep

artm

entto

purchaseparts.Continually

communicateto

userdep

artm

entsthe

importance

ofprocuringonlythrough

Fleet.

Agre

e

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

36

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

3TheCitylocates

partsat

thelowest

reasonablecost.

TheCityhas

apartssupplycontractwithNAPAwho

operates

anOnSite

Store

andprovides

personnelto

man

thestore.N

APAstocksitemsas

requestedbythe

Cityanddeliversfrom

NAPAwareh

ousesoffsite

when

item

sarenotstocked

onsite.

TheCitypurchases

allpartsfrom

NAPAexceptfor

occasionalinstanceswheretheCityobtainsabetter

price

withdirectpurchasesfrom

vendors(i.e.,state

contracts).

NAPAhas

theauthority

toprocure

partsthat

NAPA

does

notstock,includingspecialtyparts,ontheCity’s

beh

alf.Inthiscase,N

APAresearches

vendorsand

prices,selectingtheoptionthat

mostbenefitstheCity.

NAPAaddsamarkupto

thethirdparty

vendorprices

when

itprovides

thisservice.

While

sourcingthrough

asinglevendoren

sures

contractuallycontrolledcostsandfavorseconomiesof

scale,thereisnotaform

alprocedure

toreview

NAPA’sselectionofthirdparty

vendorsinthose

cases

whereNAPAdoes

notstock

apart.

Critically,theNAPAsystem

does

notcarryasset

inform

ationandtherefore

theNAPArepresentative

does

nothavetheinform

ationneed

edto

makethe

bestrecommen

dationto

theCitybased

onrepairand

partsusage

history.A

dditionally,andas

aresultofthis

limitation,theCityisnotableto

take

fulladvantage

of

existingwarranties.

Recommendation3

(a)Developaprocedure

tomonitorand

periodicallyanalyzetheprocurementactivity

ofnonNAPAstocked

items.

Thebasiscan

beacertainthresholdam

ount,typeofpart,

etc.Wherever

practical,requestNAPAto

stock

additionalpartsto

avoidmarkup

costs.

(b)IncoordinationwithITS,developthemeans

toprovidetheNAPArepresentative

access

toassetrepairandpartusage

history.

(c)IncoordinationwithNAPA,developa

procedure

totack

warranties

andensure

that

theCitymaxim

izes

theiruse.

The

city

’s re

pair

par

ts c

ontr

act w

ith N

APA

expi

res i

n D

ecem

ber o

f 201

4. T

he n

ew c

ontr

act w

ill a

ddre

ss so

me

of th

ese

issu

es

Com

plet

e- N

apa

curr

ently

has

acc

ess t

o Fa

ster

.

The

city

’s re

pair

par

ts c

ontr

act w

ith N

APA

expi

res i

n D

ecem

ber o

f 201

4. T

he n

ew c

ontr

act w

ill a

ddre

ss so

me

of th

ese

issu

es.

Fleet Manager Fleet Manager Fleet Manager

C C C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

37

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

4Costofparts

received

are

validated

toen

sure

compliance

with

curren

tcontract.

Accordingto

theNAPAcontract,pricingsetbyNAPAis

tobereview

edwiththeCityandupdated

everysix

months(M

ay1standNovember

1stofeachyear).Th

eCity’sreview

processhowever,isnoteviden

t.Curren

tly,thereview

islim

ited

totheAccount

Coordinator’scomparisontheam

ountchargedand

parttypeontheFA

STER

Work

Order

(WO)withwhat

NAPAeven

tuallycharged(seeIC#17).

Recommendation4

ConductNAPAprice

evaluationseverysix

monthsas

described

intheNAPAcontract,to

ensure

theCityisgettingthebestpossibleprices

andservice.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he a

mbi

tious

goa

ls a

nd

obje

ctiv

es o

utlin

ed in

this

doc

umen

t.

The

city

’s re

pair

par

ts c

ontr

act w

ith N

APA

expi

res i

n D

ecem

ber o

f 201

4. T

he n

ew c

ontr

act w

ill a

ddre

ss so

me

of th

ese

issu

es.

Fleet Manager

C

5Partsinventory

managem

entis

supported

byclear

policies.

TheFleetdep

artm

ent’sgeneralruleisto

order

parts

ondem

and,andnotkeep

inventory,excep

tforfluids.

Thisrulehowever,isnotform

allydocumen

ted.Also,

theCityisconsideringtheelim

inationoffluid

inventories.

Recommendation5

Developapolicyto

address

zero

inventories

of

parts,aswellasinventory

practices

forfluids.

The

city

’s re

pair

par

ts c

ontr

act w

ith N

APA

expi

res i

n D

ecem

ber o

f 201

4. T

he n

ew c

ontr

act w

ill a

ddre

ss so

me

of th

ese

issu

es.

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

38

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

FINANCIALDATA

INTEGRITYANDRELIABILITY

6Computerized

system

sareinplace

toaccurately

capture

parts

acquisitionand

disbursem

entdata

intheCity’sgeneral

ledger.

TheCityusestheFA

STER

AssetSolutions(FASTER

)computersoftwareto

supportfleetmaintenance

and

repair.Th

esystem

usesaWOsystem

totrackallparts

andlaborassociated

tovehicle/asset

repairand

maintenance.Purchaseorders(POs)canonlybe

createdintheNAPAsystem

withaFA

STER

WO.N

APA

provides

aninterfacebetweentheNAPAsystem

and

FASTER

totransfer

thepartsorderingtransactionson

adailybasis.

FASTER

isconfiguredto

trackallpartsandlaborused

ineveryvehicle.Eachvehiclehas

anassetnumber

assigned

inFA

STER

,andassetnumbersareassociated

totheCitydepartm

entthat

ownstheasset.WOscan

onlybecreatedforavalid

assetnumber.

FASTER

does

notinterfacewiththeCity’sfinancial

managem

entsystem

,JDEd

wards(JDE),andthus,

accountinginform

ationismanuallyen

teredinJDE

(seeIC#7).

Controlsareinplace

toen

sure

accuracy

ofacquisition

anddisbursem

entdata.Timelinessofdataen

try

however,needsto

bestrengthen

edto

ensure

accurate

reportingas

wellassavings

(discountsfor

promptpaymen

t,taxrefunds,etc.)

Recommendation6

Makethetimelyen

tryoftransactionsinto

FASTER

andJDEapriority.D

evelopprocedures

includingtimestandardsto

ensure

that

all

transactionsarepromptlyrecorded

inthe

system

s.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he a

mbi

tious

goa

ls a

nd

obje

ctiv

es o

utlin

ed in

this

doc

umen

t.

The

city

’s re

pair

par

ts c

ontr

act w

ith N

APA

expi

res i

n D

ecem

ber o

f 201

4. T

he n

ew c

ontr

act w

ill a

ddre

ss so

me

of th

ese

issu

es.

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

39

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

7Manualprocesses,

especially

relatedto

interfaces

betw

een

theexisting

system

s,are

limited.When

necessary,thereare

sufficientchecks

andbalancesto

ensure

integrityof

thedata.

Thecurren

tprocessfortransferringparts’accounting

andusage

inform

ationfrom

FASTER

toJDEismanual.

JDEdoes

notinterfacewithFA

STER

,nordoes

itallow

multipleinvoices

tobeuploaded

inonebatch.TheCity

processes

NAPAinvoices

bycombiningallinvoices

for

each

day

asregistered

byFA

STER

,anden

teringadaily

lumpsum

invoiceinto

JDE,alongwithasinglePDFfile

oftheinvoicesattached

tothesummary.SeeIC

#17

and#20.

SeeRecommen

dation6,above.

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

40

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

8Proceduresarein

place

toreviewthe

interface’sdaily

transm

issionfiles(s)

toverifythat

the

datawas

transm

itted

accurately.

FASTER

’s“PaulBunyon”moduleprovides

logs

which

includeanyNAPA/FASTER

interfacetransm

ission

errorsas

wellasother

logginginform

ation.At

present,ITSisgettingthetransm

issionem

ailsand

review

ingthelogs.H

owever,ITS

willbetransitioning

thisroleto

thenew

FleetAccountCoordinatorwithin

theshortterm

.

AsofJune30,2014,ITS

transitioned

the

responsibility

ofreview

ingthetransm

issionerror

logs

toFleet.Additionally,Fleet

has

written

specificproceduresto

resolveNAPA/FASTER

interfaceissues

uponreceiptoferrornotification

emails.

Recommendation7

IncoordinationwithITS,developform

alproceduresformanaginginterfacetransm

ission

logs,alongwithadescriptionofcommonerrors

andcourseofactionwhenanomaliesare

detected,includingnotificationto

theFleet

Manager.

Cus

tom

repo

rts w

ill b

e ne

eded

to a

id in

mee

t thi

s re

quir

emen

t. Th

e fle

et d

ivis

ion

will

als

o ne

ed

addi

tiona

l sta

ffing

to p

erfo

rm th

is ta

sk.

ITS

resp

onse

7/29

/201

4: IT

S w

ill b

e m

eetin

g w

ith F

leet

Man

agem

ent

on 7

/30/

2014

to p

ropo

se th

at F

leet

pri

oriti

ze a

list

of

cust

om re

port

s nee

ded

whi

ch w

ill b

e bu

ilt b

y IT

S ut

ilizi

ng M

icro

soft

SQL

Rep

ortin

g Se

rvic

es –

whi

ch is

Fa

ster

’s n

ew st

anda

rd (v

ersu

s Cry

stal

Rep

orts

)

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

41

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

PARTS

DISBURSEMEN

TANDUSA

GETR

ACKING

9Costofparts,usage

tren

ds,previous

year

comparisons,

andother

essential

datatrackedby

vehicleare

consisten

tlyand

routinely

monitored.V

ehicles

withunusuallyhigh

costsareflaggedfor

followupto

reduce

therisk

offraud.

While

FASTER

has

sufficientreportingcapability,

curren

tly,there

arenostandardreportsto

continually

monitordata,usage

tren

ds,prioryear

comparisons,or

costcomparisonsneither

attheFleetdep

artm

ent

levelnorat

theuserdep

artm

entlevel.

Fleetmanagemen

tisdecentralizedandmonitoring

practices

may

notbeconsisten

tam

onguser

dep

artm

ents.Curren

tly,departm

entsdonothave

accessto

FASTER

;also,there

arenostandingperiodic

reportsavailableto

userdep

artm

entsto

monitorparts

usage

data,usage

tren

ds,comparisonto

previous

years,andcostcomparisons.

Recommendation8

(a)Developstandardutilizationandexception

reportsanddevelopform

alproceduresand

foruserdep

artm

entsto

accessthose

reports

andreview

keydatato

identifyanomalies.

Userdepartm

entsshoulddiscussrelevant

findings

withFleet.

(b)Inthefuture,consider

thepossibility

ofa

centralized

fleetmanagemen

toperationas

ameansto

increase

control,standardizationof

procedures,andsavings.

a) T

he fl

eet m

anag

emen

t div

isio

n w

ill b

e re

stru

ctur

ing

and

addi

ng a

dditi

onal

staf

f as n

eces

sary

per

CM

’s

prop

osed

Bud

get i

n or

der t

o m

eet t

he a

mbi

tious

goa

ls

and

obje

ctiv

es o

utlin

ed in

this

doc

umen

t.

b) T

his r

ecom

men

datio

n is

cur

rent

ly u

nder

way

.

Fleet Manager Fleet Manager

C C

PARTS

ORDER

INGANDREC

EIVING

10

Partsselection

policiesare

adeq

uate.

Techniciansdecidewhichpartsareneeded

forthe

repairbased

ontheirdiagnosticresults.Technicians

consultwiththeFleet

Supervisoronlywhen

the

Techniciandeemstherepaircoststo

betoohighorit

isan

older

vehicle,m

arkedforretiremen

t;otherwise,

thereisnoapprovaloftheselectionsmadebythe

Techniciansbefore

theorderisplacedwithNAPA.

OnlySupervisorscanaccess

repaircosthistory

toassistwhen

consulted

andmakerepairdecisions.

Recommendation9

Strengthenthepartsselectionprocessbyhaving

Techniciansaccesshistory

repairandparts’data

asnecessary

(i.e.,afteracertainpartcost

threshold).

Form

alizeaprocedure

fortheFleet

Supervisorto

review

theTechnician’sdiagnostic

reportpriorto

placingpartordersbased

ona

predefined

dollarorquantity

threshold.

Can

be

acco

mpl

ishe

d w

hen

fleet

has

the

abili

ty to

de

velo

p cu

stom

repo

rts.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s ne

cess

ary

per C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet

the

ambi

tious

goa

ls a

nd o

bjec

tives

out

lined

in th

is

docu

men

t.

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

42

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

11

Orderingoftires

andother

items

that

areinstalledon

multiplevehiclesis

supported

by

adeq

uate

procedures.

Curren

tly,Fleet

isnotableto

use

FASTER

toautomaticallytracktire

usage

byvehicle.Tires

are

ordered

inbatches

andindividualvehicleusage

isrecorded

inFA

STER

manually.

Recommendation10

Developaprocedure

forFA

STER

toautomaticallycapture

usage

oftiresbyvehicle.

Can

be

acco

mpl

ishe

d w

hen

fleet

as t

he a

bilit

y to

dev

elop

cu

stom

repo

rts.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s nec

essa

ry

per C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he

ambi

tious

goa

ls a

nd o

bjec

tives

out

lined

in th

is

docu

men

t.

Fleet Manager

C

12

Purchaseordersare

createdaccurately

andtimely.

Themajority

ofpurchaserequisitionsarecreated

withintheNAPAsystem

astheTechnicianscomplete

vehiclerepairs.TheCitycreatesPOsdirectlyonly

occasionally,inwhichcase

thePOprocessfollowsthe

regularapprovalw

orkflowas

supported

byJDE.

Once

thePOissubmittedto

thevendor,theAccount

Coordinatorcommunicates

withtheServiceWriter

whothenupdates

therelatedFA

STER

WOwiththePO

inform

ation.

ForNAPAprocuremen

ts,theFA

STER

WOrepresents

theCity’srequisition.Thepartisreceived

inFA

STER

when

theTechnicianreceives

theorder

anupdates

theWOinFA

STER

.

Recommendation11

Form

alizeproceduresforprocessingnonNAPA

procuremen

ts.Includeaprocedure

toplace

acopyofthenonNAPAPOinashared

drive

sotheServiceWritercanaccessitto

cross

check

withthepackingslipuponreceipt.

Proceduresshouldalso

includetimestandards

forreceivingnonNAPAprocurementsin

FASTER

.

The

curr

ent N

APA

cont

ract

exp

ires

in D

ecem

ber o

f 20

14. T

he fl

eet d

ivis

ion

is c

urre

ntly

wor

king

on

a ne

w

RFP

for t

he c

ity's

repa

ir p

arts

ope

ratio

n. T

he n

ew

cont

ract

will

add

ress

som

e of

thes

e is

sues

. Th

e fle

et m

anag

emen

t div

isio

n w

ill b

e re

stru

ctur

ing

and

addi

ng a

dditi

onal

staf

f as n

eces

sary

per

CM

’s p

ropo

sed

Budg

et in

ord

er to

mee

t the

am

bitio

us g

oals

and

ob

ject

ives

out

lined

in th

is d

ocum

ent.

Fleet Manager

C

13

Ordersareonly

placedintheNAPA

system

againstan

existingFA

STER

WO.

UponreceiptofaWO,theNAPArepresentative

verifies

that

WOcontainsallnecessary

inform

ation

includingassetnumber,techniciannumber,andpart

number(s).Atthat

point,theWOinform

ationis

enteredinto

theNAPAsystem

andtheorder

isprocessed

.

Recommendation12

Consider

replacingthemanualsubmittalof

WO’sto

NAPAwithautomatictransfersofWO

datafrom

FASTER

totheNAPAsystem

.This

couldim

prove

theaccuracy

ofthedataen

tered

into

theNAPAsystem

byelim

inatinghuman

key

punch

errors.

This

will

do

very

littl

e to

cor

rect

hum

an k

ey-p

unch

er

rors

. Som

eone

will

be

man

ually

ent

erin

g th

e da

ta in

to

FAST

ER b

efor

e th

e da

ta is

tran

sfer

red.

W

ill c

ontin

ue to

eva

luat

e.

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

43

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

14

Purchase

requisitionsare

placedonlyfor

existingvendors

andtheCity

maintainsan

upto

datelistofall

possibleapproved

vendors.

NAPAprocesses

themajority

oftheCity’sparts’

procuremen

ts.TheCityonlyordersdirectly,usingthe

JDEPOprocessoccasionally.JDEdoes

notallow

employees

tocreate

arequisitionwithoutavendor

number.Newvendorsareinstructed

toform

ally

register

asanew

vendorthrough

theProcuremen

tDep

artm

ent.Editsto

themastervendorlistis

appropriatelyrestricted

totheProcuremen

tDep

artm

ent.

None.

15

Aprocessisinplace

toen

sure

that

parts

arereceived,

logged

,and

disbursed

correctly

totheTechnicians.

TheNAPApartorder

isreceived

inFA

STER

when

the

Technicianupdates

andcompletestheWOonce

the

partisinstalledandrepairhas

concluded

.While

the

Technicianssign

theNAPAinvoices

acknowledging

receiptofthepart,theprocessinnotdocumentedina

form

alpolicyorprocedure.

When

theServiceWriterreceives

nonNAPAparts,the

ServiceWriterinspectsthegoodsandmatches

topackingslip,stampsslipwithareceiptstamp.Then

the

ServiceWritermanuallyreceives

thepartinFA

STER

by

updatingtheWO,andsubmitspackingslipto

Account

Coordinatorto

processtherelatedinvoice.

This

processhowever,isnotdocumen

ted.

SeeRecommen

dations1and12,above.

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

44

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

16

Thereisadeq

uate

segregationof

duties

forparts

ordering,receiving

andpaymen

t.

Partsmanagemen

tforpartsordering,receivingand

paymen

tareproperlysegregated

.Req

uisitionofparts

isperform

edbytheTechnicianresponsibleforthe

repairthrough

aFA

STER

WO.TheNAPA

representative

placestheorder;w

hen

theproductis

received

,theTechniciansings

thereceipt,and

receives

inFA

STER

through

theupdateoftheWO.

Paymen

tisperform

edbyAccounting.

Rolesandresponsibilities

however,are

notform

ally

documented.

Recommendation13

Documen

tpartsmanagemen

troles,

responsibilities

andsegregationofduties

through

awritten

policy.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he a

mbi

tious

goa

ls a

nd

obje

ctiv

es o

utlin

ed in

this

doc

umen

t.

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

45

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

VEN

DORPAYMEN

TPROCESSING

17

Allparts

related

invoices

arecross

checked

inorder

toverifythat

theCity

isreceivingallof

thepartsforwhich

itispaying.

Onanightlybasis,theNAPAsystem

willautomatically

sendafileto

FASTER

withallpartsthat

were

purchased

duringtheday,alongwiththe

correspondingWOinform

ation.Thefileis

automaticallysavedinashared

drive.

TheAccountsPayable(AP)Manager

retrievesthefile

andsubmitsto

theFleetAccountCoordinatorwho

then

cross

checks

allinvoices

inthereport,w

iththe

physicalinvoices

NAPAreceived

from

theNAPA

representative,aswellasthetotals.Th

en,the

AccountCoordinatoren

tersinJDEthelumpsum

total

oftheinvoicesforeach

day.FornonNAPAinvoices,

theAccountCoordinatorperform

sathreeway

match

ofinvoice,POanddeliveryreceiptspriorto

entering

into

JDE.

NAPAgrantsadiscountwhen

invoices

arepaidwithin

30daysbutperconversationwithAP,theCitymay

not

befully

benefittingfrom

thesediscounts.A

Palso

notedthat

theprocessforcorrectinginvoice

discrep

ancies

isnotefficien

twhichcausesalagwith

managing,trackingandclosingtheadjustmen

tsinJDE,

andultim

atelyim

pactsthemonthlyaccounting

process.

Onaweeklybasis,theAccountCoordinatorcreatesa

JournalVoucher

(JV)reportinJDEandsubmitsitto

AccountsPayable(AP),alongwithinvoices

andthe

dailyNAPAinterfacereports.

Recommendation14

(a)Developaprocedure

toen

sure

that

reconciliationofinvoices

withtheNAPA

interfacereportbecompleteddaily.Timely

entryisneeded

because

ofthelargevolume

ofinvoices

processed

daily.

(b)IncoordinationwithAP,developa

procedure

tocorrectinvoicediscrepancies

efficien

tlyandeffectively.

(c)IncoordinationwithAP,m

onitorwhether

NAPA’sdiscountforpromptpaymen

tis

beingrealized

.Establishagoalto

maxim

ize

allpossiblediscounts.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he a

mbi

tious

goa

ls a

nd

obje

ctiv

es o

utlin

ed in

this

doc

umen

t.

The

Flee

t Div

isio

n is

initi

atin

g pe

riod

ic m

anua

l rev

iew

s an

d w

ill w

ork

with

IT to

fina

lize

the

auto

mat

ed p

roce

ss.

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

46

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

18

Inform

ation

required

toprocess

invoices

iscomplete,accurate

andauthorized

priorto

postingto

thegeneralledger.

APClerksreview

theparts’JDEJV

reportforproper

codingandoverallaccuracy.Priorto

postingthe

payablesto

thegeneralledger,theAPSupervisorspot

checksinvoicetransactionslookingfordifferences

betweenwhat

was

receivedandinvoiced.

Akeystep

inthisarea

istheQA(qualityassurance)

carriedoutbytheFleet

ServiceWriterwhomonitors

completedwork

ordersinFA

STER

andproceed

sto

closingWOs,aftermakingsure

that

allven

dorrepairs

orservices

arecompletedandthat

allven

dorinvoices

tieto

thework

order.

Recommendation15

Form

alizetheWOcompletionqualityassurance

(QA)process

tomakesure

WOsareclosed

promptly.

The

fleet

div

isio

n w

ill n

eed

addi

tiona

l sta

ffing

to

perf

orm

this

task

. Rol

e of

a F

leet

Dat

a An

alys

t.

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

47

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

PARTS

COST

ALLOCATION

19

TheCitymaintainsa

singlelistofvalid

assetnumbers,and

thereisaconsisten

tprocessforadding

assetsto

the

databases.

While

FASTER

istheofficialsystem

ofassetrecord

for

fleetmanagemen

t,assetnumbersalso

haveto

be

maintainedinJDE,theofficialsystem

ofassetrecord

forfinancialreportingbecause

thesetw

osystem

sdo

notinterface.

However,a

processforupdatingassets

inthetw

osystem

sisnotclearlydefined

andper

conversationswithstaff,theassetinform

ationwithin

thedatabases

may

notcurren

tlymatch.A

ssetsmay

existinonesystem

butnotinanother,w

hichcan

cause

inconsisten

treporting.

JDEandFA

STER

have

notbeen

reconciledsince

FASTER

’sinceptionin2012.

Recommendation16

(1)Utilizeadataanalysistoolsuch

asIDEA

toiden

tifydiscrep

ancies

betweenJDEan

dFA

STER

assetdatabases.U

seresultsto

make

correctionsas

needed.

(2)Developaform

alprocedure

toconcurrently

inputnew

assetsandremove

oldassetsfrom

FASTER

immed

iatelyafterthey

areupdated

inJDEto

ensure

thedatabases

maintainthe

sameinform

ation.

The

Flee

t Div

isio

n is

cur

rent

ly e

valu

atin

g th

e pr

oces

s. Fu

ll im

plem

enta

tion

shou

ld ta

ke p

lace

with

in th

e ne

xt

12 m

onth

s.

Flee

t adm

inis

trat

ive

secr

etar

y ro

le. E

mpl

oyee

has

bee

n hi

red

rece

ntly

trai

ning

und

erw

ay.

Fleet Manager Fleet Manager

B B

20

Proceduresarein

place

toen

sure

that

costofpartsare

properlyallocated

(chargedback)to

userdep

artm

ents.

Costallocationistheresponsibility

oftheAccounting

dep

artm

ent.

Onamonthlybasis,A

ccountingobtainsa

FASTER

summaryreportofpartsandlaborbyasset

andbydep

artm

ent.Accountingthen

prepares

adetailedbillingreportandsubmitsto

theFleet

Superintendentto

review

andapprove.Once

approved,A

ccountingprepares

journalen

triesforthe

dep

artm

entsandthen

theFinance

Dep

artm

ent

Manager

approvesthejournalen

triesbypostingthem

tothegeneralledger.

Recommendation17

EstablishatimestandardforAccounting’s

preparationofthebillingreportas

wellasforits

review

andapprovalbyFleet.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he a

mbi

tious

goa

ls a

nd

obje

ctiv

es o

utlin

ed in

this

doc

umen

t.

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

48

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

21

Userdepartm

ents

validatethe

monthlyparts’cost

allocationby

reconcilingto

their

records.Differences

promptly

researched

and

clarified.

Accountingprepares

asummarymonthlycost

allocationreportandsubmitsto

Fleet,whointurn

provides

detailtouserdep

artm

entsforreview

and

reconciliationto

theirrecords.Curren

tlyhowever,

dep

artm

entsonlyreceiveapaper

copyoftheWOat

thetimeofservice,they

donothaveaccessto

FASTER

tofacilitatereview,andthereisnotaform

alprocess

fortheuserdep

artm

entsto

reconcilepartscost

allocationsto

theirWOrecords.

Recommendation18

(a)Provideuserdep

artm

entsview

ingaccess

toFA

STER

inorderto

obtaindetailed

inform

ationonthecostofthepartsan

dservices

perform

edontheirvehicles.

Developstandingutilizationandexception

reportsanddevelopform

alproceduresand

foruserdep

artm

entsto

accessthose

reports

andreview

keydatato

identifyanomalies,

anddiscussrelevantfindings

withFleet.

(b)Consider

developingaform

alprocedure

for

userdep

artm

entsto

reconcilecharge

backs

totheoriginalwork

orders.

(a &

b) T

he fl

eet m

anag

emen

t div

isio

n w

ill b

e re

stru

ctur

ing

and

addi

ng a

dditi

onal

staf

f as n

eces

sary

pe

r CM

’s p

ropo

sed

Budg

et in

ord

er to

mee

t the

am

bitio

us g

oals

and

obj

ectiv

es o

utlin

ed in

this

do

cum

ent.

Vi

ewin

g ac

cess

to F

aste

r will

do

very

littl

e to

mee

t thi

s re

quir

emen

t. C

usto

m re

port

s will

nee

d to

be

deve

lope

d to

mee

t thi

s req

uire

men

t.

The

fleet

man

agem

ent d

ivis

ion

will

be

rest

ruct

urin

g an

d ad

ding

add

ition

al st

aff a

s nec

essa

ry p

er C

M’s

pro

pose

d Bu

dget

in o

rder

to m

eet t

he a

mbi

tious

goa

ls a

nd

obje

ctiv

es o

utlin

ed in

this

doc

umen

t..

Fleet Manager

C

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

49

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

DATA

BASE

ANDSYSTEM

SECURITY

22

Changesto

the

FASTER

databases

areproperly

authorized.

TheCity’sInform

ationTechnology

Services

(ITS)

dep

artm

enthas

aform

alprocedure

(Procedure

No.IT

SS04)to

govern

changesto

databases

and

applications.Allchangesmustberequestedina

documentedReq

uestforChange

form

,followthe

multilevelapprovalprocess,andbemanaged

bythe

Change

Advisory

Board.Changesto

FASTER

are

governed

bythispolicy.

None.

23

Proper

mechanisms

areinplace

for

establishingFA

STER

users.

TheCityhas

aform

alprocedure

(Procedure

No.IT

DS5.3

01)to

govern

useraccessrights.A

nITSNew

User/Change

UserProfileform

isrequired

tobe

completedbythehiringdepartm

entandsubmittedto

ITSforthesetupofthenetw

ork

andapplication

access.A

nelectronicEm

ployeeSeparation/Transfer

Notice

form

isusedwhen

anem

ployeetransfers

dep

artm

entsorseparates

form

theCity.Human

Resources

andITSwillreceivean

electroniccopyof

thisform

from

theincumbentManagerandtake

the

appropriateaction.AdministrationofFA

STER

users’is

governed

bythispolicy.

None.

24

Anestablished

back

upprocessisin

place

forFA

STER

databases

topreventunwanted

lossofinform

ation

dueto

deletionor

corruptionofdata.

TheCityhas

aform

alprocedure

(Procedure

No.IT

DS11.5

001)to

govern

dataandprogram

backups.

Incremen

talbackupsareperform

eddaily,andafull

backupisperform

edweekly.Copiesofthefullbackup

arestoredinan

offsite

storage

facility.

Backupsof

FASTER

databases

isgoverned

bythispolicy.

None.

VI.

PARTS

ACQUISITION,D

ISBURSEMEN

TANDUSA

GEINTERNALCONTR

OLDOCUMEN

TATION,INCLU

DINGMANAGEM

ENTRESPONSE

Priority

Definitions:

A=Within6months

B=Within1year

C=Within2years

50

No.

ExistingControl

(InternalControl

Objective)

Description

RecommendationforIm

provement

Man

agem

entR

espo

nse

ResponsibleParty

ForecastCompletion

25

Appropriate

mechanismsarein

place

toen

sure

the

integrityand

preservationof

FASTER

historical

data.

TheCity’scurren

tpolicyforoffboardingrequires

applicationadministratorsto

remove

theuser’saccess

rightsfrom

thesystem

,notto

deletetheiraccount;

therefore,retainingthehistoricaldataassociated

with

auser.

FASTER

isgoverned

bythispolicy.

None.

26

Accessto

FASTER

iscontrolledthrough

theuse

ofauser

nam

eand

passw

ord.

FASTER

’spassw

ord

configurationsarepredefined

withintheapplication.TheCitydoes

nothavethe

ability

tochange

oraltertheseconfigurations.Th

ecurren

tconfigurationsdonotalignwiththeCity’s

Passw

ord

Policy(PolicyNo.ITDS5.3

02).

Recommendation19

TheCityshouldwork

withtheFA

STER

vendor

toim

plementpassw

ord

requirem

entsthat

align

withtheCity’spassw

ord

policy.

ITS

resp

onse

We

are

wor

king

with

Fas

ter t

o up

grad

e to

the

vers

ion

6.2.

26 b

y th

e en

d of

Aug

ust..

. W

e sh

ould

ther

efor

e be

ab

le to

reso

lve

this

issu

e fo

r Fas

ter w

hen

we

upgr

ade

the

end

in e

arly

Sep

tem

ber 2

014.

Gas

Boy

has j

ust i

ssue

d th

eir f

irst

AD

com

plia

nt v

ersi

on.

We

have

com

plet

ed th

e up

grad

e to

this

ver

sion

and

will

be

wor

king

with

Fle

et to

con

vert

all

acce

ss to

use

AD

via

lo

gin.

ITS

July 2014

Thisspace

leftblankintentionally.

51 

VII. PARTS MANAGEMENT FLOWCHARTS 

FLOWCHART C: PARTS ORDERING FLOWCHART D: PARTS RECEIVING FLOWCHART E: PARTS INVOICE PROCESSING FLOWCHART F: PARTS COST ALLOCATION 

Flowchart C: Parts Ordering

Acct. Coordinator/Fleet Spdt.

In-House Supplier (NAPA)

TechnicianFleet

SupervisorService Writer

Receives from customer “Vehicle/

Small Engine Service Request” for vehicle to be

repaired

Start

Retrieves FASTER work

queue and assigns the WO to

Technicians

Creates a Work Order (WO) in

FASTER for the vehicle to be

repaired. Logs the vehicle mileage

Performs diagnostic testing

of vehicle and enter notes for

repairs required

Are parts required?

End (*)

Performs repair, documents labor

in the WO

Logs into FASTER and retrieves WO

(*) Controls for the accurate processing of labor costs were not part of this evaluation.

Creates parts request for the

repair in the WO

Prints WO and walks it over to “in-

house” parts supplier (NAPA)

Locates part within NAPA or with a non-NAPA vendor

NAPA places order (8)

Prepares purchase

requisition with support

Obtains Superintendent

approval

Creates PO in JDE

Creates order in NAPA system

To B,Flowchart

D

Submits PO to vendor

To A, Flowchart

D

a

a

No Yes

No

Yes

1 2 5 13 16 19

1. Develop formal policies and procedures for parts acquisition, disbursement and usage.2. Develop policy to designate Fleet as the single authorized department to purchase parts.3. Analyze NAPA procurements of non-NAPA stocked items. Provide NAPA access to repair history. Maximize the use of parts warranties.4. Evaluate NAPA prices as established in NAPA contract.5. Develop policy to address zero inventory of parts.9. Strengthen the parts selection process by vetting Technician’s selection based on pre-defined criteria.12. Replace manual submittal of work orders with automated transfers.13. Document parts personnel roles and responsibilities through written policies.16. Identify and correct discrepancies between the JDE, FASTER and GasBoy asset databases.19. Work with FASTER vendor to implement password requirements that align with City password policy.

Selected recommendations for improvement as presented in Exhibit B.1, Parts Management Internal Control Documentation

9

3 4

12

52

Flowchart D: Parts Receiving and Preparation for Payment

Service WriterTechnicianIn-House Supplier

(NAPA)

QA Process

Submits invoices in batches to

Account Coordinator 2-3 times per week

Submits packing slip to Account Coordinator.

To D,Flowchart

E

FASTER generates an

automatic email that notifies user department that vehicle is ready

To D,Flowchart

E

Obtains part

All costs tie to the WO?

B

No

End

Daily, identifies completed WOs in

FASTER

Follows up on pending notes such as vendor

repairs, and vendor invoices

To C,Flowchart

E

Yes

Scan invoice and packing slip, and

receives purchase in FASTER by updating WO

Closes the FASTER WO

Start

A

Supplies part and obtains Technician

signature acknowledging

receipt

Installs part on vehicle

Receives non-NAPA ordered

shipment, inspects goods and matches to

packing slip. Stamps packing

slip with ReceiptStamp (date, PO,receiver signature)

Customer picks up vehicle along with the printed copy of

the WO

Charges the part to WO in the

NAPA system and produces NAPA

invoice (1)

Receives part order in FASTER and completes

WO

10 11

15

6

6

6. Establish the timely entry of transactions into FASTER and JDE as a priority.10. Develop procedure to automatically capture tires’ usage by vehicle.11. Formalize procedures for processing non-NAPA procurements, including time standards for timely entry into the systems. Ensure Service Writer has a access to non-NAPA purchase orders to facilitate receipt.15. Formalize the work order completion quality assurance process.

Selected recommendations for improvement as presented in Exhibit B.1, Parts Management Internal Control Documentation

53

Flowchart E: Parts Invoice Processing

Fleet Account CoordinatorAccounts Payable

ClerkAccounts Payable Supervisor

Creates a single PDF file of all invoices and

uploads to JDE

Resolves any discrepancies with

Fleet

AP Supervisor approves payment

by posting transaction (JV) to

AP in the JDE general ledger

Weekly, produces Journal Voucher (JV) report from

JDE and submits to AP along with

interface report and individual invoices

Payment process

D

AP Supervisor spot checks transactions

Resolves discrepancies with

NAPA In-House Supplier

Reviews JV report and related

documentation for proper fund coding

and overall accuracy

Enters invoice into JDE, along with scan of invoice,

PO and slip

Totals the invoices and compares to interface report

total

Receives all NAPA invoices for the day’s activity

C

Enters the lump sum total of the

invoices for each day in JDE

Daily, retrieves NAPA/FASTER

interface file from share drive;

converts from cvs to Excel; and cross-

checks individual NAPA invoices to interface report

Receives further clarification for non-NAPA interface and

other 3rd party invoices third-party

vendors from Service Writer

Performs three-way match of

invoice, PO and packing slip

7

14

6

14

6. Establish the timely entry of transactions into FASTER and JDE as a priority.7. Develop procedures for managing NAPA/FASTER interface transmission logs.14. Develop a procedure to formalize daily reconciliation of NAPA invoices to NAPA/FASTER interface reports. Develop procedures to effectively correct invoice discrepancies. Continually monitor whether prompt payment discounts are being realized.

Selected recommendations for improvement as presented in Exhibit B.1, Parts Management Internal Control Documentation

Compares daily NAPA upload to

FASTER

54

Flowchart F: Parts Cost Allocations

Business UnitsFleet SuperintendentFinance Dept.

ManagerFinance Dept.

Accountant

Post debits and credits to the JDE

general ledger

Compare parts cost allocation to FASTER records

for the month

Start

Submits to Fleet to review and

approve

End

Resolves discrepancies

Prepares and distributes monthly billing summary to

Fleet

Prepares journal entry to bill

departments

Monthly, obtains FASTER account summary report that shows labor

and parts by asset and by department

Prepares detailed billing by asset

and by department

Agrees summary information to

FASTER totals for the month

Provides sign-off (email) confirming

reconciliation

8. Develop standard utilization and exception reports to facilitate user department monitoring of usage and costs.18. Provide FASTER viewing access to user departments. Consider formalizing the user department review of the cost allocations (charge backs).

8 18

Selected recommendations for improvement as presented in Exhibit B.1, Parts Management Internal Control Documentation

Reviews monthly report and provides to

business units

55