Audit finds lack of internal controls in Connecticut DMV

The Department of Motor Vehicles (DMV) removed 379,992 late fee accounts from its records without documentation to support the decision according to a recent audit finding from the Auditors of Public Accounts.

The finding is one of 18 in an audit covering the DMV for the fiscal years ending June 30, 2019 and 2020.

The late fees that were removed were a part of a program operated by the Department of Energy and Environmental Protection (DEEP) and overseen by the DMV that assesses a $20 late fee against the owner of a vehicle that has not been through an emissions inspection within either 30 days of the expiration date of an assigned inspection period or within 60 days following a test failure.

DMV contracts with a vendor to provide an Emissions Database Management System (EDBMS) to manage data and provide training to emissions testing center vendors. The state owns all the data within the system. In August 2015, the DMV implemented the Connecticut Integrated Vehicle and Licensing System (CIVLS) to interface with EDBMS and verify vehicles are in compliance with emissions, including for payments for emissions late fees.

The audit found that the DMV suspended emissions late fee processing in CIVLS due to integration issues in 2015. The suspension continued through the audit period, with the DMV manually processing late emissions fees.

In November 2021, the DMV removed 379,882 late fees from its records because it believed the accounts were invalid “because their disposal dates were before the assessed late fee dates or had no address on file.” State statute allows the DMV commissioner to cancel all uncollectable claims of less than $1,000 without authorization. But, according to the auditors, the DMV did not maintain any documentation to support its justification.

The auditors also found the DMV did not report an estimated uncollectable receivables on a form cataloguing assets and liabilities for fiscal years 2019, 2020, and 2021 despite around 45 percent of the receivables were uncollectible. In 2019, the department reported roughly $8.8 million in emissions fees receivables on the same form. In 2020 and 2021, that number was roughly $10.9 million.

As a result, auditors found that the DMV risks “losing significant revenue when it does not pursue or documents its efforts to collect receivables prior to write-off.” They also found the DMV may not be accurately reporting emissions late fee receivables to the state comptroller.

The audit recommends the DMV improve its internal controls over the processing, collection, write-off, and reporting of emissions fees.

Responding to the finding, the DMV said emissions late fee billing has begun since the COVID-19 waiver period and historical data on late fees is under review. The agency is also “reviewing the receivable reconciliation process with internal audit and emissions staff to update billing, reconciliation, determination of uncollectible items, and reporting.”

The audit also found the DMV does not have sufficient internal control over its processes for disposing of assets and a lack of supporting documentation to show managerial employees underwent performance review. Auditors also found the agency was not tracking complaints related to the use of state-owned vehicles.

A number of personnel policies were also found to be deficient, including  prior approval of overtime for DMV employees, failure to maintain medical certificates for employees charging sick leave, and review and approval of timesheets to ensure employees were charging leave time in keeping with minimums set through collective bargaining.

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