Report 2012-110 Recommendation 5 Responses

Report 2012-110: Special Interest License Plate Funds: The State Has Foregone Certain Revenues Related to Special Interest License Plates and Some Expenditures Were Unallowable or Unsupported (Release Date: April 2013)

Recommendation #5 To: Motor Vehicles, Department of

Motor Vehicles should periodically assess the cost and benefits of updating its automated systems to reflect current per-plate administrative costs. If Motor Vehicles determines that doing so is cost-effective, it should update its automated systems to reflect the up-to-date administrative costs for all these plates.

Annual Follow-Up Agency Response From September 2015

Computer programming for the revised administrative service fee for all plate programs was completed on December 31, 2014.

Corrective action is completed.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

We confirmed that Motor Vehicles has updated its automated service fees to reflect current per-plate administrative service fees on page 8 of our follow-up audit (Report #2015-506, July 2015).

Annual Follow-Up Agency Response From October 2014

The computer programming of the revised changes for the ASF for all plate programs is still in progress.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

1-Year Agency Response

DMV is making the changes to revise the ASF for all plate programs and this should be completed by December 31,2014. Periodic cost and benefit assessments will be ongoing.

California State Auditor's Assessment of 1-Year Status: Pending

6-Month Agency Response

The State Auditor recommended DMV periodically assess the cost and benefit of updating its automated system to reflect current per-plate administrative costs. The DMV examined actual transaction volumes and Administrative Service Fee (ASF) revenues collected during the twelve-month period. The ASF revenue for the same period was calculated using updated ASF costs. The findings show that had the costs been updated the total collection would have resulted in a collection of an additional $30,743. DMV estimates that changing the ASF of all special plate programs would require 722 hours of staff or contractor programming and cost approximately $52,085 which would be applied to all plate programs equally.

The impact of these fees for special plate programs would be disparate from one program to another. For example, during the twelve month examination period, there were only 274 transactions involving ASF for the UCLA plate and 20,703 transactions for the KIDS plate, yet both would bear the same financial burden in supporting the change.

DMV will revise the ASF for all plate programs this coming year and will continue to monitor the special plate activities and revenue to determine when or if future adjustments are appropriate and represent a responsible investment of special plate funds.

California State Auditor's Assessment of 6-Month Status: Pending

Motor Vehicles provided no documentation to support its assertions. As such, we have assessed this recommendation as "Pending" until Motor Vehicles provides its cost-benefit analysis and we review and assess it.

60-Day Agency Response

The Department continues to review the cost/benefit analysis associated with updating the automated systems to ensure current per-plate administrative costs are appropriately charged.

California State Auditor's Assessment of 60-Day Status: No Action Taken

All Recommendations in 2012-110

Agency responses received after June 2013 are posted verbatim.