State emissions program auditors acknowledge padding of time sheets
By Marianne Goodland
With the General Assembly looking for coins in the sofa cushions these days, a recent audit of the state’s emissions program showed that auditors charged with reviewing the program are padding their time sheets or even turning in time sheets for audits they didn’t do. And while the state auditors didn’t call it fraud, the chair of the Legislative Audit Committee did not hesitate to call it that.
The audit, done by the Office of the State Auditor (OSA), found that the Vehicle Emissions Program, which is administered by the Department of Revenue (DOR), failed to monitor staff time, overestimated the amount of staff it needed to handle its duties and did not exercise proper controls over cash advances.
The program is about to expand into Weld and Larimer counties and would need additional staff to handle the new responsibilities. But Motor Vehicles Emissions Program Director Rick Kiger said he has instituted a hiring freeze for that expansion until the department completes an analysis of its staffing needs.
As to the padding of time sheets, the department was unaware of the amount of time it took to do the audits of the emissions program equipment and testing procedures, and the department has now taken steps to change its timekeeping procedures and developed training to ensure that its staff timekeeping is more accurate.
The OSA review of the emissions program was discussed by the Legislative Audit Committee on Sept. 27. The audit was a discretionary one, ordered by the state auditor after OSA conducted a statutorily-required audit of the Automobile Inspection and Readjustment Program (AIR), which looked at how the program affected air quality.
Among the findings: one type of audit of records kept by Envirotest, the company contracted to conduct the emissions tests, were not being done; that some testing stations were audited more than they should be, and others were not audited enough; and that auditors failed to cite Envirotest inspectors for all violations committed during testing procedures.
Colorado’s air quality emissions program dates back to 1980. The AIR program is jointly administered by the Department of Revenue and the Department of Public Health and Environment (CDPHE). DOR handles the vehicle emissions side; it provides oversight of the emissions testing facilities, licenses the facilities and enforces testing regulations through audits of the facilities. CDPHE sets program rules and regulations, such as emissions standards, testing requirements and regulations for training and licensing the emissions inspectors. It also is responsible for procuring the contractor (Envirotest) to provide the emissions testing.
According to the state audit, Envirotest has done about two million vehicle inspections in its 14 facilities in the seven-county metro area in the last three years. Envirotest also runs the Rapid Screen testing — vans stationed around the metro area that do moving emissions testing — which negates the need for many vehicle owners to go to an Envirotest station for testing. The state audit noted that costs for the program have increased by 38 percent since 2006, and FTE is up 12 percent in the same period.
The state audit found a variety of problems with the administration of the program, but the most serious were with the DOR side.
Emissions program auditors do a variety of audits on the Envirotest facilities. The state audit found that sanctions are not always issued for all violations and higher-risk stations should be audited more frequently. And the emissions program does not adequately track and monitor its staff to make sure they are “fully utilized” and that budget requests for staffing are inaccurate. Finally, cash advance procedures ought to be reviewed and changed, the state audit said.
EPA regulations require Emissions Program staff to conduct four types of audits: overt and covert performance audits, equipment audits, and record audits. The state also requires audits of Rapid Screen testing.
In order to do a covert audit, an auditor will take an unmarked state car and cash to pay for the vehicle test. Each auditor is given $600 per month for that purpose, and about $350 of that is actually used to pay for the tests, at $25 per test. The rest is on hand in case the inspector solicits a bribe, according to the state audit, but the department said that has not happened in years. The state audit noted that there were no instances where cash was missing or unaccounted for, but issuing cash advances over and above anticipated needs “is not a good use of state resources.”
But what got the most attention from legislators is the amount of time it takes to do an audit, compared to the amount of time auditors say it takes to do an audit.
Beverly Mahaso of OSA said they found problems with timekeeping with most audit types. In some cases auditors overestimated the amount of time it took to do an audit; in other situations, audits were charged when none were done.
According to the report, auditors write the beginning time on a manual audit worksheet; the end time is recorded by the station’s testing system. Based on estimated travel time, and interviews with Envirotest and AIR audit staff, OSA estimated the amount of time for an audit to be 3.4 hours. But auditors charged on average 7.9 hours for each audit, an extra 4.5 hours, “or about 132 percent more time than is spent conducting each audit,” the report said. In more than half of the 42 audit visits reviewed by OSA, the final audit report was printed before noon, but the auditor recorded between seven and nine hours for the same day, “indicating auditors charged more time on their timesheets than supported by time records,” the report said. The state audit also found 13 days when two of the auditors assigned to equipment and overt performance audits recorded five to nine hours for those audits, but the state auditors could find no record of those audits.
The same problem exists with audits of Rapid Screen, the state audit said: auditors record more time on their timesheets than is supported by audit time records. Auditors manually recorded 2.4 hours for each Rapid Screen audit, but those audits should not take more than 1.4 hours to complete, the state audit said. Auditors “are recording an extra hour on their timesheets for each Rapid Screen audit, or about 71 percent more time than is supported” by time records. One auditor, the report said, finished all of the Rapid Screen audits by 1 p.m. but recorded six to nine hours on the timesheet.
The state auditors estimated the staff recorded about 960 more hours for performing audits during the three-month period reviewed by OSA than the audits required. Over the course of a year, that would amount to 3,840 excess hours, the equivalent of 1.8 FTE. Each auditor costs the department $58,600 per year, including retirement benefits, so the cost of the excess time is about $105,000 per year.
AIR auditors told the OSA staff that they record excess hours because they don’t have enough work to do, and that they tried to find other things to do, because “it is their understanding that Emissions Program management expects them to bill a certain percentage of their time to audits.”
According to the state audit, the emissions program management said they were unaware the audits took much less time to complete. They also said auditors often perform other tasks, some related to audit functions, and that timesheets don’t provide a place to record all the kinds of work an auditor would do. But the OSA report said the activities were “sporadic” and did not account for the “substantial discrepancies” they found in the audit and time records.
Sen. Dave Schultheis, R-Colorado Springs, chair of the Legislative Audit Committee, said he was “taken aback” by the report. Employees who misrepresent their time should be “dealt with,” he said. “This misreporting is not acceptable in any way and those individuals who are doing it should be written up severely in their performance reviews. There should be discipline.” Schultheis also blamed management for the problems. “To say management is unaware doesn’t sit well,” he said. “Those who are misrepresenting and overcharging — that’s fraud. That’s fraud… I don’t like taxpayers’ money going to waste.”
DOR “should be as appalled as we are,” said Rep. Jim Kerr, R-Littleton.
Kiger said the department would improve its timekeeping mechanisms “to accurately track and monitor emissions staff activities,” and would provide more training on keeping accurate time records. Kiger also said that the seven auditors were housed in field offices, but they would be moved into one central office to improve oversight. “It concerns us that the staff indicate that they don’t have enough to do every day,” Kiger said, which he said could be setting up the auditors for failure.
The state audit also found fault with the emissions program’s overall estimates of staffing needs. The department said the expansion of the program into Larimer and Weld counties would require two more FTE and $117,000 in new spending, which the DOR requested last November. That request was not only approved, but the General Assembly added more than they had asked for, a total of 2.8 FTE and $178,000.
But based on the time records, OSA said the program has asked for more staff than it needed, and that if staff time were more appropriately used, the department would need only one more person for the northern Front Range program. That would save the state $58,600 per year.
Overall, the OSA report said, the emission program is overstaffed by 2.8 FTE; staffing could be reduced by 26 percent and still fulfill program requirements with a savings of $182,000 per year.
Kiger told the audit committee that the program takes the findings “very seriously and as an opportunity to correct errors.” He also said that the program had instituted a hiring freeze for the expansion while a detailed analysis of staff needs was being conducted, and would submit a revised budget request to the governor’s office and General Assembly. “We will effect numerous changes,” Kiger promised.