This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide.
In its February 2020 report entitled Audit of Government Vehicles, the Commonwealth of the Northern Mariana Islands (CMNI) Office of the Public Auditor (OPA) found that weak staffing and training in the Department of Finance (DOF) Procurement and Supply Division (P&S) led to non-compliance in the government’s management of its vehicle fleet. The report found inadequate inventory of government-owned vehicles, noting that out of the “561 government vehicles inspected, OPA found 80 vehicles that were not recorded on the Inventory Listing, and 43 of the 80 vehicles did not bear CNMI property tag numbers.” In fact, the OPA found that the government had failed to conduct a complete inventory since 2010 and that weak staffing contributed to significant inventory management and maintenance shortcomings:
Compliance with Vehicle Laws and Regulations Are Not Monitored or Enforced
OPA found that DOF-P&S is not monitoring or enforcing agencies’ compliance with applicable laws and regulations. Specifically, OPA found vehicles with:
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improper markings;
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prohibited window tinting;
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civilian license plates for non-law enforcement vehicles;
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no vehicle trip log;
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no written authorization for its use after normal business hours;
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no documentation evidencing an annual safety inspection; and
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no documentation evidencing periodic maintenance or service.
DOF-P&S has a duty and responsibility to exercise general supervision and control over all inventories of supplies belonging to the government and to exercise general oversight and control on the use of physical assets and other equipment to prevent waste, abuse, or other unauthorized use.
OPA learned that DOF-P&S staff have not read and/or are unaware of the requirements of the applicable laws and regulations pertaining to government vehicles. Consequently, DOF-P&S has not monitored or enforced compliance with the Act and regulations. Unauthorized use and misuse of government vehicles could lead to waste of public funds, jeopardize public trust, and diminish employee morale.
The OPA recommended that the government enforce its asset management policies and procedures and that it ensure the accuracy of vehicle fleet records by conducting annual physical inventory and performing random audits to validate the integrity of the property control process. The OPA also recommended that the government provide “adequate training to staff to ensure that staff are knowledgeable of the laws, regulations, and policies and procedures as it relates to their duties and responsibilities” and hold agencies accountable for the vehicles under their control. As this report illustrates, the failure to properly train staff on managing government assets can have a significant adverse impact on the value-for-money obtained in the expenditure of public funds.
