S. C. STA MAR 3 0 1978 STATE DOCUMENTS

South Carolina General Assembly ]

Legislative Audit Coonell

PRCXJRAM 1\'ID (f£AATl(lt'\L 1£'/IB~ (F TI-E AmJISITHlL lfE A'ID M~ fF S:W.l CAIU.INA STATE-aiD MJTOR \fill Cl£S r'MCH 30J 1978 1HE STATE OF SOUlli CAROLINA

GENERAL ASSEMBLY

LEGISLATIVE AUDIT CDUNCIL

PROGRAM AND OPERATIONAL REVIEW

OF mE

A~UISITION, USE AND MANAGIMENT OF

SOUIH CAROLINA

STATE-OWNED MJTOR VFIUCLES TABLE OF CONTENTS

Page

INI'RODUCTI ON • 1

BACKGROUND • • • . . • . • 3

CEAPI'ER I - MAJOR FINDING AND REPORT SUMMARY • 7

CliAPTER III - A~UISITION AND REPLACEMENT OF STATE MJI'OR VH'II CI.,ES • • • • • • • • • • • • • • • • • • • • • • • 35

CRAPTER IV - IJENTIFICATION OF STATE-OWNED VEHICLES. • • • 45 rnAPTER V - MAINTENANCE SYSTEM AND GASOLINE PURGI.ASES. • • 55

CHAPTER VI - VEHICLE LIABILITY INSURANCE • • • • • • • • 65

APPENDICES

APPENDIX I - RESULTS OF THE LEGISLATIVE AUDIT COUNCIL'S SURVEY OF STATES' MJrOR VH:IICLE PRACTICES • • • • • 75

APPENDIX II - ESTIMATED COST OF TRAVEL IN STATE VEHICLES FOR FY' 76- 77. . • • • • • . • • • • . • • . • • • . • • • 79

APPENDIX III - ANALYSIS OF SAVINGS IF FLEET MIX GIANGED. • 80

APPENDIX IV - ESTIMATED POV REIMBURSEMENTS FOR FY 76-77. • 82

APPENDIX V - BREAK-EVEN ANALYSIS COMPARING THE NUMBER OF MILES DRIVEN IN STATE VEHICLES WITII PAYING POV REIMBURSEMENT •• 85

APPENDIX VI - STATE AGENCY GASOLINE CONSUMPTION FOR FY' 76-77...... 87 APPENDIX VII - LEGISLATIVE AUDIT COUNCIL SURVEY OF AGENCY MJI'OR VEHICLE PRACTICES • • • • • • • 89

ANNOTATED BIBLIOGRAPHY • 93

AGENCY COlVMENI'S • • • • • • • • • • 9 7 IN1RODUCTION - SCOPE AND MEnDDS

In February 1977 the General Assembly directed the Legislative Audit Council to evaluate thoroughly the State's management of its motor vehicle. fleet. In a study designed to pinpoint needed improve­ ments in this area the Council considered the following components of a motor vehicle management system: acquisition, assignment, misuse/ abuse, maintenance, disposal, central motor pool, credit cards, gaso­ line purchases, insurance, identification and registration. To provide an initial information base for the study, 106 State agencies completed a Council survey on their motor vehicle management practices. A dozen agencies, controlling ninety-three percent of the State motor vehicle fleet, then received a more detailed review through visits by Council staff. These agencies were: ._ Clemson University Department of Corrections Department of Education Department of Health and Environmental Control Department of Highways and Public Transportation Department of Mental Health Department of Mental Retardation Division of General Services Forestry Commission State Law Enforcement Division University of South Carolina Wildlife and Marine Resources Department At the selected agencies Council staff visited maintenance shops and motor pools and interviewed motor pool managers, mechanics, and agency administrative personnel (including accounting, data processing, pur­ chasing, insurance and safety personnel). Staff members also analyzed

management reports and cost allocation systems, ~ampled vouchers for gasoline purchases and evaluated agency motor vehicle policies. The Council then examined the role of the Division of Motor Vehicle Management (DMWNQ in the State's overall handling of its motor vehicle fleet. This evaluation included interviews with IMVM staff and State agency personnel plus a review of the MOtor Vehicle Management Manual and IMVM files, personnel qualifications and monthly inventory printouts. Finally, the Council analyzed motor vehicle-related support ser- vices offered by General Services such as purchasing, disposal, motor pool and insurance. For additional infonnation the Council received survey responses from thirty-one states regarding their motor vehicle policies and fleet management programs. The survey results appear in Appendix I.

-2- BACKGROUND

The State of South Carolina owns and operates over 16,000 motor vehicles. During FY 76-77, according to Legislative Audit Council estimates, the State spent over $21 million for employees to travel JOOre than 175 million miles in these vehicles (see Appendix II) . In addition, based on Fiscal Accountability Act reports for FY 76-77, the State paid its employees an estimated $6 million for travel in privately-owned vehicles (POVs). At the current POV reimbursement rate of 14 cents per mile, this personal vehicle''travel would equal mre than 4 7 million miles. The State motor vehicle fleet includes approximately 4,000 passenger vehicles (autOJOObiles, station wagons, vans and jeeps) , 6,000 school buses operated by Department of Education, 6,000 special purpose vehicles and various kinds of trucks. During FY 76-77 State agencies purchased a total of 21,924,346 gallons of gasoline to operate these vehicles. At the end of FY 76-77 the automobile fleet profile excluding law enforcement vehicles consisted of 5% full­ size, (e.g. Chrysler Newport), 41% standard (e.g. Plymouth Gran Fury), 47% intermediate or midsize (e.g. Pontiac Lemans), 6%.compact (e.g . .AM: Hornet), 1% subcompact (e.g. Ford Pinto). The following table, based on the Comcil 's agency survey and the Division of Mltor Vehicle Management's Jme 1977 inventory, estimates the number of vehicles operated by each agency as of June 30, 1977.

-3- TABLE 1 INVENTORY OF STATE-OWNED M)TQR VEHICLES

AS OF JUNE 30, 1977

Ntmlber of Ntmlber of Agency Vehicles Agency Vehicles Adjutant General 2 John De La Howe School 14 Division of Administration 3 Juvenile Placement &Aftercare 1 Aeronautics Commission 28 Labor Department 1 Department of Agriculture 39 · Lan.der College · 17 Alcoholic Beverage Control Conun~. 37 State Law Enforcement Division 193 CoiiUll. on Alcohol & Drug Abuse 2 State Library 5 Dept. of Archives & History 8 Lieutenant.Governor's Office 1 Attorney General 1 Board of Medical Examiners 2 State Auditor 3 Medical University 40 CoiiUllission for the Blind 7 Department of Mental Health 251 Citadel, The 52 Dept. of Mental Retardation 187 Civil Air Patrol 47 Div. of Mbtor Vehicle Management 31 Clemson University 574 Board of Nursing 1 College of Charleston 33 Opportunity School 9 Comptroller General 2 Parks, Recreation & Tourism 127 Department of Corrections 293 Patriots Point Dev. Authority 1 Criminal Justice Academy 11 Personnel Division 3 Dairy CoiiUllission 1 Ports Authority 63 School for the Deaf & Blind 37 Public Railways Cammission 6 State Development Board 17 Research &Statistical Services 1 Disaster Preparedness Agency 6 Residential Home Builders 1 Office of Economic Opportunity 1 Retirement Division 1 Department of Education 7 ,078* . Second Injury Fund 1 Educational Television Network 35 Secretary of State 1 Election Commission 1 Department of Social Services 25 Employment Security Conunission 6 State College 47 Engineering Examiners Board 1 Tax Cammission 4 Forestry Commission 437 Board for Tech. & Comp. Education 77 Francis Marion College 22 Treasurer's Office 1 Division of General Services 313 University of South Carolina 270 Governor's Office 1 Vocational Rehabilitation Dept. 64 Dept. of Health &Envir. Control 249 Wildlife &Marine Resources Dept. 430 Higher Education CoiiUllission 2 Winthrop College 48 Dept. of Highways & Public Trans. 4,816 Workmen's Compensation Fund 1 Human Affairs Cammission 1 Department of Youth Services 117 Industrial Commission 6 TOTAL VEHICLES 16,214

*Includes 6539 school buses.

-4- Policies and practices regarding State motor vehicle management have been studied many times during the past. fifteen years. In 1963 the Budget and Control Board adopted regulations governing the purchase and use of passenger vehicles, amending them a year later. Following a 1964 study of motor vehicle management practices initiated by Governor Russell and a 1968 Budget and Control Board report initiated by the Legislature, the Governor's Management Review Conmission issued a 1972 report covering management of the State fleet. A review of State-owned vehicle management followed in 1973. Finally, upon request by the Budget and Control Board, a special panel tmder the auspices of the Cotmeil of State Govermnents reviewed problem areas relevant to the management of State-owned and operated motor vehicles and issued a report in 1975.

The Division of Motor Vehicle Management (I:MVM) was created in 1975 by the Budget and Control Board in response to the panel's reconmendations.

DMVM.reports directly to the Budget and Control Board and is specifically charged with the responsibility to ''prepare, pramllgate, monitor and enforce such motor vehicle regulations as approved by the Budget and

Control Board and .to provide active motor vehicle fleet management.''

The primary source of regul~tions pertaining to State-owned motor vehicles is the Motor Vehicle Management Manual approved by the Budget and Control Board. These regulations do not have the force of law and much reliance is placed on agency directors for enforcement of the rules. Legislation regarding State-owned motor vehicles has been limited. Section 131 of the 1978-79 General Appropriation Act states that "no State-owned automobile shall be acquired by any agency of the State

-5- without prior approval of the State Budget and Control Board." Section 56-3-780 of the 1976 Code of Laws provides for permanent State Government license plates to be supplied for all buses, trucks, motorcycles, trailers, semi-trailers, and pole trailers operated by the State. All other State vehicles· are required to be registered annually. Section 56-3-1710 of the 1976 Code of Laws requires State-owned vehicles to have State Government (SG) license plates unless exempt under this law. The South Carolina Governmental Motor Vehicle Tort Claims Act passed in 1968 allows any person to recover damages sustained by the negligent operation of any motor vehicle being operated by a State employee on official business. There is no legislation that provides any guidance regarding the management of the State fleet.

-6- rnAPTER I

MAJOR FINDING AND REPORT Sm.MARY

The Legislative Audit Cotmcil found that the State of South Carolina does not have adequate control over its motor vehicle fleet. Problems resulting from this lack of control were identified in all major areas of motor vehicle management: assignment and use of vehicles; acquisition and replacement of vehicles; identification of vehicles; maintenance and gasoline purchases; and liability insurance coverage. Taken together, these problems point out the need for more effective overall management of the State's motor vehicle fleet.

Assignment and Use - State motor vehicles, especially passenger cars are often assigned on the basis of position or prestige rather than need for the vehicle. As a result, much of the State fleet is tmderutilized and persons with assigned vehicles receive a special privilege not available to most State employees. In addition many employees who must travel extensively on State business are reinbursed 14 cents per mile for using their privately-owned vehicles because State- owned vehicles, which cost about 12 cents per mile to operate, are not available to them (p. 15) . - M:>re than 850 State employees (excluding law enforcement per­ sonnel and persons whose cars are their offices) drive to and from work in State-owned vehicles. In many cases these vehicles are also used to drive to ltmch, rtm errands and for other personal reasons. It is estimated that these practices cost the State over $450,000 in FY 76-77 (p. 25) .

-7- - The General Services Division M:>tor Pool is not useful for general assignment purposes because only 6 of the 275 vehicles in the pool are available for interagency dispatch. The remainder are leased to agencies . Forty-four of the leased vehicles are not used for official business to the extent necessazy to make them rore economical than reinbursing employees for use of privately-owned vehicles. The State could save over $37,000 per year by st:bsti­ tuting POV reimbursements for these assignments (p. 25) • - The State has reinbursed employees excessively for use of their privately-owned vehicles in instances when use of a State-owned vehicle would have been more economical. If total POV reimbursements were reduced by only 10% through more efficient assignment of existing State vehicles, the Council estimates the State could have saved as much as $94,000 last fiscal year and a similar amount this fiscal year (p. 27).

Acquisition and Replacement - Exceptions to Budget and Control Board vehicle acquisition criteria in FY 76-77 resulted in the purchase of ZZZ intermediate cars in place of the compact cars specified by the criteria. These exceptions cost the State $195,180 (p. 35). - The State fleet consists of 93% full size, standard and intermediate cars and only 7% compact and st:bcompact cars. If the State had eliminated standard and full size vehicle purchases over the last four rodel years (excluding law enforcement vehicles) and all cars purchased were bought at a ratio of 50% intennediate and 50% compact cars the State could have saved: (p. 37)

-8- (a) $706,304 in purchase price

(b) $244,600 in the cost of the gasoline (489,201 gallons at the State cost of SO cents per gallon) - Eighteen 1977 automobiles were purchased after FY 76-77 con­ tracts established by the Budget and Control Board had expired. Vehicles purchased in this manner cost mre and additional papetwork must be generated (p. 39). - Vehicle replacement practices do not ensure ma.ximun resale value because many agency vehicles have vezy high mileage (100 ,000+) and are nm into the ground before being replaced (p. 40) .

Identification of State-owned Vehicles - Records concerning the number and assignment of tmmarked cars are conflicting. Without accurate records concerning the number and assignment of tmmarked vehicles it is difficult to detennine if all such assignments are legitimate (p. 45). - Many agencies and personnel possess unmarked cars although they do not meet established criteria for having them. As a result accountability is reduced and misuse is aliOOst impossible to detect because drivers are shielded from public scrutiny (p. 48). - Unnecessary exceptions exist to the regulations that require State-owned vehicles to be identified by decals. This also reduces accountability and increases the potential for misuse and abuse of motor vehicles and waste of public funds (p. SO) • - The method used to identify State automobiles (am1ual regis­ tration) is inefficient and costly compared to the method used to identify other State vehicles (permanent registration). (p. 52)

Maintenance System and Gasoline Purchases - State maintenance facilities vary widely in the quality and types of work done and in their condition and operation. About

-9- 1, 4 70 State vehicles are serviced by conmercial vendors. If these vehicles were maintained at State facilities, savings could be as much a5 $441,000 per year (p. 55) •

- Excessive 8DX)tmts of comnercial gasoline are being purchased instead of less expensive State supplied gasoline. If the State's con:mercial gas purchases had been reduced by 25% in F'f 76-77 the State could have saved $25,432 (p. 58). - The State credit card system designed to replace colllllercial credit cards has not been fully implenented (p. 60).

Liability Insurance - The reinsurance system used to provide liability insurance for State vehicle operators is mre e:xpensi ve than self insurance. M:>tor vehicle liability coverage through a self insurance program rather than reinsurance program could save the State $245,000 to $614,000 per year (p. 66). - Forty-six State agencies are purchasing insurance coverage limits that are higher than required. This practice is costing the State about $92,000 per year mre than required (p. 69).

- Eight State agencies have purchased insurance from sources other than the State fleet policy. These agencies are in violation of Budget and Control Board requirements and are paying $16,170 per year in excessive premiums (p.70).

These problems are the result of several major factors, all of which are interrelated. First the State does not have a fleet manage­ ment program. The present system does not provide the means to determine

if all State vehicles are really needed or whether the proper type and

-10- size of vehicle is being purchased. Existing vehicle assignment cri­ teria do not provide a.Qequate guidance as to when State cars should be eliminated or reassigned and rei.nDursement for use of privately-owned vehicles substituted. No one agency or fleet manager is responsible for the acquisition, use, maintenance, operation, disposal and control of. the State's vehicles. While the Budget and Control Board has taken the first step by establishing the Division of Motor Vehicle Management

(IMVM), this Division does not have the authority to manage the mtor vehicle fleet.

Second, virtually no legislation exists concerning the management, acquisition and use of State rotor vehicles. IMVM, the organization supposedly responsible for these functions was created by proclamation rather than by statute. As a result, there are no specific guidelines, authority, or legislative intent concerning the way State vehicles should be managed and used. Third, there is a long tradition in South Carolina of personal assignment and personal use of rotor vehicles based on prestige rather . than actual need. Most agency heads and other high ranking admin:-_ istrative personnel are automatically assigned State cars. Many of these cars are not identified as such through use of decals and State tags. Fourth, IMVM, which was created to prepare, mnitor and enforce motor vehicle regulations, has no real authority to do so. Control of State motor vehicles is decentralized among more than 70 State agencies. Such rules and regulations as have been prorm.llgated are generally not enforceable. Agencies can and do violate these regu­ lations with little or no concern. Finally, even in those instances

-11- when OOM has attempted to enforce regulations (e.g. acquisition of vehicles under contract) the Budget and Control Board can overrule them and grant execptions.

Effective management of the use, acquisition and assignment of rotor vehicles and other related areas is vital if" the State is to accomplish its work in the most efficient and economical ma.rm.er. It is estimated that the State spent over $27 million in FY 76-77 for travel in State vehicles and reimbursement for use in privately-owned vehicles (POVs) • Increased control is necessary if these :ftmds are to be expended in a cost-effective manner.

RECCivteiDA.TION

LEGISLATION SIUJLD BE PASSED FST.ABLISHING A

STATEWIDE FLEET MANAGl:MENI' PROGRAM AND A STATE

FLEET MANAGER - mE FLEET MANAGER'S FIRST PRIORITY' SHOULD BE TO EXAMINE TiiE EXISTING

FLEET AND ELIMINATE ALL UNNECESSARY VEHICLES .

AND SUBSTITIJTE mE USE OF PRIVATELY -OWNED

VFRICLE REIMBURSEMENTS WHEN mE OFFICIAL BUSINESS MILEAGE REQUIREMENTS ARE NOT GREAT

ENOl.JGI TO WARRANT 1HE rosT OF A STATE VEHICLE.

Summa:zy of Fleet Management Recommendations (1) The Fleet Manager should be resp:msible for management, acquisition and control of the State motor vehicle fleet including:

(a) Proper assignment of all vehicles based on need rather than prestige. (p.30)

-12- (b) Elimination of all personal use and mmecessary cODJDUting. (p. 31) (c) Maintenance of log books for all vehicles. (p. 32) (d) Management of the interagency motor pool and establishment of agency rotor pools. (p. 32) (e) Ensuring that citizen complaints concerning the use of State vehicles are adequately investigated and disciplinary action taken if warranted. (p. 32) (2) The State rotor vehicle fleet should be downsized to elimi­ nate all full size and standard autorobiles with the excep­ tion of autorobiles provided to the Governor, statewide elective State officials, the Highway Patrol as necessary, and State Law Enforcement Division agents as necessary. The

State should purchase compact and subcompact cars whenever possible. (p. 42-44) (3) All State vehicles should be identified by permanent State Government license tags and State seal and/or agency decals. The only exceptions should be the autOIOObiles supplied to law enforcement officers when, in the opinion of the Fleet Manager in consultation with the Chief of the State Law Enforcement Division, it is advisable that such State Govern­ ment autOIOObiles not be so marked because anonymity is needed in order not to jeopardize the physical well being of investi­ gators and the investigation of criminal cases. All existing approvals for non-SG tags should be reevaluated based on these criteria. (p. 53)

-13- (4) A coordinated maintenance system should be established utilizing existing facilities and persomel. All State rotor vehicles should be maintained at State facilities tmless otherwise authorized by the fleet manager. (p. 62)

( 5) All State vehicles should be required to use State gasoline

rather than ccmanercial gasoline. Arry conmercial gasoline purchases should be fully justified. The State gasoline credit card should be used for all gasoline and oil pur­ chases. (p. 62-63) (6) The State of South Carolina should implement a program of self insurance for all State vehicles except school buses. A waiver of liability for State employees should be included.

(p. 72)

-14- CE.APTER II ASSIGNMENI' AND USE OF STATE MJTOR VFHICLES

Introduction A major part of the request for this audit concerned assigrunent, use and misuse/abuse of State rotor vehicles. The Legislative Audit Council evaluated these areas to determine whether South Carolina's mot0T vehicle policies, procedures and actual practices are· in keeping with effective, efficient and economical assignment and use of the State's motor vehicles. The Council also examined the effectiveness of State efforts to prevent misuse and abuse. As a result of this evaluation, the Comcil identified the following problem areas: (1) State motor vehicles, especially passenger cars, are often assigned on the basis of position or prestige rather than need for the vehicle; (2) Misuse and abuse of State rotor vehicles, especially passen­ ger cars used for conunuting, is a conmon occurrence; ( 3) The General Services Division Motor Pool is inadequate for use as a general assignment rotor pool because only 6 of the 275 vehicles in the pool are actually available for interagency use; and (4) The existing system for reimbursing State employees for using privately-owned vehicles for State business is not economical.

Inappropriate Assignment of State Motor Vehicles The Legislative Audit Council found that State rotor vehicles, especially passenger cars, are often assigned on the basis of a State employee's position or prestige rather than his or her need for the vehicle to conduct official State business. The Motor Vehicle Management Manual, which is the current State Government policy, states that individual assigrunent "is least desirable

-15- but operationally required in certain cases." It also states, "Vehicle .. assignments shall be made to meet tl_le ftmctional needs of an activity or work tmit" and assigrunent to an individual for "exclusive use shall be tightly controlled and based upon official travel requirements of 18,000 miles or more per year." Responses to the Cotmcil's survey of State agencies indicate that 316 individuals (excluding persons whose cars serve as their offices) drove their assigned vehicles less than 18,000 miles in FY 76-77. Of these, 156 individuals drove less than 12,000 miles, including conunuting. For example, the Council examined the mileage over a two year period of eight automobiles assigned to administrative personnel in the Department of Mental Health. According to mileage information submitted on the Council's questionnaire only one vehicle met the IMVM criteria of 18,000 miles per year. After excluding estimated corranuting mileage all seven of the remaining vehicles were driven less than 8,000 "official business" miles per year and five were driven less than 6, 000 "official business" miles per year. Thirty-one other agencies also possessed vehicles that were not driven 18,000 miles per year. Included among them were the Department of Highways and Public Transportation - 93 vehicles (excluding Highway Patrol), Attorney General's Office - 13, Department of Corrections - 30, Department of Education - 30, Forestzy Conunission - 30 (excluding wardens and rangers) and Tax Conunission - 8. Seventy-six vehicles leased to agencies by the General Services Division failed to meet the requirements. In a recent audit of the Department of Youth Services (Februazy 1, 1978) the Cotmcil found that 14 of the 33 automobiles whose use could be analyzed failed to attain the minimum DMVM mileage requirement. -16- In addition, vehicle assignments to agency heads, commissioners, and presidents of universities and colleges are based solely on prestige. These individuals may receive a vehicle automatically regardless of the actual official travel requirements. Sixty-two (62) agency heads and university and college presidents, and fifteen (15) commissioners have permanently assigned vehicles. This situation is caused by several factors. First, the assign­ ment criteria promulgated by the Budget and Control Board made it possible to assign many vehicles without considering need. The Budget and Control Board FY 76-77 vehicle assignment criteria, excluding special purpose and police vehicles, were as follows: CLASS I - Prestige: For assignment to constitutional officers and executives as approved by the Budget and Control Board .. These vehicles will be purchased on an "as required" basis

by special order. (Chzysler New Yorker, cost: $7,070.70) CLASS II - Executive: For assignments to eligible heads of

State agencies, boards, commissions, and presidents of institutions of higher learning, administering annual bud­

gets in excess of $15 million dollars, exclUding capital improvement funds. (Chzysler Newport, cost: $5,096 .62)

CLASS III - Supervisozy: For assignment to eligible heads of State agencies, boards and commissions whose budgets exceed $4 million dollars per year excluding capital improvement funds or those whose budgets are less than $4 million dollars a year, but travel in excess of 20,000 miles per year. (Plymouth Gran Fury, cost: $4,635.13) CLASS IV - Supervisozy: For assigrunent to eligible heads of

State agencies, boards and coiiiilissions not covered in Class III and deputy heads of State agencies, boards and

-17- commissions who drive in excess of 18,000 miles per year. (Pontiac Lernans, cost: $4,564.80) CLASS V - General Use: For assignment to eligible supervisors and employees who drive in excess of 18,000 miles per year and as general pool vehicles . (.AMC Hornet, cost: $3,685.60) (For FY 77-78 the only significant change made in these criteria was to include full-time commissioners under those eligible for Class II vehicles.) Second, each agency is autonomous and is able to make permanent assignments to its employees. This decentralized control of State vehicles allows for different interpretations concerning how vehicles should be assigned and used based on the philosophy of the individual agency administrators. Some administrators seem to have more per­ missive attitudes in this area than others. Agency heads who are assigned vehicles because of their position may hesitate to deny vehicles to their top assistants. They may also be reluctant to termi­ nate existing assignments based on position. A third factor is that DMVM's requirement of a written agency justification for each vehicle assignment is ineffective in controlling these assignments. Files are not kept current and the information is not used to mnitor assignments. It is apparent that many agency directors (who must approve assignment authorizations) .consider the process a mere formality .and Il1VM has no~. authority to enforce compliance. Many forms reviewed by the Council contain no written justifications. One agency with a large fleet waited over two years before submitting the re­ quired forms. Fourth, even when these forms are submitted the reasons often given in justifying vehicle assignments are nebulous (e.g. "on call," ntravel -18- after hours," "travel statewide"). These justifications are insufficient to analyze the actual amount of official travel required. The number of days a week a person is away from his office and on the road, actual mileage driven, and job requirements are not analyzed in current assignment justi­ fications. Finally, few agencies make periodic reviews of assignments to check for continuing need of vehicles. For example, during the twelve months this audit was in progress, only one agency, the Department of Highways and Public Transpor­ tation was reevaluating vehicle assignments. Lack of periodic reviews results in individuals retaining vehicles whether they continue to need them or not. In order for the State to use its vehicles effectively, efficiently and economically they must be assigned to personnel with a demonstrable need for a vehicle in the perfonna:nce of their official duties. Mileage driven rather than position in government should be the criterion. Job requirements should be the deciding factor in determining what type of vehicle should be used by the employee. The overall effects of the current vehicle assignment system are

that nruch of the State fleet is underutilized and that some individuals get special privileges while others do not. Using a pennanently assigned State vehicle for comnn.tting is a salary supplement since the State is in effect paying the individual's transportation costs. In addition, permanent vehicle assignments allow individuals 100re opportunities to abuse the use of the car (e.g. driving it to lunch and using it to run errands and for other personal business). This practice also results in excessive reimbursements to State employees for the use of their privately-owned vehicles (POVs). In

many cases individuals who do not drive extensively for State business

use State cars at an approximate cost of 12 cents per mile. On the other hand, many employees who must travel a great deal as part of

-19- their official duties receive POV reimbursements of 14 cents per mile because State cars are not available to them. The present practice ultimately means a higher cost for operating State Government.

Misuse and Abuse of State .Motor Vehicles

The Council found that misuse and abuse of State JIDtor vehicles, especially passenger cars used for commuting, is a conmm occ:tnTenee.

Many State-owned vehicles are used for commuting from home to work. Records concerning the a.JIDunt of COliJIJDlting in the State are incom­ plete because mileage logs are not kept by State agencies. However, from its questionnaire responses the Council identified 858 State persmmel (excluding law enforcement officers and persons whose cars are their offices) who use State-owned vehicles to drive to and from work. Of that n.uni:>er, 109 persons conmute at least 15 or mre miles one way or 30 or mre miles per day. This review identified individuals commuting to Coll.llliJia from as far as Camden, Winnsboro, St. Matthews, and Leesville.

Many persons also use State vehicles for driving to ltmch, for run:D.i.ri.g errands or for other personal business. It was impossible to determine the exact magnitude of this problem due to lack of documenta- tion. However, IMVM files of citizen complaints concerning misuse and abuse of State vehicles provided some basic data.* The Aud.i t Council examined 320 citizen inquiries which had been reported in the period from when IMVM was established through September 1977. The following examples are illustrative:

* Note: There is no way to determine how extensive these abuses are since many citizens aren't aware that there is a mechanism for reporting misuse and others are apparently reluctant to get involved.

-20- Citizen Observation Location/Time/Date Agency Response State vehicle being Hiller Hardware, Driver admits personal used to conduct per­ Five Points, use and sees nothing sonal business. Columbia wrong with it. Driver is 11:15 a.m./9-16-77 agency head. State vehicle used Numerous locations Agency director acted to conduct per­ such as vacations, surprised and asked what sonal business . social events, he was supposed to do Driver sold his errands - no dates, about it. No action was personal car upon times. taken. being assigned State vehicle. State vehicle used European Health Spa, ''Technically speaking'' to conduct per­ Boozer Shopping driver should not have sonal business. Center, Columbia used car for personal 4:00 p.m./10-20-77 business. However, driver specifies that he "exercises every day to keep fit for his job" and this stop was between a nonnal work day and an evening speaking engage­ ment for which he had to pick up a visiting speaker at the airport. This justi­ fies this technical breach of regulations.

Man and woman in St. Andrews Trip was made to secure State vehicle pur­ Piggly Wiggly supplies for department chasing groceries. 8:55 p.m./9-11-77 ftmction. State vehicle Ballentine, S. C. Hearing requested "in order observed at soft­ 7:00-8:00 p.m./ to present employee's com­ ball field with 5-11-77 ments and defense in this driver in soft­ particular instance." ball tmifonn.

State vehicle being Sarnbo's Restauran~ Staff was on dinner break used to conduct Columbia and using State vehicle. personal business. 8:00 p.m./7-21-77 State auto observed Clemson, S. C. Driver attended movie after in parking lot of 9:00 p.m./6-12-77 hours. Theater was on route movie theater. to driver's destination. 3 persons, appar­ Oliver's Lotmge, Personnel had only a few ently intoxicated, Columbia beers after attending staggering etc. 5:20 p.m./3-10-76 meeting. All denied being intoxicated. Verbal warning to be 'more discrete while representing this agency."

-21- Citizen Observation Location/Time/Date Agency Response State-owned vehicle 3220 Wilmot Avenue Driver was waiting to at residential Colunbia have vehicle serviced address other than 11:50 a.m./7-10-77 according to agency direc­ driver's address on tor. Due to long waiting Saturday. period at garage (30 min.) driver drove to sister's residence to visit until garage could service vehicle. State-owned vehicle Rickard's Nursing Driver was on route to at nursing home Home dept. function and gave appeared to be 5:30 p.m./4-20-77 ride to dept. employee who picking up or dis­ had no other means to get charging passenger. to nursing home. Driver states he went approximately 2 miles out of his way. 2 males traveling 1500 block of Persons were in route to downtown on Sunday Assembly Street State office to work over­ in State vehicle. Columbia time. Driver resents ''having 11:35 a.m./2-13-77 [!MvMJ request that we prove our iiUlocence of any misuse of State vehicles simply because some faceless infor­ mant happens to see the vehicles on the road at what to him appears to be a strange • II t l.ll1e. State vehicle K-Mart Store Driver was "on-call" and being used for Columbia uses vehicle for personal personal business. 8:15 p.m./11-19-76 business less than 10% of the time. Man, woman and Shakey' s Pizza Driver was "on-call" and small child using Parlor had to be able to respond State vehicle for 7:00-8:00 p.m./ quickly. personal reasons. 4-15-77 Man and woman Lourie's Clothing Driver admits personal use using State Store, Col1.Dllbia of State automobile. vehicle for per­ 2:00 p.m./7-18-77 sonal reasons.

These conditions exist for several reasons. First among them is personal assignment of State vehicles (see previous finding). Personal assignment of motor vehicles precludes any meaningful attempt

-22- to develop a system of control. Although State vehicles are to be used only for official State business, an individual allowed to conmute in one may well use it to drive to lunch, while other tax­ payers and State employees who are not assigned vehicles must pro­ vide their own transportation. Also, State vehicles involved in conmuting may be used for personal errands such as stopping at the grocery store, driving to the bank, etc. Second, guidelines concerning personal use are not enforced. The IMVM Manual states, "State-owned motor vehicles are authorized for use in the performance of all travel or tasks necessary to accomplish Official State Business that is within the rated design capability of the vehicle." The Manual further states, ''When in doubt, the deciding criteria must always be that the performance of the travel or task clearly serves the interest of the State of South Carolina and shall be defensible in the event of public criticism or question by higher authority." However, under the existing system, actual policy regarding vehicle use is established at the agency level because IMVM is not authorized to enforce the rules. Third, agencies' philosophies and attitudes vary substantially regarding the proper use of State vehicles. The result is that some agencies are permissive in the way vehicles are used while a few are strict in their control. IMVM is authorized to take complaints from citizens concerning misuse and abuse of State vehicles and then fonvard them to the agencies for action. Agencies have the obli­ gation to ensure that all vehicles are used in accordance with the best interests of the State, to investigate all complaints con- cerning misuse and abuse and to take disciplinary action when necessary.

-23- The Cotmcil has fotmd, however, that State agencies often display negative, hostile or indifferent attitudes toward citizen inquiries about questionable use of State vehicles (see examples on p. 21, 22). This variance in attitudes can also be seen among persons who are assigned vehicles. Some d.ri vers argue that personal use of State vehicles is justified as seen in the following excerpts from agency responses to inquiries: "I see nothing wrong with making a stop at a store to make a purchase en route home or to work rather than driving home and returning back to the store several miles in a privately-owned vehicle." I drive the car to and from work and to ltmch on a daily basis. I have also driven the car during working hours for an appointment with a doctor, a visit to the bank and other personal errands." "It is somewhat sad when one cannot stop for a pack of cigarettes only to be harrassed by an allegation of misuse of a State vehicle." "I drove the car directly to •• passing· the Astra III Theater a few minutes before 7 : 00. The movie was one I had wanted to see, so I drove into the lot, parked and after the movie drove the car to its usual space. Rather than misuse the car, I used it extremely efficiently." "Conunon sense would tell a person that I am only human and must at times pick up a loaf of bread from a grocery store or other personal effects for hygiene, etc. from time to time."

The Budget and Control Board's official policy states that individual assignment does not automatically qualify one for commuting privileges and that "on call" does not, in itself, justify authorization to drive a State vehicle between home and work. In evaluating assignments based on the "on call" justification, "The urgency of employee's availability and frequency of actual call in must be factually justified •.• ," according to the MOtor Vehicle Management Manual.

-24- Commuting free of charge in a State-owned vehicle is a special privilege regardless of whether it is for the regular work shift or for "on call" assigmnents. Use of a State car for coiJJIUting, driving to lunch and other personal business allows some State employees to receive disproportionately higher compensation than those employees who mst provide their own transportation. My such salary supplement is in violation of Section 129 of the FY 77-78 Appropriation Act. Since the U. S. Internal Revenue Service considers commuting to be a personal expense, free use. of a State car for personal transportation is considered to be taxable income.

As for other states, twelve of 31 responding to the Council's sur­ vey prohibit individuals from commuting in state vehicles except in special cases. Ten other states allow commuting only with special per­ mission. In Kentucky only law enforcement officials receive exclusive assigmnent of vehicles; agency heads do not. Three states that do allow commuting in a state vehicle charge the driver for commuting mileage • .All these states prohibit personal use of state-owned vehicles.

Commuting and other personal use of State motor vehicles results in expenditures of public funds for purposes other than the official business of the State. It is estimated that these practices cost the State over $450,000 in FY 76-77. In addition, the benefits of these practices accrue to the State employees involved, not to the State or its citizens.

Need for a Mbre Effective Interagency ~btor Pool The Council found that the current motor pool operated by General Services fails to meet the State's needs adequately. Managed by the

Supply, ~btor Pool and Warehouse section of the General Services Division

(GSD), the pool consi~ts of approximately 275 vehicles but only sL~

-25- vehicles are available for interagency dispatch. The other vehicles are leased to State agencies, and most of these leased vehicles are

permanently: assigned to individuals within agencies. The few available vehicles are usually reserved at least one month in advance. Many of the vehicles leased to agencies are underutilized. According

to a rMVM criterion, assigmnents should be based upon official travel requirements of at least 18,000 miles per year or 1,500 miles per month.

Yet the Council found that an average of 76 GSD leased vehicles were driven

less than 1,500 miles per month d~ring FY 76-77. Table 2 details this

finding.

TABLE 2

SlM4ARY OF GENERAL SERVICES LEASED VEHICLES DRIVEN LESS

TiiAN 12 500 MILES PER IDN'IH DURING FY 76-77

'-

Less Than 800-1000 1000-1200 1200-1400 1400-1500 Month 800 Miles Mires Miles Miles Miles Total July 28 18 14 18 9 87 August 17 5 25 17 9 73 September 10 14 12 30 3 69 October 17 10 15 13 8 63 November 23 10 20 13 13 79 December 24 16 24 23 10 97 ·January 23 12 18 20 11 84 February 18 9 18 19 11 75 March 16 12 16 9 12 65 April 16 10 16 24 14 80 May 17 10 19 24 11 81 June 27 10 12 9 11 69 Average Per Month 20 11 17 18 10 76

Through a break-even analysis, the Council determined that an individual nrust drive a minimum of 14,000 miles _per year (1,167

-26- per month) before purchase and operation of a State vehicle becone more economical than POV re~ursenent (see Appendix V}. During each month of FY 76-77 an average of 44 General Services Division leased vehicles were driven less than 1,167 miles per mnth (14,000 miles per year) • According to the Comcil' s break-even analysis, it would be mre economical for the State to provide POV reillbursements to these employees than assign them State vehicles. If this had been done the State could have saved over $37,000. The principles of effective fleet management dictate that these low mileage leased vehicles be reassigned for better utilization or eliminated from the fleet. GSD M:>tor Pool has not denied vehicles to persons who do not travel enough to warrant the use of a vehicle. When low mileage leased cars are

pinpointed on its mnthly report, GSD notifies the agency head and encourages them to make better use of these vehicles but no other action is taken. When notified, some agency heads voltmtarily relinquish low mileage cars to the motor pool, but GSD has required no one to take such

action. Budget and Control Board regulations state, "Personal vehicles shall not be used to accomplish official travel on a reimbursable basis when a State-owned vehicle is available and adequate." But, if the agency does not have its own motor pool and no GSD MOtor Pool vehicle is available, the State employee must use his own vehicle. The result of not having an adequate number of vehicles available for general dispatch is excessive reimbursement for the use of privately-owned vehicles (see next finding).

Inadequate Control Over Reimbursement For Use of Privately-Owned Vehicles The Comcil fomd that in many cases the State is reimbursing employees for use of their privately-owned vehicles (POVs) when use of a State-m-med vehicle would be more economical. State-owned vehicles

-27- are often assigned when POV reiDbursements would be mre economical. The cost of operating, maintaining and insuring a State vehicle, including depreciation, is approximately 12 cents per mile as com­ pared to the POV reinDursement rate of 14 cents per mile. The

Comcil performed a break-even analysis to detennine (1) how many miles would haw to be traveled to warrant buying and operating a State vehicle,. and (2) the maximum mileage at which POV reinbtn"sement

is economical. This analy~is included depreciation, insurance, gaso­ line, maintenance and administrative costs. Using this analysis the Comcil detennined that 14,000 miles would have to be driven annually (3,500 miles per quarter) before operating and maintaining a State vehicle becomes more economical than paying POV reimbursements (see

Appendix V) • Based on agency data submitted for the Fiscal Accomtability Act in FY 76-77, the Comcil identified 1,272 State employees who had each

received more than $500 in POV reiuDtn"sements during any single quarter. To receive this amount each employee traveled a minimum of 3,571 miles in a quarter. One hmdred sixty-fi w (165) of these employees traveled more than 3,571 miles during each of the quarteTS examined; 245 exceeded this mileage during two quarteTS. In each case, use of a State vehicle would have been more economical. The Cotm.cil identified about 300 State vehicles that do not attain 14,000 official business miles. In each of these cases it would have been mre economical to reimburse the drivers for use of their privately-owned vehicles. This condition is caused by several factors. First, State auto­ mobiles are often assigned on the basis of prestige rather than need for the vehicle (see p.l5). In many cases, these vehicles are not driven to the extent necessary to be more economical than POV

-28- reimbursement. On the other hand, State employees whose jobs require them to travel extensively often receive POV reimbursements rather than having a State car available to them. Second, not enough cars are available for general use through the General Services Division Motor Pool. Of the 275 vehicles in that pool, only six vehicles are available for interagency dispatch and these few vehicles are usually reserved at least one mnth in advance. Thus, the likelihood of getting a State car is limited and plans must be made well in advance if a car is to be requested. In many cases, individual agencies have no general use motor pools for automobiles.

In FY 76-77 IMVM proposed regulations which prohibited the use of personal vehicles for official travel ,when State vehicles are available. The proposal would have required a certificate from the appropriate mtor pool supervisor stating that a State vehicle was mavailable before POV mileage could be authorized. The Budget and Control Board has not yet adopted these regulations . However, Section 131 of the 19 77- 78 Appropriation Act states, "Employees are required to use the most economical mode of transportation ... ". It is cheaper and more efficient for employees who travel extensively to drive State-owned vehicles than to receive reimbursements for using their own cars.

A1 though a case by case cost difference of Z cents per mile may appear insignificant, it becomes very significant when applied to the millions of miles traveled statewide. The Comcil estimates that as Imlch as $6. 7 million was paid to State employees for mileage reimbursement in FY 76-77. At fourteen cents a mile, this amomts to more than 4 7 million miles of travel. (Appendix IV lists the estimated POV reim­ bursements for State agencies.) It is difficult to determine exactly

-29- how much of this mney is being wasted through underutilization of the existing fleet and excessive PfN travel. However, if State vehicle usage was substituted for 10% of the POV usage, the Comcil estimates the State could have saved as much as $94,000 last fiscal year and a similar anJJl.mt this fiscal year (two cents per mile savings for 4. 7 million miles) •

RECCM-mNilo\TIONS

mE FLEET MANAGER SIDJLD BE AU'IHORIZED TO APPROVE ALL INDMWAL ASSIGNMENTS PS WELL AS ALL OM4Ul'ING

IN STATE-OWNED VEHICLES. mE FLEET MANAGER SHOULD

DETERviiNE Nor CM.Y WHO GETS A VFRICLE BUr WHAT 1YPE

OF VFRICLE IS ASSIGIED BASED ON mE RJNCI'IONAL REQ.JIRIMENTS OF mE JOB. INDIVIIlJAL ASSIGNMENT CRITERIA SHOULD BE AS FOLLOWS:

(1) VFRICLES REQUIRED FOR INDIVIWAL USE BY nm GOVERNOR AND STATEWIDE ELECI'IVE STATE OFFICIALS.

(2) VEHICLES ASSIGNED TO LAW ENFORCEMENT OFFICERS Wlnl A NEED FOR A P:ERMANEITLY ASSIGNED VEHICLE

FOR PATROL, INVESTIGATION AND amER SUCH DUI'IES. TIIIS CRITERION DOES NOT IN ITSELF JUSTIFY VEHICLES

ASSIGNED TO CCM4ISSIONED CONSTABLES OR LAW ENFORCE­

MENT OFFICERS ASSIGNED TO AIMINISTRATIVE RJNCI'IONS.

(3) VEHICLES Wlnl HIGHLY SPECIALIZED EQUIPMENT WHICH CAN ONLY BE OPERATED BY AN INDIVIDUAL POSSESSING SPECIALIZED TRAINING OR TEOiNICAL

SKIU.S.

-30- ( 4) VEHICLES ASSIGNED TO INDIVIIlJALS \VHOSE OFFICIAL

BUSINESS TRAVEL IS IN EXCESS OF lliE MILEAGE

DETERMINED BY lliE FLEET MANAGER TO BE COST

BENEFICIAL TO DRIVE A STATE VEHICLE.

ALL EXISTING PERSONAL ASSIGNMENTS SHOULD BE REEVALU­

ATED BASED ON lliE CRITERIA STATED ABOVE. ASSIGN­

MENTS WHI

BEING ''ON CALL" TO RE'IURN TO ONE'S REGULAR Il1I'Y STATION SI-DULD NOT BE CONSIDERED SUFFICIENT JUSTI­ FICATION FOR PERSONAL VBUCLE ASSIGNMENT.

PERSONAL ASSIGNMENTS SHOULD BE REJUSTIFIED AND

REEVALUATED AT LEAST ANNUALLY. lliE FLEET MANAGER SHOULD ELIMINATE ALL PERSONAL USE AND UNNECESSARY CXM4l.ITING. CCM4JI'ING SHOULD BE

ALLOWED ONLY WHEN IT IS BENEFICIAL TO lliE STATE.

WHEN ~ING IS ALLOWED, A mARGE SYSTEM SHOULD BE

ESTABLISHED IN WHI

MILEAGE BASED ON lliE CDST PER MILE OF OPERATING lliE

STATE V:B:UCLE.

TiiE FLEET MANAGER SHJULD ENSURE TiiAT RULES AND REGUlATIONS MANDATING TiiAT STATE VEHICLES BE USED ONLY FOR OFFICIAL STATE BUSINESS ARE

STRICTLY ENFORCED.

-31- 1HE FLEET MANAGER SHOULD CLOSELY K>NITOR AGFNCf

RESPONSES TO CCMPLAINI'S AND ACI'ICNS TAKEN AND

ENSURE EQJAL ENFORCEMENT OF GUIDELINES AND

REGJLATIONS.

1HE FLEET MANAGER SHOULD REQUIRE 1HE SUBMISSION OF MJN'IHLY MILEAGE LOGS FOR ALL VEHICLES. ntF.SE

LOGS SHOULD DELINEATE a:M1UI'ING MILEAGE AND OFFICIAL

BUSINESS MILEAGE.

VEHICLES NOT ASSIGNED FOR PERSONAL USE SHa.JLD BE

MADE AVAILABLE FOR GENERAL USE IN .IN.r.ERAGENCY AND AGENCY MJIUR POOLS.

'IHE FLEET MANAGER SHJULD TAKE 1HE FOLLOWING STEPS

TO ESTABLISH .AN ADEQUATE INI'ERAGENt:Y KJTOR POOL:

- DETERMINE 1HE NllviBER OF VEHICLES NEEDED IN "* ~ .. ~ A GENERAL DISPATCH KJIDR POOL. SPECIFY FUNDING REQUIRS!ENTS, PERSONNEL REQUIRE­ MENTS, ETC. FOR A IDI'OR POOL ADEQUATE TO

MEET STATE NEEDS.

- ENFORCE 1HE RULE REQUIRING USE OF AVAILABLE STATE-OWNED IDI'OR VEHICLES BEFORE USE OF PRIVATELY-OWNED VFRICLES.

- REVIEW INDMDUAL ASSIGMENTS OF ALL LEASED

VEHICLES IN ACCORDANCE Willi mE REa::MfENDA­

TIONS ON PAGE 30.

-32- - .ASSIGN UNDERUTILIZED VEHICLES TO Tiffi GENERAL

USE POOL.

MANAGEMENT OF Tiffi GENERAL SERVICES DIVISION MJTOR

POOL SHOULD BE 1URNED OVER TO THE FLEET MANAGER.

-33- aiA.PTER I I I ACQUISITION AND REPlACEMENT OF STATE IDTOR VEHICLES

Introduction During the three quarters of FY 76-77 in which data was reported for the Fiscal Accountability Act (October-June) State agencies pur­ chased 2,251 motor vehicles at a cost of $13,670,140. The Council examined State policies, procedures and practices concerning motor vehicle acquisition and replacement and found four problem areas:

(1) In FY 76-77 many costly exceptions were made to the Budget and Control Board vehicle acquisition criteria; (2) The State autombile fleet (excluding law enforcement vehicles) consists of many vehicles that are larger, IOOre expensive and less energy efficient than necessary; (3) Eighteen vehicles were purchased after FY 76-77 contracts had expired; and (4) State vehicles are not being replaced in the most eco­ nomical manner.

Costly Exceptions to Acquisition Criteria

In FY 76-77, 222 intermediate or midsize automobiles were pur­ chased although less expensive compact cars were specified by the

Budget and Control Board's approved criteria. Each year, under the direetion of the Budget and Control Board, IMVM establishes classes of vehicles which State Purchasing can order for use by eligible State officials and employees. No exceptions are permitted without the approval of IMVM or the Budget and Control Board. The approved Class IV intermediate vehicle was the Pontiac Lemans

($4,564.80 each), and the AMC Hornet ($3,685.60 each) was the Class V

-35- compact. The intennediate car was to be used by heads of smaller agencies and by any deputy agency heads who drives in excess of 18,000 miles per year. The compact car was intended for use in motor pools and for assignment to eligible supervisors and employees who drive in excess of 18,000 miles per year. During FY 76-77 State agencies purchased 269 Pontiac Lemans and 19 .AMC Hornets. However, examination of acquisition criteria and DMVM vehicle request fonns submitted by agencies indicated that 4 7 Lemans and 241 Hornets should have been purchased. Thus, 222 ( 83%) of the 269 Lemans were purchased for individuals who did not meet the Budget and Control Board criteria for that car. DMVM officials admitted that many agencies had been allowed to purchase the larger car when they should have ordered the compact car. They explained that State agencies had harshly criticized DMVM in the previous fiscal year for forcing agencies to purchase the 1976

AM: Hornet. Agencies complained of difficulty in obtaining warranty service due to scarcity of AMC dealers in South Carolina, and many felt that the compact vehicles failed to meet their needs adequately. Rather than enforce or revise the criteria DMVM granted exceptions.

It is important that the appropriate size and type vehicle suited to the :ftmctional requirements of the job be purchased if the State is to economically spend its :ftmds and if gasoline is to be conserved. It is an unnecessary expenditure of State ftmds to purchase larger and more expensive vehicles than are needed. Exceptions to the Budget and Control Board criteria cost the State an additional $195,180 in FY 76-77.

-36- Actual Purchases FY 76-77 269 (93%) Pontiac Lemans bought at $4,564.80 $1,227,931 19 (7%) AMC Hornets bought at $3,685.60 70,026 288 Vehicles bought at a total cost of $1,297,956

Estimated Purchases if Criteria Followed 47 (16%) Pontiac Lemans bought at $4,564.80 $ 214,546 241 (84%) AMC Hornets bought at $3,685.60 888,230 288Vehicles bought at a total cost of $1,102 '776 Unnecessary Cost to the State $ 195,180

More Smaller Automobiles Are Needed South Carolina's autoJOObile fleet, excluding law enforcement vehicles, consists of 93% intermediate, standard and full-size cars. Compact and subcompact cars which are 100re economical to purchase and operate, and use less gasoline comprise only 7% of the auto­ JOObile fleet. The Council's agency survey revealed the following fleet profile by automobile size, excluding law enforcement vehicles:

Size·of Automobile % of Fleet

Full-size, e.g. Chrysler Newport 5 Standard, e.g. Plymouth Gran Fury 41 Intermediate, e.g. Pontiac Lemans 47

Compact, e. g. .AMC Hornet 6

Subcompact, e.g. Ford Pinto 1

The State has kept a high proportion of large cars in its fleet because of the prestige element in its vehicle acquisition criteria. These criteria (see p. 17), which determine the size and type of vehicle an agency may purchase, are based on the premise that a State employee deserves a certain size car according to his position

-37- or the size of his agency's budget. According to a 19 76 study by Rtmzheimer and Company, Inc., a major fleet and travel expense consulting finn, "too many finns still waste money by being too prestige conscious.'' In addition, exceptions are made to the existing criteria resulting in larger, mre expensive cars being purchased (see previous finding). In al.Ioost all cases except where high speed pursuit safety: .and stability are of prima:ty importance compact and subcompact cars are sufficient to meet the functional requirements of the job. They are also more economical to operate, especially in light of energy scarcity and increased fuel costs. Fourteen states responding to the Council's survey reported at least 75% of their fleets con­ sisted of intennediate, compact, and subcompact cars (54% in South Carolina) . Eleven states indicated mving toward the purchase of smaller vehicles with smaller engines as an energy conservation policy. The Federal GovernlOOnt is now purchasing almst all compact cars to achieve better fuel economr and conserve gasoline. In July 1977, the President of the United States mandated that Federal agencies could not purchase passenger autombiles (excluding vehicles used in law enforcement or emergency rescue work) unless the autombiles exceeded the average fuel economr standard for the appropriate model year as legislated by Congress (Executive Order 1200 3) . The auto­ mbiles purchased have to exceed the minimum standards by 2 miles per gallon (mpg) in FY 78, 3 mpg in FY 79 and 4 mpg in FY 80. This has resulted in the Federal Government purchasing almost all compact automobiles to achieve this standard.

-38- Cllanging the fleet mix would result in significant dollars savings as well as savings through conservation of gasoline. For example, if the State had eliminated standard and full-size vehicle purchases (excluding law enforcement vehicles) over the last four model years (197S, 1976, 1977, 1978) and all cars purchased were bought at a ratio of SO% intermediate and SO% compact cars the State would have saved: (a) $706, 304 in ptn"chase price

(b) 489,201 gallons of gasoline (based on EPA estimates) (c) $244,600 in the cost of the gasoline (at the State cost of 50 cents per gallon) If subcompact cars were added and the percentage of inter­ mediate cars reduced, savings would be even greater. For the detailed analysis see Appendix III.

Vehicles Purchased Outside of State Contract

Eighteen (18) 1977 vehi~les were ptn"chased after FY 76-77 con­ tracts obtained by State Purchasing had expired. In this instance, the State was able to obtain thirteen (13) of these vehicles from dealer stock at the original contract price even though the contract expiration dates established by the manufacturer had ruri out, but there is no guarantee that the same circumstance will continue to occur.

State contracts based on dealers' bids are awarded for a period from November to April or May of each fiscal year depending on t.i.e manufacturer's production schedule. The contract period appears to create problems for many agencies primarily because of poor planning. In most agencies the purchase of vehicles is generally a low priority budget item. In some cases, although agencies know they need parti­ cular vehicles, they may delay purchases tmtil later in the fiscal year

-39- to be certain necessary ftmds are available. In the past it seems that sone agencies have intentionally delayed ordering vehicles until contracts expired because they did not want the particular model under contract. However, this practice has almost been eliminated through IMVM's close scrutiny of this type of request.

State contracts are established in order to purchase vehicles

at the best possible price. Buying vehicles after a contract has ended defeats this objective. The Budget. ·and Control Board's acquisition regulations allc:M vehicle purchases to be made outside of contract only if need for the vehicle is sufficiently justified when the requisition is submitted.. Ptn-chase of a mtor vehicle to prevent loss of funds at the end of a fiscal year is not con­ sidered valid justification. When a vehicle is purchased outside of the contract, the State not only loses the best price but it must generate additional paperwork to obtain the vehicle. The excess cost of non-contract purchases can be considerable. For example, a State agency pur­ chased a 1977 12-passenger van for $6,617.58 after the contract had expired. The same van cost $1,296.95 (20%) less under contract.

Uneconomical Replacement of State Vehicles State vehicles are not replaced in a systematic or timely manner to ensure the most economical use of the State's fleet. Cur­

rently the State has no way to detennine the most economical timing for vehicle disposal. Most agency vehicles have very high mileage (100,000+ miles) when sold and many agencies run vehicles into the ground before replacing them. At one public auction visited by the

-40- Council, State vehicles were sold for scrap because they had been stripped of all usable parts once they had stopped running. Also, most agencies lack personnel with the expertise or time to ade­ quately oversee proper replacement cycles. Agency vehicles except DHPT's and Department of Education school buses are sold by the Division of General Services. (DHPT' s vehicles and Department of Education school buses may by law be sold by these agencies.) When the Council reviewed vehicles disposed through General

Services' public auctions in FY 76-77, it found· that 38 agencies had sold 660 vehicles for $584,698.15 after auctioneer and General Services fees had been deducted. However, neither General Services, IMVM, nor any agency has analyzed vehicle sale prices over time to detemine the best age arid mileage criteria for vehicle disposal.

Since each agency is responsible for its own vehicles and retains title to them, each one detennines when to replace them depending not only on each vehicle's condition but also on the agency's budget. Since vehicles usually are a low budget priority, in many cases no money is available for replacing them. Rather than plan carefully, agencies may simply wait tmtil the end of the fiscal year to see if any money is left in the budget for a new vehicle. A vehicle replacement cycle policy set at the proper mix of mileage/age is necessary if the State is to get the most economical use of its fleet. IMVM' s guideline is four years or 60, 000 miles . In its 1976 study Rtinzheimer and Company, Inc. reported that most businesses replace their cars at three years or 60,000 miles, which­ ever occurs first. Runzheimer states that this policy ''has proven

to be the sotmdest approach to efficient cycling of vehicles in recent years . " The report goes on to state that "mileage beyond

-41- 60 ,000 will invariably result in abnonnal maintenance expenditures due to major component failure." In addition to maintenance expenditures, factors to consider in choosing a replacement cycle are safety, vehicle reliability, and a driver's tendency to care less for an older, higher mileage State vehicle. Scheduling replacements is also important because certain times of the year are better for selling used vehicles and agencies can obtain new vehicles only during a few months of each year due to contract restrictions.

The results of a lack of a systematic method for replacing vehicles can be higher fleet costs to the State due to lower resale values, higher maintenance costs, more vehicle repairs, and less efficient use of mechanics'' time. Since no unifonn infonnation on repair costs are gathered in the State, the Council cannot accurately estimate how much the State could save in this area. However, savings definitely could be achieved.

RECCM1ENDATIONS

rnE FLEET MANAGER SHOULD DOWNSIZE rnE AUf(M)BILE

FLE?f AND ACQUIRE CARS TO AOIIEVE A FLEET MIX

OF INfERMEDIATE, COMPACT AND SUB

AClfiEVE rnE GREATEST POSSIBLE ECONCMY. rnE

MINIMlM FUEL ECONCMY STANDARDS ESTABLISHED BY

rnE FEDERAL GOVERNMENT FOR ITS AUT(M)BILES (20

MPG IN FY 77-78, 22 MPG IN FY 78-79, 24 MPG IN

FY 79-80) SHOULD BE USED IN PURrnASING PASSENGER

AUfCMJBILES FOR rnE STATE. rnE FLEET MANAGER

SHOULD A~UIRE lliESE VEIUCLES BASED ONLY ON TIIESE

FUEL ECOIDMY STANDARDS, ON USAGE REQUIREMENTS AND

-42- NOT ON PRESTIGE FACI'ORS. IF REQUESTED BY mE PARTIES INVOLVED, EXCEPTIONS SHOULD BE MADE IN mE CASE OF AIJTCM)BILES PROVIDED TO mE GOVERNOR, STATEWIDE ELECTIVE STATE

OFFICIALS, AND SUOi HIGIWAY PATROL AND STATE

LAW ENroRCEMENT DIVISION PERSONNEL AS ARE

JUSTIFIED. IN KlST CASES COMPAct AND SUB- C()t1PACr CARS ARE ADEQUATE FOR INDMDUAL

ASSIGNMENI'S AND. SHOULD BE USED.

ALL VEHICLES SHOULD BE PUROlA.SED UNDER CON­

TRACI'S ESTABLISHED BY STATE PUROiASING. EX­

CEPTIONS SHOULD BE SPECIFICALLY AUIHORIZED

BY THE FLEET MANAGER.

ALL STATE K>TOR VEHICLES SHOULD BE TITLED

TO THE STATE OF sourn CAROLINA AND RETAINED BY THE FLEET MANAGER EXCEPT TITLES TO

SOiOOL BUSES OPERATED BY mE DEPAR'IMENT

OF EDUCATION AND VEHICLES OPERATED BY DHPT.

A SYSTEMATIC REPLACEMENT CYCLE POLICY SHOULD

BE ESTABLISHED AND AIJ.fiNISTERED BY rnE STATE

FLEET MANAGER FOR ALL STATE VEHICLES. THE

FLEET MANAGER SHOULD PLAN AND COORDINATE

R.mJRE NEEDS Willi ACQUISITION AND REPLACEMENT

SCliEDULES TO ENSURE THE IDST EFFICIENT AND

ECONOOCAL USE OF THE STATE'S FLEET. INFOR­

MATION ON VEHICLE ~1ILEAGE, TOTAL MAINfENANCE

-43- COSTS AND RESALE PRICES SHOULD BE GATHERED

AND ANALYZED FOR PROPER MANAGERIAL CONI'ROL

AND ASSISTANCE IN 1HIS RJNCTION.

-44- CliAPTER IV

IDENTIFICATION OF STATE-OWNED VEHICLES

Introduction The South Carolina Code of Laws and Budget and Control Board regulations require that most State-owned vehicles be identified throuih the use of "State Government" license tags (SG tags) and agency decals. Some exceptions are granted, mostly for law enforcement vehicles. The Cotmcil examined State procedures and practices concerning · identification of State-owned vehicles and assignment of unmarked vehicles (non-SG tags, no decals). The Cotmcil fotmd that: (1) Records concerning the mmi:>er and assignment of unmarked automobiles are conflicting; (2) Many agencies and personnel possess unmarked cars although they do not meet established criteria for possessing such cars; (3) Unnecessary exceptions exist to regulations that require State-owned vehicles to be identified by State seals and/or agency decals; and ( 4) The method used to identify State automobiles (annual registration) is inefficient and costly compared to the method used to identify other State vehicles (permanent registration).

Conflicting Records Concerning Unmarked Automobiles The Cotmcil fotmd that records concerning the number and assignment of unmarked cars are conflicting. In fact, the exact number of approved non-SG tags held by each agency is unknown.

-45- Although three State agencies (SLED, IHPI', IMVM) retain some records of non-SG tag approvals, the number of these approvals

' .. recorded varies depending upon the source. SLED maintains a file of approvals for non-SG tags, but SLED officials admit that it is inacctn"ate and not updated on a regular basis. The Department of Highways and Public Transportation (DHPT) requires a form signed by the Chief of SLED before issuing non-SG license plates and their computer files are probably more accurate. IMVM' s monthly inventory printouts include tag information as reported by State agencies, but records of non-SG tags are not reconciled to SLED approvals or DHPT' s computer files . The discrepancies found by the Council in non-SG tag records are shown in Table 3 (next page). This situation exists primarily because no mechanism has been established with the mandate and authority to maintain such records. In addition, the Chief of the State Law Enforcement Division, who must approve these assignments, has no staff for investigating all requests fully and does not feel that this function results in the best use of SLED personnel. Without accurate records concerning the number and assignment of unmarked vehicles it is difficult to ensure that all such assign- ments are legitimate. State laws require identification of most State vehicles, but overall compliance with these laws cannot be determined without actually examining each agency's fleet. To a great extent, each agency assigns and uses unmarked vehicles at its own discretion.

-46- TABLE l NUMBER OF NON-SG TAGS

Division of Motor Department of Chief of VehiaU~ Manage-· Legislative Audit Highways SLED's File ment's Inventory Council's Survey &Public of Approvals Printout of State Agencies Agency Transportation (July 1977) (April 19.17) (May ~~77) ABC Conmission 34 32 32 32 Aeronautics Conmission 4 3 3 3 Department of Corrections 10 10 10 16 Health & Envir. Control 11 6 6 4 Dept. of Youth Services 10 6 6 6 Gen. Services Motor Pool 45 2(SeeNote 1) · 21 4l(SeeNote 2) Employment Security Comm. 6 5 3 5 High. &Pub. Transportation 14 25-40 O(SeeNote3) O(SeeNote3) State Law Enforcement Div. 202 Not in File 163 191 Public Service Authority 1 1 0 No Response Tax Commission 3 33(See Note 2) 0 3 University of S. C. 1 3 1 1 Wildlife & Marine Res. 8 7 6 6 ~ Comptroller General 1 Elected Official 0 1 ~ Dept. of Agriculture 1 Elected Official 2 1 Attorney General 1 2- 3 1 1 Lieutenant Governor 1 Elected Official 1 1 Secretary of State 1 Elected Official 1 1 Department of Education 1 Elected Official 1 1 Treasurer 1 Elected Official 1 1 Insurance Department 0 2 0 0 Bd. of Medical Examiners 0 1 1 1 P/P /P Board 0 4 (See Note 2) 0 0 Dept. of Social Services 0 9-10 (See Note 2) 0 0 Adjutant General 0 Elected Official 1 1 AlcohcH & Drug Abuse Conm. 0 0 0 1 Governor's Office 0 Elected Official 1 1 Criminal Justice Academy 0 0 1 1 Local Gov. (Gov. Office) 0 l(SeeNote 2) 0 1

Nq~e 1: Vehicles for the Sergeant-at-Arms of both the House and Senate. Vehicles carried on SLED's inventory. Note 2: Some of these vehicles are leased from the General Services Motor Pool. The June Motor Pool Inventory shows the following non-SG tags: Tax COIIIllission - 27 Department of Social Services - 9 .P/P/P Board - 4 Governor's Office - 1 Note 3: Fourteen vehicles have both SG and non -SG tags. SG tags are to be used when the vehicle is not being used for investigation work.

'"· Inappropriate Assignment and Use of Unmarked Vehicles

The Cotmcil fotmd that many agencies and persormel possess unmarked State automobiles although they do not meet established criteria for possessing such cars. The South Carolina Code (Section 56- 3-1710) requires that all State-owned motor vehicles be identified by State Government license plates except for "the automobile. supplied for the Governor's personal use, automobiles supplied to law enforcement officers, when in the opinion of the Chief of the South Carolina Law Enforce­ ment Division it is advisable that such automobiles not be so marked, and automobiles supplied to State-wide elective State officials." However, examination of actual assigmnents indicate that these cri­ teria are often interpreted to include administrators. For ex:a.nq:>le, one State agency has acquired non-SG tags for vehicles assigned to its Executive Director, Deputy Director and three Conmissioners. The ten non-SG license plates authorized for another agency were for the Commissioner, three Deputy Commissioners, two Regional Administrators and other administrative persormel. In other cases, exceptions are granted on the basiS of occa­ sional need which may not be actually related to law enforcement :flm.ctions . The following excerpts from requests for non-SG tags illustrate this point:

(1) "The vehicles ..• are used periodically in tmdercover work relative to persormel." (2) ''This request is made due to the fact that we do use these four cars as tmder­ cover cars and 'agent cars ' on many occasions." (F.mphasis Added)

-48- Even in cases such as these the requests are often for admin­

istrators rather than investigative persormel. The first agency made the request quoted above for its Comnissioners. The request from the second agency was for its three Conunissioners and its hearing officer.

This situation is caused, to a great extent, by unclear defini­ tion of the tem "law enforcement," the lack of a mechanism specif-. ically designed and mandated to approve and control the assignment and ·use of unmarked State vehicles and a long tradition of assigning autorobiles on the basis of prestige rather than function (see Chapter II). The intent of the law regarding State vehicle identification is unclear regarding the definition of law enforcement officers who

may obtain non-SG tags. Chief J. P. Strom of SLED has stated that

''Th.e only vehicles of any government agency that would be authorized regular (non-SG) license tags by me were those assigned to investi­

gative units of agencies and departments that have a law enforcement function. Each of these will be examined on an individual basis to determine if there is a need for the vehicle to bear license tags other than 'SG'." The phrase "law enforcement ft.mction" is nebulous and applies to many agencies as currently used.

In addition, while the law requires approval from the Chief of the State Law Enforcement Division, no mechanism exists for performing this function. The SLED Chief makes the decision based on his knowledge of the situation but does not feel that it is the best use of SLED personnel to investigate the requests thoroughly.

-49- Unmarked cars should be used only by personnel who are actively involved in undercover law enforcement work to the extent that the actual investigation of criminal cases or the investigators ' physical well being would be jeopardized if they were identified. Under the current system accountability is reduced because agency administrators and other personnel are able to use tmmarked vehicles at theiT own discretion and are shielded from public scrutiny. Mis­ use of these vehicles is al.mst impossible to detect and such misuse results in public funds being wasted.

Unnecessary Exceptions to Decal Requirements The Comcil fo'Uild that unnecessazy exceptions exist to the requirement that State-o~ed mtor vehicles be identified with appropriate decals. The Budget and Control Board's approved regulations require all State-owned motor vehicles to be identified by a State seal and the agency name. This requirement is based on the premise that "clear, highly visible identification of publicly owned vehicles serves as a particularly effective deterrent against potential unauthorized usage, vehicle abuse and/or excessive high­ way speeds . "

The regulations continue by stating, ''Vehicles assigned to heads of State agencies, boards and conmissions, and presidents of institutions of higher learning shall be exempt from dis­ playing decals and identifying strips . " In addition to this blanket exemption for agency heads, other exceptions can be granted by the Budget and Control Board. In December 1976

-so- two State agencies received unaniloous approval from the Board to exclude certain vehicles from all identification markings except the SG tag. Vehicles used by the first agency's administrative per­

sormel (Cotmnissioner, Deputy COliiDi.ssioners, Superintendents and Directors of Agency Facilities) as well as certain resident-canying

vehicles were e~mpted from the standard marking requirements. This agency's officials admitted that the administrative vehicles were not ordinarily used to transport patients • The second agency's

exemption request included administrati~ vehicles assigned to its

Commissioner, Deputy Comnissioner, Superintendents and Social Workers (two per region) as well as vehicles used to transport residents. Justification for these exemptions were given by the agency's Com­ missioner in a letter to IMVM dated SepteDbei:_ 20, 1976, which reads,

"Except for the six management sedans, for which there is a pro­

fessional need for anonymity on occasions, this request is based on the need to preserve the basic and human rights of our residents,

including their right to privacy by a~iding the biases associated

with the label of ~gency name] . " In both cases, justifiable ·exemptions for resident transportation vehicles were granted, but exceptions were also approved for administrators' cars.

The fact that excessive exceptions are granted is apparently a result of the traditional practices of (1) assigning vehicles on the basis of position or prestige rather than need and (2) allowing top administrators to use unmarked vehicles. No reason for the blanket exception is included in the regulations . Protecting the privacy and other rights of citizens justi­

fies the use of vehicles without decals in some cases but does

-51- not justify exemptions for administrative personnel. The absence of decals on adm:inistrative cars decreases accotmtabili ty and increases the potential for abuse and waste of public ftmds.

Annual Registration of Autonmiles is Inefficient

The annual registration of State vehicles not legally pro- vided with permanent license tags is inefficient. Section 56-3-780 of the 1976 Code of Laws requires DHPT to issue permanent license plates for all State-owned buses, trucks, mtorcycles, trailers, semi­ trailers and pole trailers. These permanent plates bear the words "South Carolina," and a number with an SG prefix designating "State Government." All other vehicles operated by the State are registered and licensed annually. No reason for this practice is given. Such registration wastes time and adds unnecessaey paperwork. To pay the registration fee of one dollar per vehicle, an interdepart­ mental transfer (IIrr) is issued when an agency registers its vehicles. This transfer of :ftmds from State agencies to IHPT serves no useful purpose.

Officials at DHPT and DMVM agree that amending the law to require permanent license tags for all State vehicles would save time, trouDle and unnecessary expense.

RECCMv1ENDATIONS 'IHE STATE _FLEET MANAGER, IN CONSULTATION wrrn: TiiE OOEF OF TiiE SOUIH CAROLINA LAW ENFORc::e4ENT DMSION, SHOULD BE RESPONSIBLE FOR AUI'HORIZING ISSUANCE OF NON-STATE GOVERNMENT LICENSE TAGS TO LAW ENFOR.CEMENT OFFICERS.

-52- 1HE FLEET MANAGER SHCXJLD INVESTIGATE ALL RFQUBSTS FOR :OON-SG LICENSE PLATES FOR STATE-OWNED VEHICLES AND GRANT APPROVAL ONLY ON Tim BASIS OF NEED. ALL

EXISTING APPROVALS FOR NON-SG TAGS SHOULD. BE REEVAL­ UATED ON nus BASIS. A CCl4PLETE LIST OF APPROVALS SHOULD BE MAINfAINED AND USE OF Tim TAGS SHOULD BE

MJNITORED ON A REGJLAR BASIS.

ALL STATE-OWNED VHUCLES SHOULD BE IDENTIFIED

WI'ni APPROPRIATE DECALS EXCEPI' IN n1E CASE OF

VHiiCLES SPECIFICALLY EXEMPTED BY Tim FLEET MANAGER. REQUESTS FOR EXIMPI'ION SIDULD BE SUBMITTED IN WRITING WI'ni CCMPLETE JUSTIFICATION.

1HE REGULATION .AUI'GfATICALLY EXEMPI'ING HEADS OF STATE AGEK:lFS, BOARDS AND CCM4ISSIONS, AND PRESIDENI'S OF INSTIIDriONS OF HIGHER LEARNING SHOULD BE ELIMINATED. ALL EXISTING EXEMPTIONS

SHOULD BE EVALuATED BY 1HE FLEET MANAGER AND ANY UNNECESSARY EXEMPI'IONS SHOOLD BE REJECTED. ALL FU'llJRE REQJESTS SHOULD BE GRANTED BASED SOLELY

ON NEED.

PERMANENT LICENSE PLATES SHOOLD BE USED FOR

ALL MJI'OR VEHICLES OPERATED BY niE STATE.

-53- CHAPTER V

MAINTENANCE SYSTEM AND GASOLINE PUROIASFS

Introduction In order for the motor vehicle fleet to operate, it must be maintained and supplied with various fuels, lubricants, parts and other supplies . The Council examined the State's activities in these areas and identified the following problems: (1) There is wide variance among agency maintenance pro­

grams in the quality and types of work perfo~d and in the condition and operation of maintenance facili­ ties. About 10% of the State's fleet is maintained by mre expensive commercial vendors; (2) Excessive amounts of gasoline are purchased from com­ mercial vendors rather than rore economical State supplies; and (3) The State credit card system that was designed to replace commercial credit cards has not been fully imple­ mented.

Inefficient Maintenance System The State's vehicle maintenance facilities vary widely in the quality and types of work perfonned and in their condition and operation. Nineteen State agencies, universities and colleges have their own maintenance facilities available to about 14,730 State vehicles. Fifty-two other agencies owning about 1,470 vehicles allow commercial vendors to perform their maintenance. Eleven of the 19 agencies have maintenance facilities located in the Columbia area. These agencies do not share facilities and they only work on their own vehicles. Many of these facilities operate in close proximity of each other allowing for possible duplication or underutilization of facilities. For example, on a two-mile stretch on Columbia's Broad River Road four agencies

(DYS, SLED, Corrections and Forestry) operate separate maintenance facilities . Also, IHEC, Mental Health's Crafts Farrow Hospital and Mental Retardation's Midlands Center operate separate facili­ ties within a few miles of each other. Of the dozen agencies visited by the Council, ten (10) have their own maintenance shops. Several of these facilities are well­ organized and well-operated. Others are dirty and cramped, keep poor records and lack efficient parts purchasing. Some agencies have poor inventory control over parts and many do not have a uni­ fonn preventive maintenance program. Six of the agencies examined perfonn only minor mechanical work and send major work to a commer­ cial vendor. The other four agencies examined dO almost all the work their vehicles need. The current situation exists because the State has no unifonn system for maintaining all of its vehicles. Traditionally each agency is autonomous and responsible for controlling and maintaining its own vehicles. Thus each agency operates its facilities according to its available resources and budget priorities. Statewide coordi­ nation and sharing of facilities does not exist because no one has ever been given the authority or responsibility for such a task.

-56- The State's vehicle fleet should be kept in the best possible condition and maintained in the most economical and efficient marmer. Well maintained vehicles are safer and IOOre economical. A systematic maintenance program would keep State vehicles in better condition and reduce the likelihood of costly major repairs. The current system is inefficient and results in a higher main­ tenance cost for the State's fleet. Sane agency vehicles receive good maintenance, others do not. Since uni.fonn maintenance cost information is not gathered from agencies, no meaningful management analysis on the operation of a vehicle, a ~acility or the State fleet as a whole is possible. With the present system the State loses the economic benefit of large-scale automotive parts buying and of any mechanic specialization which could develop through a coordinated system. Also agencies cur­ rently have no way to share innovative ideas. When an agency develops an efficient maintenance practice:, the idea often fails to reach other facilities. For example, 1EPI' periodically invites representatives of car manufacturers to teach classes for its mechanics; yet, mechanics from other agencies do not participate in these classes. Substantial savings could also be achieved by incorporating the approximately 1, 4 70 vehicles being serviced at conmercial vendors into the existing State's facilities. Based on General Services Division's maintenance costs at commercial vendors and DHPT's maintenance costs at its ow.n facilities, the State's savings could be at least 2 cents per mile. If these 1,470 vehicles now maintained at commercial vendors were maintained at State facilities and averaged 15,000 miles per year, the State's savings would be $441,000 annually.

-57- Excessive Commercial Gasoline Purchases Tl:l,e State beys large quantities of comnercial gas even though gas is available at State facilities at 11D.lch lower cost. According to the Energy Management Office, the State purchased a total of 21,924,346 gallons of gasoline in FY 76-77 (for a complete listing see Appendix VI). It is estimated that at least 678,189 gallons (15% of purchases other than Department of Education and IHPI') were com­ mercial purchases.

Total Purchases FY 76-77 21,924,346 gallons Less: Dept. of Ed. (Primarily State gas to operate over 6,000 school buses) - 10,356,791 gallons Less: SCDHPT (estimates 100% State gas) 7,046,294 gallons St.btotal 4,521,261 gallons Estimated Percent of Commercial Gas Bought X 15% Estimated Minimum Comnercial Gas Purchases 678,189 gallons

Several agencies are violating a IMVM regulation which specifies that, "State credit cards shall not be used at comnercial outlets except where no State facility is reasonably available. In this event, purchases shall be in the am::n.mt to enable the user to obtain or reach State sources." Some agencies do strongly emphasize purchasing State gasoline. For example, SLED agents are required to justify all comnercial gas purchases on the back of their daily reports. Since these reports are closely ronitored, agents have been required to pay the price difference when a comnercial gas purchase was not justifiable.

Other agencies purchase large amotmts of commercial gasoline. In FY 76-77 Clemson University's commercial gasoline purchase equalled approximately 30% of its total gas purchases. In the same year the Conmuni ty Mental Health Programs purchased over half of their gas from comnercial sources. The General Services Motor Pool bought 27%

-58- of its gasoline from commercial sources despite a written policy urging drivers to use State facilities. Examination of General Services' Motor Pool's conunercial gas purchases from February through April 19 77 showed that over one-fourth of these purchases had been made in the Columbia area, often close to available State gas facilities. The Department of Mental Health conunercial gas vouchers revealed that some commercial gasoline was bought in the Columbia area despite the fact that the Department has two pump locations as well as access to DHPT facilities. The availability of State gas plimps and the degree of pressm-e that agency administrators place on their drivers to use these facilities affects the amount of commercial gasoline purchased. Only one agency, DHPT, makes its gas facilities available on a statewide basis. Some agencies do not even have the State credit card or DHPT courtesy cards both of which would allow drivers to use DHPT' s gaso­ line facilities. The following table lists all agencies with gaso­ line pumps and the availability of the pumps to other agencies.

-59- Nl.Dllber of Gasoline Available for Locations Statewide Use

General Services Motor Pool 1 No SLED 1 No Department of Corrections 19 No Department of Education 43 No Dept. of Health & Environ. Control 1 No Clemson University 1 No University of South Carolina 1 No Department of Mental Health 2 No Department of Mental Retardation 4 No Dept. of Highways & Public Trans. 162 Yes Forestry Commission 8 No Wildlife &Marine Resources Dept. 25 No Department of Youth Services 1 No Aeronautics Commission 2 No* The Citadel 1 No School. for the Deaf & Blind 1 No Educational Television Network 1 No John De La Howe School 1 No Medical School 1 No Ports. Authority 4 No Public Railways Conmission 1 No

* Aeronautics Conmission sells gas to the Wildlife and Marine Resources Department.

It is to the economic advantage of the State to use State-owned gasoline facilities whenever possible. Gas purchased at State facilities costs about fifteen cents per gallon less than commercial gas since State gas is bought in bulk through a Central State Purchasing contract.

Based on this price difference the 678,189 gallons of commercial gas

purchased in PY 76-77 cost the State ~ additional $101,728. If the State's commercial gasoline purchases were reduced by only 25%, such a reduction would have save_d $25,432 in EY 76-77.

State Credit Card System Not Fully Implemented In 1976, the State of South Carolina developed its own gasoline credit card to replace numerous commercial cards being used by State agencies. This card is accepted by ten commercial oil companies and at

-60- IIIPT facilities . Of the 58 agencies reporting credit card use on the

Council's survey, 39 (67%) continue to use commercial credit cards with the State card or use only conmercial credit cards.

The major reason that agencies are reluctant to eliminate all their conunercial credit cards is that they have experienced some problems in getting the State card accepted at conmercial stations, particularly those out-of-State. The problems seem to have abated somewhat with the continued use of the card. Other states using a state credit card program have found that a card must be used about a year before being generally accepted. In addition, agencies not participating in the State credit card program seem uninformed as to why the program exists and what it can do for them. For example, Clemson University officials stated that they had learned about the State credit card only prior to the Council's visit and remained uncertain about how the card would fit into their current system. In another case, the Forestry Commission had devoted much effort in establishing its own workable system prior to the creation of the State credit card and is reluctant to make changes in this system.

Another problem encountered by agencies in using the State credit card is the time lag in receiving new or replacement cards. Although agencies need to replace lost, stolen or broken cards and to obtain new cards quickly, often they must wait three to four months. In the current system cards are obtained through General Services' Central

State Purchasing which sends blank cards to New Jersey about four times a year for enbossing the account ntmlbers. This time consuming process is tmnecessary since the IliPT embossing machine (which is cur­ rently used to print the DHPT account number on the card) could be used to print other account numbers too.

-61- The State credit card was created to improve the billing system and to provide more effective management controls since one card is easier to control than many. Savings in the purchase of gas and oil can be realized if it is used at any IHPr maintenance facil­ ity rather than being used to purchase mre expensive COliJIIercial products.

RECCM4ENDATIONS

1HE FLEET MANAGER SHJULD EST.ABUSH A COORDI­ NATED GARAGE OR MAINTENANCE SYS'll.M UfiLI ZING EXISTING FACILITIES AND MAINI'ENANCE PERSONNEL. 1HE MA.INI'ENANCE SYSTEM Sf:DULD INCLUDE: (A) CENTRAL PUROiASING OF ALL .AI.mMJI'IVE SUPPLIES

AND PARI'S, (B) AN INVENTORY CONI'ROL SYSTFM, (C) A UNIFORM \\ORK ORDER AND RE

PROGRAM, AND (E) IN'I.'ERAGEN:Y SHARING OF FACILITIES.

USE OF <:X:MERCIAL VENOORS SHOULD BE ELIMINATED TO 1HE MAXDI.N EXI'ENl' POSSIBLE. VHUCLES 'OOW MAINTAINED BY a:MERCIAL VENOORS SHOULD BE BRDUGtT UNDER 1HE STATE SYSTIM.

1HE FLEET MANAGER SHOUlD REQUIRE 1HE R.JROIASE OF STATE GASOLINE WHENEVER POSSIBLE. MANAGE­ MEN!' REPOKI'S SHOULD SEPARATE STATE AND CXM­ MERCIAL GAS PURaiASES FOR CAREFUL MCNITORING. ALL CCM4ERCIAL GAS PURCHASES SHOULD BE JUST!­ PIED. IF NOT JUSTIFIED 1HE EMPLOYEE MAKING

-62- 1HE PUR.OIASE SIDULD BE REQUIRED TO REFUND niE DIFFERENCE BE'IWEEN 1HE STATE PRICE

AND 1HE a:M1ERCIAL PRICE. EXISTING STATE

GASOLINE FACILITIFS SHOULD BE MADE AVAILABLE

TO ALL STATE VEHICLES IN (l)NJUNCfiON WI1H

1HE ESTABLISHMENT OF A STATEWIDE MAINfENANCE

SYSTEM.

1HE FLEET MANAGER SHOULD ~UIRE 1HE USE OF 1HE STATE CREDIT CARD AND ELIMINATE ALL

CCMYIERCIAL CARllS. 1HE FLEET MANAGER SHOULD ISSUE 'mE CREDIT· CARD TO AGENCIES, ENFORCE REWLATIONS CONCERNING USE OF THE CARD, PROVIDE

INFORMATION REGARDING AN'f ASPECf OF THE STATE

CREDIT .CARD P.BOGRAM.

IN ORDER TO PROVIDE FOR MJRE EFFECfiVE

ACCDUNTING ~ CONTROL OF STATE GASOLINE,

OIL AND O'lHER APPROVED PUR.OiASES, EA.Oi

STATE VEHICLE SHaJLD BE ASSIOOID A STATE

GASOLINE CREDIT CARD rMBOSSED WI1H THE

LICENSE TAG N1J.1BER OF 1HAT VEHICLE. IN

ADDITION 1HE CARD SHOULD BEAR 1HE PRINI'ED STIPULATION 1HAT IT IS TO BE ACCEPI'ED FOR

USE ONLY FOR MAKING PURCliASFS FOR 1HE VEHICLE WHOSE TAG NUMBER IS PMBOSSED ON 1HE CARD.

THE FLEET MANAGER SHOULD ~UEST lliAT 1HE S. C. PEI'ROLEtM CDUNCIL WRITE A LEITER

-63- EXPLAINING THAT CC1\t4ERCIAL OIL CCMPANIES HAVE AGREED TO ACCEPT THE STATE CREDIT CARD. A COPY OF THIS LETTER SHOULD BE PLACED IN

EAQi STATE VEHICLE FOR USE SHOULD THE STATE

CREDIT CARD BE QUESTIONED BY A CCMvffiRCIAL

VENDOR.

CENTRAL STATE PURCHASING SHOULD SHORTEN THE TIME NEEDED TO OBTAIN A STATE CREDIT CARD

BY USING THE STATE'S e.mDSSING MAQUNE AT THE DEPARTMENT OF HIGHWAYS AND PUBLIC TRANSPORTATION.

-64- CHAPTER VI

VFHICLE LIABILITY INSURANCE

Introduction

Under the South Carolina Governmental Motor Vehicle Tort Claims Act (S. C. Code 15-77-210) the State and its political subdivisions may be sued by persons injured as a result of negligent operation of rotor vehicles (except school buses) . * The maximum amo1.mt that can be recovered 1.mder this Act is $15,000 per person for bodily injury or death (up to a total of $30 ,000) and $5,000 for property damage (15-30-5). The State is self insured in that it does not purchase insurance but pays claims made agairist itself with State f1.mds . Several methods are used to provide coverage for State employees. The Department of Highways and Public Transportation, which operates about half of the State's mtor vehicles, provides no additional coverage but suggests that employees purchase riders for their own insurance policies if necessary. Such riders are designed to pro- .teet drivers while they are operating motor vehicles other than their own personal car. Sixty-one agencies, operating all but 86 of the remaining vehicles, purchase liability coverage for their employees 1.mder the State fleet insurance policy administered by the Division of General Services. The last 86 vehicles are operated by eight agencies which purchase various types and levels of coverage at different premiums from connnercial insurance companies . School bus drivers may not be sued individually if a claim is made against the State (S. C. Code 59-6 7-760) .

· * School buses are treated differently than other rotor vehicles (seeS. C. Code 59-67-710).

-65- The Cotmcil examined the methods med for providing liability insurance for State employees and found that: (1) Purchasing liability insurance for State employees (the existing system for all agencies but the Department of

Highways and Public Transportation) is neither economical nor necessary; (2) Under the existing system, 43 agencies covered by the fleet policy cany unnecessarily high and expensive levels of coverage; and (3) Eight agencies which purchase insurance from COlmllercial companies are paying unnecessarily high premiums and are in violation of a Budget and Control Board requirement that such coverage be obtained under the fleet policy.

Liability Insurance for State Employees is Neither Economical Nor Necessary Sixty-one State agencies operating about 4,600 vehicles (excluding school bmes) insure their employees under the State fleet policy administered by the Division of General Services. This coverage is reinsured by the American Southern Insurance Company of Atlanta, Georgia which investigates accidents ming contract claims adjmters, settles claims and pays for any legal fees required in law suits against the companies . This reinsurance coverage cost the State about $367,000 in 1977. The estimated cost for 1978 is $483,000. In addition, eight agencies operating 86 motor vehicles

pay more than $21,000 in premiums to private insurance companies. The total cost was over $389,000 in 1977.

-66- In contrast, the Department of Highways and Public Transportation (DHPT) which operates 4,816 vehicles (excluding school buses) has been self insured since the 19 30 's. DHPT purchases no insurance for its employees. As an additional safeguard, IliPT employees are advised to buy a rider if necessary for their car insurance policies to protect themselves in case of judgments exceeding the limits set in the Motor

Vehicle Tort Claims Act. DHPT has paid claims from State ftmds at an average of $109,124 over the last six years. Estimated administrative costs, including the expenses incurred by the Attorney General's staff which provides legal assistance, have averaged about $80,000 per year. The total (about $190 ,000) is less than half what is currently paid by the other agencies to cover fewer motor vehicles. The General Services Division apparently chose to use a reinsurance system in 19 76 rather than self insurance because it was more expe­ ditious at the time and the Division did not have the persomel to administer a self insurance program. There was no infonnation as to what losses might be expected and what other costs might total.

Prior to 19 76 each agency purchased insurance on its own and no one in the State had ever been given the authority and responsibility for arranging the most economical insurance coverage for all State vehicles. In the last few years several states, national corporations and other governmental entities have fotmd a self insurance program to be more economical. Savings come in the area of administrative costs. The dollars spent on commercial insurance premiums are not just buying risk assumption. A significant portion goes toward the administrative overhead and profit of the commercial insurer. Also the comnercial insurer often contracts with a private firm to adjust claims and that firm also has administrative overhead and profit as do any attorneys used. In a self insurance program savings are gained in all of these

-67- areas. Overhead expenses and profit for cODJDercial .. insurers generally

run between 30% and 50% of the premiuns paid. American Southern raised the premiums on the fleet policy in 1978 with a provision for a

rebate if losses, attorney and adjuster expenses, and company expenses did not equal the premiums paid. Thirty percent (30%) of the premiuns were used for the company's "expenses" in addition to the adjusters and attorney fees. Included among these expenses is the company's profit. Nine states responding to LAC's survey are self insured (Arizona, California, Idaho, Illinois, Kentucky, Ohio, Oregon, Washington and

Wisconsin). A survey of states, cities, and regional and national corporations that have converted to self ·insurance indicates that savings would be in the range of 25% to 50% depending upon the

administrative setup. Ohio reported it saved over $1 million in its first year of using a self-insurance program. Wisconsin has reported that savings in the first year of its self insurance program were a minimum of 50% over purchased coverages. Washington started a self insurance program in October 1977 after a detailed study showed savings would be approximately $131,000 (21%) in its firs·t year. The experience of IHP1' and the other states mentioned above is that self insurance is mre economical than paying insurance pre­ miuns. The fleet insurance premium costs for 1978 on State-owned, county and city vehicles with the 15-30-5 coverage will be $1,228,582.

Based on the experience of IHPr and other states the Cetmcil estimates

a self insurance program with 15-30-5 coverage would save 20% to SO%

of the premiums currently being paid. A 20% savings would be $24S, 716.

If SO% were saved the amount would be $614,219.

-68- &encies Purchasing MJre Insurance Than Needed Sixty-one agencies owning 4,576 vehicles are covered mder the fleet policy. Forty-six of these agencies with 2,208 vehicles (24% of the State fleet) have been allowed to purchase additional insurance at $47 per vehicle to raise the liability coverage lf:mi.ts

~o $100,000 per person for personal injury or death (up to a total of $300,000) and $50,000 for property damage (100-300-50). A General Services Division official told the Comcil that the excess coverage was allowed because some agencies insisted on the additional coverage. It appears these agencies felt it was necessary to give additional ;Liability protection to their employees. This additional coverage is not necessary. The basic 15-30-5 coverage of the fleet policy is consistent with the limits allowed by the Govern­ mental MJtor Vehicle Tort Claims Act. Also, 15-30-5 is the minimum coverage requix-ed by statute for all South Carolina citizens with a vehicle registered in_ the State. Should catastrophic loss occur and a court award a sum exceeding the limits set by law, Amendment

No. 2 of the Reinsurance Agreement with American Southern provides for payments up to "$ 500 , 000 as the result of any one accident or occurrence."* Finally, as stated in the previous finding, this insurance coverage is not necessary in any case. The purchase of this higher coverage is not only urmecessary but it is expensive. In 1977, the cost to the State was $92,376 in excess premiums for insurance over the basic 15-30-5 coverage. This anDt.Dlt would be saved by eliminating this excess coverage. In the two years that the fleet policy has been in existence, none of the

* General Services Division and American Southern officials stated that this coverage was designed for use in case of accidents in other states but there is no such stipulation in the agreement.

-69- vehicles on which the additional coverage is carried have had acci­ dents resulting in claims over the basic 15-30-5 liability limits.

Unauthorized Purchase of Liability Insurance In its analysis of the State's insurance policies, the Council fOtmd eight agencies owning 86 vehicles that do not purchase their insurance through the current fleet policy~ These agencies are the Division of Economic Opportunity, Department of Juvenile Placement and Aftercare, Jolm De La Howe School, Patriots Point Development Authority, Ports Authority, Retirement Division, Secretazy of State, and the Tax COJIIID:i.ssion. They carry varying amounts of coverage including collision and comprehensive insurance. The total annual premiuns are $21,760.30. Insurance premiums for the same nl.llli:>er of vehicles under the fleet policy would be only $5,590. The reason mst often given by these agencies for not being under the fleet policy was "tradition." The insurance conpanies used were local ones. Agencies said they had been doirig business with these conpanies for several years and had a long-standing relationship with them. A couple of agencies seemed unaware of the fleet policy administered by General Services. When the Budget and Control Board established the fleet policy in January 1976, it required that if insurance was to be purchased by an agency it was to be through the fleet policy and the Division of

Genem.l .. Services. The Budget and Control Board also ruled that State vehicles could not have collision and comprehensive insurance coverage.

Vehicle insurance should be purchased at the best available rates. At the present tinE the fleet policy with :the 15-30-5 coverage is the most economical policy an agency can purchase.

-70- The additional cost of purchasing these various policies for 86 vehicles is $16,170 a year. The following is an analysis of each agency's insmance coverage and the additional cost to the State.

TABLE 4

AGENCIES WI1H INSURANCE ai'HER mAN 1HE FLEET POLICY

Cost of Fleet Policy with Basic 15 -30 -5 Excessive I# Vehicles Insurance Insurance Coverage· @ $65. · Cost to Ag¥f Owned Premium Cover5e per vehicle State Division of 1 $ 382.50 100-300-50 $ 65.00 $ 317.50 Economic Opportunity Juvenile 1 367.30 l.00-300-25 65.00 302.30 Placement & comprehensive Aftercare collision and coverage for CB radio

Jolm De La 14 1,940.00 liability 910.00 1,030.00 Howe School collision Patriots Point 1 206.00 100-300-50 65.00 141.00 Dev. Authority Ports 63 16,242.00 liability 4,095.00 12,147.00 Authority comprehensive collision

Retirement 1 347.00 liability 65.00 282.00 Division collision comprehensive

Secretaey of 1 514.00 liability 65.00 449.50 State collision comprehensive Tax 4 1, 761.00 100-300-50 260.00 1, 501.00 Conmission collision comprehensive

TOTAL 86 $21,760.30 $5,590.00 $16,170.30

-71- RECO~ATIONS

LEGISLATION SHOULD BE ENACTED TO ESTABLISH

A SELF INSURANCE PROGRAM FOR ALL STATE-OWNED

VHIICLES EXCEPT S

INCORPORATING 1liPT' S CURRENT PROGRAM, SHOULD

INCLUDE A SAFETY AND LOSS PREVENTION PROGRAM

AND AN EFFECI'IVE SUBROGATION PROCESS. LIA­

BILITY COVERAGE SHOULD BE IDENTICAL TO 1HAT

SPECIFIED IN 1HE SOOTH CAROLINA GOVERNMENTAL

MJTOR VHII CLE TORT CLAIMS ACI' OF 196 8 AS

AMENDED IN 1977.

IN ORDER FOR mE SELF INSURANCE PROGRAM TO BE

OPERATIVE A WAIVER OF LIABILITY FOR STATE

EMPLOYEES DRIVING A STATE VHIICLE ON OFFICIAL

BUSINESS SHOULD, BY ~BE INCLUDED IN 1HE

ESTABLISHMENT OF TIHS SELF INSURANCE PROGRAM.

SU

APPLYING TO S

59-67-760).

1HE STATE SHOULD RESERVE 1HE RIGIT TO TAKE ANY

NECESSARY DISCIPLINARY ACI'ION OR TO COLLECT

DAMAGES FROM AN EMPLOYEE WHO HAS CAUSED AN

ACCIDENT 1HROUGf HIS OR HER NEGLIGENCE.

THE FLEET MANAGER SHOULD INSTRUCT ALL STATE

EMPLOYEES DRIVING STATE-OWNED VEHICLES 1HAT 1HEY

ARE PERSONALLY LIABLE FOR ACCIDENTS OCCURRJJNG

WHEN DRIVING A STATE VHIICLE WI1HOUf PROPER

-72- AUIHORIZATION OR FOR A PURPOSE O'IHER 1HAN

OFFICIAL STATE BUSINESS.

In the event that the above recommendations are not implemented the following steps should be taken to make the State liability insurance program consistent and equitable.

1HE BUDGET AND CONTROL BOARD TiiROUGf 1HE

INSURANCE DEPARTMENT OF 1HE GENERAL SERVICES

DIVISION SHOULD REQUIRE AND ENFORCE THAT ALL

STATE AGENCIES WHIQf DESIRE TO CARRY VFRICLE

LIABILI'IY INSURANCE 00 SO ONLY 'IHROOGH 1HE

STATE LIABILITY FLEET POLICY. ONLY THE

BASIC COVERAGE LIMITS OF 15-30-5 SHOULD BE

CARRIED.

-73- APPENDIX I RESULTS OF TIIE LEGISLATIVE AUDIT COUNCIL'S SURVEY OF STATES' KrrOR VEHICLE PRACTICES

Thirty-one states responding. 1. Are agency heads furnished with a vehicle? RESPONSE # SfATES RESPONDING Yes 20 No 11 If yes, please list the type of vehicle furnished the agency head. RESPONSE Almost all of these are at least midsize vehicles. This vehicle has: RESPONSE # SfATES RESPONDING -No restrictions on its use 4 -Is Used only on official State business 16

2. If possible, please estimate the percentage or mix of your passenger-type vehicle fleet. -Full size (Chrysler Newport, Mercury Marquis, Buick) -Standard (Plymouth Fury, Impala, Ford LID, Ambassador) -Intermediate or midsize CLemans, Torino, Chevelle, or Matador) -Compact (Nova, Maverick, Hornet) -Subcompact (Vega, Pinto, Gremlin) RESPONSE Twenty-two of the states responded that over SO% of their fleets are intennediate size or smaller. Of these states, nine (9) indicated that over SO% of their fleets consist of compact and subcompact vehicles. Hawaii has SO% of its passenger-type vehicle fleet listed as subcompact while Colorado has 40% subcompacts. California, Colorado and Idaho show no full size or standard vehicles. On the other side of the spectrum, seven (7) states responded that over SO% of their fleets are standard and full size vehicles. The largest percentage of full size vehicles was 43% for Missouri.

3. Does your State operate a Central MJtor Pool? RESPONSE # SfATES RESPONDING Yes 2S No 6 If yes, what is the cost per mile for operating the motor pool vehicles? RESPONSE # SfATES RESPONDING 5-12¢ 10 12.01-14¢ 5 Over 14¢ 5 (Based on these 20 responses' the average -­ cost per mile was 12.6¢. If a range was given, the middle of the range was used.) No response 1 Less than 5¢ (operating costs only) 3 7¢/mile + $1.00/hour ($12.00 max.) 1

-71':;- APPENDIX I (CONTINUED)

4. Are vehicles permanently assigned to ~v:!-duals? RESPONSE # STATES RESPONDING Yes 22 ~ 5 Yes (With qualification that the assignment must be justified and authorized) 1 No (With qualification that such assigmnent might be justifiable) 3 5. What criteria is used for assignment of a vehicle to an individual? RESPONSE # STATES RESPONDING -Annual mileage 22 Range = 8,000 - 24,000 miles per year Mean = 14,000 miles per year MJde = 12, 000 miles per year (used by 9 states California uses 8, 000 miles per year in areas where no rotor pool is available but 12,000. in motor pool areas. -Position held by individual 9 -Work requirements 22 -Other 9 1) Special equipment in vehicle 2) Security 3) Justified in agency mission 4) Law enforcement 5) Minimum 4 days in the field 6) Ftmds available in agencies' budgets 6. Are individuals allowed to drive the vehicle fran home to work? RESPONSE # STATES RESPONDING Yes 9 ~ 9 Yes (With qualifications such as individual on call or having special permission) 10 No (With exceptions made in special cases) 3 7. Are individuals charged for the personal use of the State vehicle? RESPONSE # STATES RESPONDING Yes 3 No 24 Not applicable 4 J Of the three (3) affinnative responses, Michigan, charges for personal use exceeding 20 miles daily while Minnesota charges for milage from residence to work. Minnesota and Wisconsin use variable rates depending on the size of the vehicle.

-76- APPENDIX I (CONTINUED)

8. At what rate are employees reinbursed for mileage driven in their personal cars?

RESPONSE # SI'ATES RESPONDING 10¢/mile 2 12¢/mile 3 13¢/mile 3 14¢/mile 3 15¢/mile 3 15.5¢/mile 1 16¢/mi.le 3 Variable Rates Hawaii 18¢ per mile for the first 600 miles and 12¢ each additional mile Minnesota 11¢ per mile if a state vehicle is available and 16¢ per ~le if a state vehicle is. not available Nebraska 12¢ per mile if for the employee's convenience and 16¢ per mile if for the state's convenience North Carolina 11¢ per mile if fo:r the employee's convenience and 16¢ per mile if for the state's convenience Washington 11¢ per mile if state vehicle is · available and 13¢ per mile if state vehicle is not available .

9. Where is maintenance perfonned? RESPONSE /# SI'ATES RESPONDING (1) State-owned facilities 6 (2) Private garages on a State contract 0 (3) Private garages chosen by agency or individual drivers 2 (1) and (2) 5 (1) and (3) 12 All three 6 Ohio responded that their percentages were 60/42/8 while Tennessee broke dawn their maintenance to 50/10/40.

10. Has your State implemented any new policies in light of the recemt emphasis on energy conservation? RESPONSE II SI'ATES RESPONDING Yes 21 No 10 Eleven states said that the main thrust of their energy conservation policies for state-owned motor vehicles was the movement toward purchasing smaller vehicles with smaller engines. New Mexico states, ''The 55 mile per hour limit is fully enforced by State Police. If a driver is caught by the police, the car is im:potmded." Washington, in addition to purchasing smaller vehicles, has removed ccmmercial credit cards from trip dispatch vehicles tmless justified by route and destination of the trip. Creation of inter- and intra-departmental pools and equiping of more fleet vehicles with radial tires are part of the Michigan energy conservation program.

-77- APPFliDIX I (CONTINUED)

11. Does your State have a fleet insurance policy? RESPONSE I# STATES RESPONDING Yes 17 No· 4 Self-insured 8 No response 1 Premiums Range = $32.20 (Minnesota) - $250.00 (New Jersey) Average for liability = $ 83.67 Coverage: Liability 15 Liability &Fire 1 Full Coverage 2 No Response 1 .. ,. __ _ 12. Does your State use a ''tmiversal" credit card which is accepted by all or most oil companies? RESPONSE I# STATES RESPONDING Yes 20 No 11 Has it been widely accepted by conmercial stations in-state and out-of-state? RESPONSE # STATES RESPONDING Yes 20 No 0 The major problem with a "tmiversal" credit card seems to be acceptance of the card out-of-state.

-78- APPENDIX II ESTIMATED COST OF TRAVEL IN STATE VEHICLES FOR FY 76-77

The Energy Management Office reports that 21,924,346 gallons of gasoline were purchased in FY 76-77. The Audit Council estimates overall miles per gallon achieved in all State vehicles to be about 8 miles per gallon (iripg) ·,·.and operating costs· per mile to be · about 12 cents. per mile.

21,924,346 gallon$ x 8 mpg • 175,394,768 miles traveled in EY 76-77

175,394,768 x 12¢ per mile • $21,047,372 estimated cost of travel

MPG estimates are based on the following factors: (1) Department of Education estimates of 5.5 mpg for 6,000 schOOl buses:

(2) DHPT estimates of 60,000,000 miles using 7,046,2~4 gallons of gas (8. 5 mpg for 4,816 vehicles)

(3) Estimated 12-13 mpg for other vehicles based on analysis of fleet mix and Federal EPA data

-79- ··------1\J:'PI:NIII X Ill ANALYSIS OF SAVINGS IF FLEbT MIX IIAD BEEN OIANGED

PUR(]ii\SE PRICE SAVINGS OF NEI'l CARS IF 'Ilffi FLEET MIX WAS OiANGED

1977 Fleet ~lix (excluding law enforcement vehicles and station wagons)

_%_ Full-size 9Z 5.2 Stand;;.rd 732 41.3 Internediate 838 47.3 Co:npact 111 6.2 TOTAL 1, 773 100 ' .\ssume a constant fleet mLx and a constant number of cars for the model years 1975-1978 _\ssun~ all cars kept 4 years and driven 60,000 miles (15,000 miles annually) Tvt~l Cars in fleet • 1773 cars Re?lace % of fl~ct each year • 443 cars (444 cars 1 year out of the four) Chan&c the ~urrent fleet mix to SOt intermediate and SO\ compact cars.

PUR(]iASE rosT AT 1977 FLEET MIX

#Cars 1975 State Total 1976 State Total 1977 State Total 1978 State Total Si:e _%_ ~r year Contract Prices Cost Contract Prices Cost Contract Prices Cost Contract Prices I 00 Full-size 5.2 23 $4,594.70 $129,299.33 0 $105,678.10 $4,737.91 $108,971.93 $5,096.62 $117,222.26 $5,621.71 I Standard 41.3 183* 4,161.15 765,651.60 4,343.53 794,865.99 4,635.13 848,228.79 4,873.97 891,936.51 Intennediate 47 .:s. 210 3,843.06 807,042.60 3,809.70 800,037.00 4,564.80 958,608.00 4,298.68 902,722.80 Canpact 6.2 27 3,589.50 96,916.50 3,265.04 88,156.08 3,685.60 .• 99,511.20 4,169.99 112,589.73 - Taf.U. 443 -- TCml. CO....CT EAO! YEAR $1,775,288.80 $1,792,031.00 $2,023,570.25 $2,036,548.37 TOTAL COST 4 YEARS - $7,627,438.42 PURO!J\SB rosT IF FLEET MIX WAS rnt\NGBD TO SO% INI'ERMBDIATE AND SO% CG!PACT CARS

If Cars 1975 State Total 1976 State Total 1977 State Total 1978 State Total per vear Contract Prices ~ Contract Prices Cost Contract Prices Cost Contract Prices Cost Full-size 0 0 Standard 0 0 Intermediate 50 222 $3,343.06 $853,159.32 $3,809.70 $845,753.40 $4,564.80 $1,013,385.60 $4,298.68 $954,306.96 Cc:::pact 50 221* 3,589.50 796,869.00 3,265.04 721,573.84 3,685.60 814,517.60 4,169.99 921,567.79 ------TIJ!'.U. COST EAOI YEAR $1,650,028.32 $1,567,327.24 $1,827,903.20 $1,875,874.75 TOTAL COST 4 YEARS - $6,921,133.51 SAVI:\'GS EAOi YEAR IF FLEET ~fiX rnA.'«JED $125,260.48 $224·, 703.76 $195,667 .OS $160,673.62 TOTAL SAVINGS 4 YF.ARS - $706,304.91 • 184 and 222 vCJhiclcs were used in 1975 to make the total 444 for ono year. APPENDIX II I {OJNTINUEO)

GASOLINE CONSlNPTION ANO RELATED OOLLAR SAVINGS IF 1HE FLEET MIX WAS OIANGED

·.. GASOLINE USED AT 1977 FLEET ).IIX

1975 EPA II Miles 1976 EPA II Miles 1977 EPA II Miles 1978 EPA II !-Iiles II of Combined Driven II gallons Combined Driven II gallons Combined Driven I gallons Combined Driven II gallons Size Cars !\lPG 4 rears gas used MPG 3 rears gas used MPG 2 rears gas used. MPG 1 year gas used Full 23 12 60,000 115,000 12 45,000 86,250 13 30,000 53,077.1 16 15,000 21,562.5 Standard 183* 13 60,000 849,160 14 45,000 588,162 14 30,000 392,150.7 17 15,000 161,479.2 Intermediate 210 13 60,000 969,150 14 45,000 674,940 19 30.000 331.569.0 23 15,000 136,962.0 Compact 27 15 60,000 108,000 19 45,000 63,936 20 30,000 40,500.0 23 15,000 17,609.4 -- • -- .TOf..!\1. II GALLONS USED 2,041,310 1,413,288 817.296.8 337,613.10 TOTAL II Gt\LLONS USED ALL CARS- 4,609,507.9 TOTAL COST @ 50¢/GALLO~ $1,020,655.00 $706,644.00 $408,648.40 $168,806.55 I TOTAL COST 4 YEARS@ 50¢/GALLON- $2,304,753.95 ...... 00 I GASOLINE USED IF FLEET MIX 1'/AS OIANGED TO 50\ INI'EHOIATE AND 50\ a:NPACT CARS

1975 EPA II r·liles 1976 EPA II Miles 1977 EPA II Miles 1978 EPA II Miles II of Combined Driven It gallons Combined Driven II gallons Combined Driven I gallons Combined Driven I gallons Size Cars f. lPG 4 rears gas used MPG 3 rears _gas used MPG 2 years gas used f.lPG 1 year gas used Full 0 - 60,000 - - 45,000 Sta.Ildard 0 - 60,000 - - 45,000 Intermediate 222 13 60,000 1,024,530 14 45,000 713,508 19 30,000 350,515.8 23 15,000 144,788.4 Compact 221* 15 60,000 888,000 19 45,000 523,328 20 30,000 331,500.0 23 15,000 144,136.2 --- TOTAL I GALLONS USED 1,912,530 1,236,836 682,015.8 288,924.6 TOTAL II G.~l.O:-l'S USED ALL CARS - 4,120,306.4 TOT/J. COST @ 50¢/GALLON $956,265.00 $618,418.00 $341,007.90 $144,462.30 GALLONS SAVED EAOI YE.-\R 128,780 176,452 135,281 48,688.5 GAl.LONS SAVF.D IN 4 YEARS - 489,201. 5 OOLLAR SAVINGS IN 4 YEARS- $244,600.75 * 184 and 222 vehicles were used in 1975 to make the total 444 for one year. APPENDIX IV

ESTIMATED POV REIMBURSEMENTS FOR FY 76-77

Estimated POV Number of Miles Agency For FY 76-77 (1) Traveled @ 14¢/mile

Dept. of Social Services $1,:830, 325·~80 13,073,755 Dept. of Health &Envir. Con. 1,215,945.16 8,685,322 Clemson University(2) 718,336.06 5,130,971 Tax Commission 344,877.04 2,463,407 Vocational Rehabilitation 331,817.88 2,370,127 Department of Education 196,914.68 1,406,533 Forestry Commission 125,644.52 897,460 Labor Department 120,690.24 862,073 Department of Agriculture 120,156.00 858,257 Department of Corrections 118,422.64 845,876 Probation, Pardon, Parole Bd. 117,759.72 841,140 Dept. of Youth Services 115,523.12 825,165 General Services Division 109,174.10 779,815 Division of Admi~~tration 74,526.56 532,332 Winthrop Collegel2J 70,720.00 505,142 Blind Commission(2) 62,390.00 445,642 Bd. for Technical &Camp. Ed. 58,576.00 418,400 Land Resources Commission 58,534.64 418,104 Medical University 53,814.16 384,386 University of South Carolina 53,194.68 379,962 Judicial Department 52,241.20 373,151 Bd. of Financial Institution 50,003.68 357,169 Dept. of Mental Retardation 48,669.32 347,638 Dept. of Juv. Placement &After. 44,154.44 315,388 Dept. of Parks, Rec. & Tourism 44,134.52 315,246 Alcohol &Drug Abuse Cornm. 31,998.20 228,558 College of CharlestonC2) 25,377.36 181,266 Public Service Commission 23,685.36 169,181 Francis Marion College(2) 23,583.30 168,452 Dept of High. &Public Trans. 21,708.16 155,058 Development Board 21,561.40 154,010 Human Affairs CommissionC2) 21,212.72 151,519 Commission on Aging 20,734.76 148,105 Div. of Health &Social Dev. 19,767.04 141,193 Attorney General 19,753.36 141,095 S. C. State College(2) 18,894.60 134,961 Educational Television Network 16,886.88 120,620 Foster Care Review Bd.(2) 16,102.92 115,020 Personnel Division 15,733.88 112,384 Workmen's Compensation Fund 14,508.80 103,634 Children's Bureau 14,138.68 100,990 Lander College(2) 12,949.18 92,494 Cosmetic Art Examiners 12,586.52 89,903 Water Resources Commission 12,541.96 89,585 State Auditor 11,288.72 80,633 Disaster Preparedness Agency 10,086.96 72,049 Contractors Licensing Board 9,587.00 68,478 -82- APPENDIX IV (CONI'INUED)

Estimated POV Number of Miles Agency For FY 76-77(1) Traveled @ 14¢/mile Citadel $ 9, 261.32 66,152 School for the Deaf & Blind · 9,129.36 65,209 Residential Home Builders Com. 8,713.60 62,240 Barber Examiners Board(2) 8,502.00 60,728 Higher Education Commission 7,429.68 53,069 Industrial Commission 6,893.20 49,237 Housing Authority 6,333.68 45,240 Insurance Department 6,328.24 45,201 Retirement Division 6,193.72 44,240 Arts CammissionC2) 5,975.26 42,680 Funeral Services Board 5,931.56 42,368 Dairy Commission 5,805.84 41,470 Office of Economic Opportunity 4,765.76 34,041 Criminal Justice Academy 4,682.36 33,445 Amer. Bicentennial Commission 4,434.32 31,673 Real Estate Gommission 4,049.84 28,927 Patriots Point Dev. Authority 3,959.40 28,281 Ad.v. Council on Voc. &T~h. Ed. 3,421. 24 24,437 Board of Nursing 3,138.32 22,416 Dept. of Veterans Affairs 3,005.08 21,464 Second Injury Fund 2,933.08 20,950 Dept. of Consumer Affairs(2) 2,742.12 19,586 Election Commission 2,716.92 19,406 Clark Hill Authority 2,648.36 18,916 Dept. of Archives &History 2,222.04 15,871 Architectural Examiners Board 2,197.08 15,693 Aeronautics Commission 2,153.44 15,381 Research &Statistical Services 2,144.60 15,318 Wildlife &Marine Res. Dept. 1, 883.36 . 13,452 Musetmt Commission 1,837.56 13,125 Conun. on the Status of Women 1, 831.20 13,080 John De La Howe School 1,544.02 11,028 State Library 1,493.04 10,664 Accountancy Board 1,461.08 10,436 Opportunity School 1,459.80 10,427 Pharmaceutical Examiners 1,405.80 10,041 Nuclear Advisory Council 1,393.84 9,956 Ethics Commission 1,211.48 8,653 Higher Ed. Tuition Grants Cornm. 1,085.64 7,754 Environmental Sys terns 1, 021.52 7,296 Employment Security Commission 1,015.60 7,254 Engineering Examiners Board 890.96 6,364 Bd. of Exam. Nursing Home Admin. 538.68 3,847 Physical Therapist Examiners Bd. 457.52 3,268 Social Worker Registration(2) 437.92 3,128 Speech Pathology and Audiology 363.24 2,594 Cemetery Boardl2) 204.40 1,460 · Adjutant General 202.84 1,448 Confederate Relic Room 187.42 1,338 Treasurer's Office 174.90 1,249 Bd. of Registered Sanitarians 106.00 757 -83- APPENDIX IV (ffiNfiNUED)

Estimated POV Number of Miles Agency For FY 76-77(1) Traveled @ 14¢/mile

State Law Enforcement Div. $ 0 0 Alcohol Beverage Control Conm. 0 0 Dept. of Mental Health(3) 0 0 Div._ of r.btor Vehicle Mgmt. 0 0 TOTAL $6,691,153.16 47,793.907 miles

(1) Estimates based on agency reports submitted under the Fiscal Accountability Act for three quarters in FY 76-77. (2) Estimate based on agency reports submitted under the Fiscal Accountability Act for two quarters in FY 76-77.

(3) Mileage reimbursements were not given in the reports submitted under the Fiscal Accountability Act for FY 76-77.

-84- APPENDIX V

BREAKEVEN ANALYSIS TO DETER4INE niE NUMBER OF MILES mAT SHOULD BE DRIVEN BEFORE IT IS l\bRE ECONOO:CAL To oPERAtE AND MAINTAIN A StATE AUtOOBILE THAN PAY POV REIMBURSFMENI'

The following assl.lllptions and generalizations were made: 1. Gasoline Cost Per Gallon = $ .so Average Miles Per Gallon for Fleet = lS

. P Mil _ Cost Per Gallon = $ .SO • $ p Mil G = Co st 0 f Gas 0 1me er e - Average Miles Per Gallon 15 • 0333 er e 2. Based on the General Services Motor Pool Monthly Printout, total maintenance costs for FY 76-77 were $76,072.93 and 3,S53,477 miles were driven. The main­ tenance cost per mile was $.0214. Assume that this is an estimate of main­ tenance cost per mile for the rest of the fleet. M = Maintenance Cost Per Mile = $ .0214 Per Mile 3. Average Replacement Cost = $ 4,000 Average Resale Value = 800 Autanobile· is kept 4 years D = Annual Depreciation = ~acement Cost-Resal7 Value = $ 4,000-800 = ~ er of Years Maiilta.i.ned 4 Per Year

4. Annual Insurance Cost for 100/300/SO coverage tm.der the Current Fleet Policy = $112 I = Annual Insurance Cost = -$112 Per Year 5. Gasoline, maintenance, depreciation and insurance are the basic costs to operate and maintain a State automobile.

6. 0 = Overhead Cost per mile - estimated to be $.02 per mile. If X = the number of miles driven· in one year and R = the reimbursement rate per mile for POV (currently $.14 per mile), the following formula may be used to calculate the breakeven point:

.Annual Cost of State Care = Payment of POV Reimbursement OX + GX + MlC + D + I = RX 'Mlere X = number of miles to be traveled in one year D = Depreciation costs for one year I = Insurance costs for one year G = Gasoline costs per mile

-85- M = Maintenance costs per mile 0 = Overhead cost per mile R = Reimbursement per mile for POV

OX + GX + MX + D + I = RX $.02X·+ $.0333X + $.0214X + $800 + $112 = $.14X X = 13,966 miles Using the infonnation above, the Council estimates that an automobile must be driven a minimum of 14,000 miles before it is more economical to operate· and maintain a State car than pay POV reinbursement. If a driver travels less than this, it is cheaper to pay POV re:inbursement than assign him a State automobile.

-86- APPENDIX VI STATE AGENCY GASOLINE CONSUMPTION FOR FY 76-77 (GALLONS)

Fiscal Year 1976-1977 (Gallons) Aeronautics Commission 20,586 Agriculture Department 45,355 Archives and History Department 8,849 Auditor 2,033 Commission for the Blind 9,117 The Citadel 26,510 Clemson University 498,167 College of Charleston 23,281 Comptroller General 2,818 Corrections Department 363,017 Criminal Justice Academy 19,712 Dairy Commission 1,363 School for the Deaf and Blind 49,059 Development Board 16,492 Disaster Preparedness 3,130 Department of Education 10,356,791 E'IV 56,368 Election Commission 1,010 Employment Security Commission 14,712 Engineering Examining Board 1,042 Forestry Commission 255,593 Francis Marion College 21,003 Division of General Services 336,666 Department of Health &Environmental Control 142,609 Commission on Higher Education 1,884 Highway Department 7,046,294 Human Affairs Commission 2,782 Industrial Commission 6,341 John De La Howe Commission 9,630 Juvenile Placement and Aftercare 1,950 Labor Department 1,052 Lander College .11,150 SLED 384,977 State Library 4,221 State Board of Medical Examiners 272 Medical University of South Carolina 50,711 Mental Health Department 190,494 Mental Retardation Department 181,556 Opporttmi ty School 5,507 PRT 133,602 Patriots Point Development Authority 456 State Personnel Division 2,977 Ports Authority 136,005

-87- APPENDIX VI (CONI'INUED)

Fiscal Year 1976-1977 (Gallons) Research and Statistical Services Division 917 Residential Home Builders Commission 1,438 S. C. Retirement System 1,084 Second Injury Ftmd 1,073 Secretary of State 1,681 Department of Social Services 29,902 S. C. State College 34,186 Tax CoDJDission 4,233 Technical &Comprehensive Education Board 178,627 Treasurer's Office 1,749 University of South Carolina* 145,227 Vocational Rehabilitation 116,351 Water Resources Commission 1,962 Wildlife and Marine Resources 845,333 Winthrop College 23,855 Workmen's Compensation Fund 1,754 Department of Youth Services 87,830 TOTAL 21,924,346

* Includes the regional campuses.

-88- APPENDIX VII

LEGISLATIVE AUDIT COUNCIL" SURVEY OF AGENCY M)10R VEHICLE PRACTICES

1. Does your agency own or lease any motor vehicles other than those assigned from the General Services Mbtor Pool? Yes No If no, go to Question 14. 2. List all vehicles owned by your agency as of March 31, 1977. Please list each vehicle separately and give the information required about each vehicle. Do not include General Services MOtor Pool Vehicles. Class (Full-sized, To Whom standard, interrnedi- Perm. Tag Is Title Where Is Serial No. Year Make/MOdel ate, compact) Tag # (Yes/No) Assigned Title Kept Luxury I terns Authorized Is Person # Miles or Special Mileage to drive Considered Between Agency Accessories, ie I 00 Mileage Driven between home to be "on call" home and or State Cruise Control, \.0 I Assignment Driven FY 76-77 and work (Yes/No) work Decals Tape Player, Serial No. (Name and Title) FY 75-76 To Date (Yes/No) See Note (One Way) (Yes/No) 2-Way Radio, etc.

Note: For this question "on call" includes those persons who can be contacted for official duty at any time. It includes people who are readily accessible by telephone, pocket pager, or other paging and ansering service devices. This does not include personnel who are only accessible by a two-way radio. 3. (a) List all the vehicles leased by your agency as of March 31, 1977. Please list each vehicle separately and give the infonnation requested about each vehicle. Do not include Ceneral Services Motor Pool Vehicles.

Class (full-sized, To Whom standard, intermedi­ Perm. Tag Is Title Where Is Serial No. Year Make/Model ate, compact) Tag # (Yes/No) Assigned Title Kept Luxury I terns Authorized Is Person # Miles or Special Mileage to drive Considered Between Agency Accessories, ie Mileage Driven between home to be "on call" home and or State Cruise Control, Assignment Driven FY 76-77 and work (Yes/No) work Decals Tape Player, Serial No. (Name and Title) FY 75-76 To Date (Yes/No) See Note (One Way) (Yes/No) 2-Way Radio, etc. APPENDIX VII ((X)NTINUED)

Note: For this question "on call" includes those persons who can be contacted for official duty at any time. It includes people who are readily accessible by telephone, pocket pager, or other paging and answering services devices. This does not include personnel who are only accessible by a two-way radio.

3. (b) If you are leasing vehicles, complete the following: Lessor #of Vehicles Leased Amount of Lease Type of Lease 3. (c) Who selected the lessor and the type of lease used? (1) Your agency (2) Division of Mbtor Vehicles Management (3) General Services (4) Other (specify) 3. (d) If your agency chose the lease, what criteria was used in its selection? 4. (a) List the vehicles disposed of by your agency during FY 76-77. Please list each vehicle separately and give the information requested about each vehicle. I \.0 0 I Method of Class (full sized, Disposal .Amount Obtained standard, intermediate, Total Mileage (auction, trade­ in Disposal Date of Serial No. Year Make/Mbdel _co_mp...._a_c_t"""')------on Vehicle in, etc.) of Vehicle Disposal 4. (b) Do you plan to dispose of any additional vehicles before June 30, 1977. Yes No If yes, please list. 4. (c) What criteria is used to determine disposal of a vehicle? 4. (d) Are vehicles reconditioned before disposal? Yes No Explain. - 5. Do you plan to purchase or receive any additional vehicles before June 30, 1977? Yes No If Yes, please list. Class (full sized, Special Accessories standard, intermed. Estimated Vendor (ie Cruise Control, Make/Mbdel compact) Cost (If known) Tape Player, etc.) APPENDIX VII (CONTINUED)

6. Where is your agency fleet serviced and repaired (excluding gasoline purchases)? Please list each place separately. Actual Place of Service Expenditures Estimated Expenditures Name & Address FY 75-76 FY 76-77 To Date 7. Does your agency have a preventive maintenance program? Yes No If yes, please describe how the program operates. 8. Is a maintenance log maintained on each vehicle? Yes No

9. Is a mileage log maintained on each vehicle? Yes_ No 10. Does your agency have any gasoline credit cards? Yes No If yes, please complete the following: S. C. Credit Card or Assigmnent I c.o Company Account Number (Name & Title) ...... I 11. Please describe any procedures or controls your agency has over the use of credit cards other than those issued by the Divison of ~~tor Vehicle Management.

12. (a) Does your agency arrange insurance for its vehicles? Yes No

(b) If no, who does arrange the insurance for the vehicles? (c) If Yes, complete the following:

Insurance Company Annual Premium TYpe of Coverage 12. (d) What criteria is used in the selection of the type of coverage and insurance company used? 13. Have any employees of your agency been involved in an accident with a State vehicle during FY 75-76 and FY 76-77. Yes No If yes, complete the toflowing: Vehicle Personal #Days Total Total Employee Date of (Year, Make, Injury Missed Damage to Insurance (Name & Title) Accident Model) (Yes/No) From Work Vehicle Recovered APPENDIX VII (CONTINUED)

14. Does your agency have any General Services MOtor Pool Vehicles permanently assigned? Yes No If yes, complete the following: Class (full-sized, To Whom standard, intennedi- Penn. Tag Is Title Where Is Serial No. Year Make/Model ate ~ompact) Tag II (Yes/No) Assigned Title Ke:Qt Luxury Items Authorized Is Person II Miles or Special Mileage to drive Considered Between Agency Accessories, ie Mileage Driven between home to be "on call" home and or State Cruise Control, Assignment Driven FY 76-77 and work (Yes/No) work Decals Tape Player, Serial No. (Name and Title) FY 75-76 To Date (Yes/No) See Note (One Way) (Yes/No) 2-Way Radio, etc. Note: For this question "on call" includes those persons who can be contacted for official duty at any time. It includes people who are readily accessible by telephone, pocket pager, or other paging and answering service devices. This does not include personnel who are only accessible by a two-way radio.

15. Other than permanently assigned vehicles, does your agency use the General Services Mbtor Pool? Yes No If yes, approximately how many times a month does your agency use the motor pool? ------I 1.0 N 16. Other than permanently assigned vehicles, has your agency had any problems in obtaining a motor pool vehicle? I Yes No Explain. 17. What changes could be made in the General Services Mbtor Pool to better meet the needs of your agency? 18. Do you feel that state operated motor vehicles are misused? Yes ___ No___ Explain. 19. In answering this questionnaire, has your response included any boards, commissions, or advisory commissions? Yes No If yes, list. 20. Agency comments. Include any additional comments or explanations to any of the above questions. Also include any comments you have concerning the management and use of State vehicles.

I certify that the above information is true and accurate to the best of my knowledge.

Signed: Agency n1rector ANNafATED BIBLIOGRAPHY

National Publications American Automobile Association. Your Driving Costs - 1977 Edition. Falls Church, Virginia, 1977. An annual pUblication showing how to compute operating costs for passenger cars and gas savings tips as taken from data compiled by Rmzheimer and Company. Hertz. Hertz News. New York City, New York: Hertz Rent A Car, 1977. A monograph outlining factors which enter into calculating auto operating costs for 1977 models including analysis.

Motor Vehicle Manufacturers Association. Automobile Fuel Econ~. Detroit, Michigan: 1973. A detailed look at fuel economy ~ose variables which affect it including bibliography and references. Ruegg, Rosalie T. "Life-Cycle Cost Evaluation of the Personal Patrol Car Program" Jotn"'lal of Police Science and Administration, 1977. An indepth cost comparison of the use of personal patrol cars versus multi-shift pool cars.

Rmzhe:imer and Company, Inc. Anal~is of Business Car Policies and Costs. Rochester, Wisconsin: Rt.nl eimer, 1975. Ali indepth analysis of all factors involved in purchasing and regulation of vehicle fleets.

Information From Other States Arizona. Interagency Motor Pool Regulations. Department of Admin­ istration. This dOCUment lists all cOdified regulations regarding State vehicles including standards of use, fiscal requirements, vehicle abuse, driver responsibility, parking and vehicle identifica­ tion. California. State Administrative Manual: Transportation Services. A summary of State regulations for vehicle use inclUding utilization, autanobile usage reports, home storage, maintenance, credit card charges, long-term usage and travel logs. California, Los Angeles Comty. Vehicle Testin and Evaluation Pro Sheriff's Department, 1977. This st 1s e result o tests con ucted on 1977 policy equipped vehicles in the areas of performance, ergonomics, operating and maintenance costs, and fuel consunption. Colorado. A Statewide Survey of Administrative Passenger Vehicles ..• Their Use, Cost and Control. Department of Adlriiriistration, 1973. A report concerning the use, cost and control of State vehicles including supporting tables and reconmendations. Colorado. Central Services Motor Pool Policies. Department of Admin­ istration, 1974. A detailed listing of policies and procedures including supplements and fiscal rules. Georgia. Motor Vehicle Management Manual. Department of Administrative Services. An indepth dOcument which describes official policy regarding vehicle acquisition, operation, and maintenance including fiscal systems.

-93- Georgia, City of Savannah. Central Garage Study. Management Services Bureau, 1975. An analysis of vehicle repairs and related contracts, fuel dispensing and shop performance. Illinois. erator's Instructions. Department of General Services, 1 3. A oo w 1c lists general policy in usage of State vehicles with emphasis on credit card procedures. Kentucky. Policies and Procedures Governing the Use of State Vehicles. Department of Transportation, 1977. A brief booklet describing general rules regarding vehicle usage including a supplemental treatment of credit card purchases and vehicle mileage reporting. Massachusetts. Re ations Governin the Purchase of Automobiles/ Station Wagons. ExecutJ.ve 0 1ce or A nistration an Finance, 1976. A listing of revised classifieations of vehicles used to determine the model size for which an agency is eligible. Minnesota. Trans rtation Division: Rules and Re ations. Depart­ ment of Administrat1on, 1 . A conc1se manual i outl1nes general rules regarding State vehicle use including sample transportation division fonns. erations: Executive SUIIIIla

New Mexico. State Trans~rtation Pool Rules and Regulations. Depart­ ment of Finance and Adiiiiillstration, 1975. This directive, which includes a definition of tenns, explains all State vehicle related regulations.

New York. A Proposal for S~le Agen~ Ownershi~ of the State Passenger Automobile Fleet. Office o eneral ervices, 1 75. This dOetnnent reviews the proposal and objectives of single agency ownership, dis­ cusses implementation of the single agency proposal and includes cost analysis of current fleet management practices.

North Carol~. State-Owned Fuel Dispensin' Facilities for Motor Pool Vehicles. Department of Adiliinistration, 19 6. This booklet gives a geographic listing of State-owned fuel dispensing facilities, their location and the type of gasoline pumped at each location. North Carolina. North Carolina Central Motor Pool Rules and Re ations. Department of .Admimstrat1on, 1 . A an oo on t e rules, regulat1ons and procedures for using the central motor pool and for getting a vehicle for official State business. Pennsylvania. Executive Order: Motor Vehicle Management. Governor's Office, 1973-1977. This paCkage includes rules governing the Pennsylvania Automotive Fleet plus subsequent revisions, rates and billing procedures and an inventory of State credit cards.

-94- Termessee. Policy Statement and Procedures. Motor Vehicle M'anagement Division, 1975. A collection of d0Ctm1ents covering such subjects as temporary assignment of vehlicles, motor vehicle purchases, standards for replacement of vehicles and credit card assignment including sample fonns. Termessee. Audit R;r;rt: M:>tor Vehicle M'anagement Division. Comptroller of the Treasury, 19 6. A COiDbined operational, management, financial and canpliance audit of the Motor Vehicle Management Division with recomnenda tions.

Washington. Passen~er M:>tor Vehicles Used in Conducting State Business. Legislative BUdgetommittee, 1974. A performance aUdit accessing the management functions of pla:rm.ing, executing and reviewing as they pertain to the use of motor vehicles including reconmend.ations to improve the overall use of motor vehicles.

Washington. Automobile Policies. 1975. A listing of State rules and regulations governing the acquisition, management, operation, maintenance repair and disposal of all State-owned or operated passenger motor vehicles. West Virginia. Motor Vehicle Rules and Regulations. Department of Finance and Adminlstration, 1974. A short manual covering general rules and operation procedures in using State-owned vehicles. Wisconsin. Infonnational Bulletins. Department of Administration, 1977. This collection addresses the sUbjects of uniform mileage charges, mileage reimbursement, auto lease rates, purchasing requirements and general usage policies.

Wyoming. Motor Vehicle Management System's Policies and Procedures. Department of Admiriistration~ Fiscal Control, 1976. A detailed expla­ nation of policy and procedures regarding motor vehicle usage and rate determination for vehicles. Washington, D. C. Use of Government-Owned Motor Vehicles. Department of General Administration, 1967-1977. This package inclUdes regulations regarding use of motor vehicles, motor vehicle safety program require­ ments, and an ~th handbook on motor vehicle management. South Carolina Publications

S. C. Governor's Office. Survey ~art and Reconmendations. Governor's Management Review Conmission; Col ia, South Carolina; 1972. An exami­ nation of the administration of services in South Carolina and accom­ panying reconnnendations. S. C. State Budget and Control Board. M:>tor Vehicle Management Manual. Columbia, South carolina; 1975. This manual specifies current State Government policy regarding State-owned motor vehicles including pro­ cedures and instructions.

S. C. State Budget and Control Board. Annual R~rt to the General Assembly. Columbia, South Carolina; 1976. Incred in this briefing is a history of the Division of Motor Vehicle Management, organizational chart and listing of recent accomplishments. -95- S. C. State Budget and Control Board. Report of Special Panel on State of South Carolina Motor Vehicle Management Problem Areas. Coltmibia, South Carolina; 197 5. The report of a special panel assembled by the Cmmcil of State Governments which reviews and makes recorronendations on problem areas relevant to management of State-owned and operated passenger vehicles.

-96- STATE OF SOUTH CAROUNA BUDGET AND CONTROL BOARD DIVISION OF MOTOR VEHICL.E MANAGEMENT P.O. BOX 133 COLUMBIA, S.C:. z•zoz

ALLAH J. SPENCE DIAICTOit March 24, 1978 _., IIOJI 7,.7811

The Director, Division of Mltor Vehicle. Management (IMVM) con­ siders this Audit Report essentially an accurate and objective evaluation of the vehicle management program for the State of South Carolina. I am pleased by the thorough and professional approach utilized

by the auditors of record and the Audit Council in general. Several differences of opinian were discussed at the exit conference but no

major problems existed. The knowledge and perception demnstrated by the Council was exceptional which, in itself, lends creditability to the overall audit program.

As indicated in the Audit Report, the IMVM was created by the State Budget and Control Board (SB&CB) an May 27, 1975. The Director of this Division reports directly to the SB&CB by means of reports and appearances. With the assistance of the SB&CB, there has been substantial pro­ gress towards a cost-effective vehicle management program. The one apparent shortcoming is the absence o; legislative authority to fully carry out the programs approved by the SB&CB. This is further compli­ cated by the present decentralization of management controls which implies agency ownership of assigned vehicles.

-97- There is an unquestionable need for the establishment of a centralized, interagency multiple user Central Transportation Center (CTC), with maintenance facilities, in the capital complex area. Similar centers should be established in the lower and upper parts of the State. These centers, if managed properly, would in no way hamper an agency in the perfonnance of their assigned mission. On the contrary, it is felt that the agency would benefit from uninter­ rupted use of a vehicle without the usual problems encountered in the management of a vehicle fleet. It should be noted that establishment of such centers would entail considerable start up costs primarily in site acquisition and buildings. However, sufficient personnel and equipment are presently available in the agency pools to staff and equip the CTC' s. It is estimated that savings to the State would more than pay for the capital investments for facilities within a four (4) year period. Presently, the State now has an accurate inventory of all licensed motor vehicles. In past years, only automobiles were in the central inventory. Our State now has a M::ltor Vehicle Management Manual. With improvement and proper authority, this management manual can be used to accomplish our stated goal of providing adequate and safe trans­ portation for employees to perform Official State Business at the most economical cost to the tax payers of our State. We now have a vehicle inspection program wherein all motor vehicles are thoroughly inspected prior to acceptance by the State. This program ensures that our State gets what we have purchased and that it is in good working order. I feel that much progress has been made in the general area of vehicle identification. Many of our vehicles now display a seal and -98- identification strip. DMVM has written and is sponsoring legislation to require permanent license tags on vehicles rather than annual tags .

This will be mre economical and iq>rove identification acctn"acy because a complete re-registration will occur. It is anticipated that these new permanent tags will be distinctive and easy to identify. OOM has also requested a change in the Appropriation Act that will require all mtor vehicles to be approved by the SB&CB prior to purchase. Previously, only autombiles received this

close attention and the more expensive trucks and special uni. ts went urmoticed. There are several other accomplishments and savings that can be credited to the management effort of the IMVM. However, these items shall be reported to the Governor and General Assemly in the

IMVM annual report and will not be discussed at this time. The discrepancies noted by the Audit Council are acknowledged and every effort shall be initiated to correct these errors. I accept the findings and recODJDendations in good faith and shall go about correcting them in the same manner. As indicated above, I concur with the findings and recotmnenda­

tions of the Council and wholeheartedly en~urage acceptance and approval by the General Assemly.

-99-