Auditor: DMV failed to collect $22M
April 24, 2013
The California Department of Motor Vehicles has left about $22 million on the table as the state agency neglected to collect money due to it over a three-year period, according to a report by the state auditor.
The DMV routinely issues special license plates that feature pictures or unique design elements and charges participants extra fees for those, which are then directed to various programs, including protection of whales, agricultural training, funding environmental nonprofits at Lake Tahoe and anti-terrorism initiatives.
While the DMV collects fees when users elect to purchase a license plate, it failed to collect annual retention fees, meaning about $12 million in revenues went uncollected, said state auditor Elaine Howle.
Further errors in how specialty plate owners were charged resulted an additional $10 million being lost, starting in 2010, Howle's report states.
“Unfortunately, our suspicions were correct, and the egregious misuse of these funds is absolutely unacceptable.”
— Sen. Ted Gaines,
"I am extremely disappointed in the results of the audit report released today on California's specialized license plate program," said state Senator Ted Gaines, R-Roseville. "Last year, Senator (Mark) DeSaulnier, D-Concord, chair of the Senate Transportation and Housing Committee, and I called for this investigation out of suspicion that the program was not being implemented appropriately. Unfortunately, our suspicions were correct, and the egregious misuse of these funds is absolutely unacceptable."
The DMV released a statement saying the department does not typically collect fees from people who kept a personalized plate after they no longer have it on a car.
"DMV will do an analysis to determine whether it makes financial sense to change this practice," said Armando Botello from the DMV Office of Public Affairs in a prepared statement.
Gaines expressed outrage over another aspect of the report that demonstrated the California Department of Food and Agriculture could not provide adequate documentation for nearly $900,000 in expenses charged to special plate funds, according to the report.
The California Emergency Management Agency used 10 percent of its fund expenditures for unrelated items, when it was required to limit administrative costs to 5 percent, the auditor said.
Furthermore, the California Natural Resources Agency neglected to submit required annual reports about the performance of programs that were funded by specialty license plate programs.
"When Californians spend their hard-earned dollars to provide funding for special causes like anti-terrorism efforts and keeping Lake Tahoe blue, they fully expect the responsible state agencies will act in good faith, follow the law and use the millions of dollars collected for their designated purpose — not for unrelated office supplies and travel expenses," Gaines said.
Patrick Wright, executive director of the California Tahoe Conservancy, which receives about $1.2 million annually from the specialty license plate program for various environment protection projects, said the report from the state auditor was cause for concern.
"I'm more concerned about public perception," he said. "If the public believes the program is not effectively administered, we could see plate sales reduced."
The decrease in sales would obviously dent the amount of revenue to the many programs that receive funding, Wright said.
"We have to get our collective act together," he said.
To contact Staff Writer Matthew Renda, email firstname.lastname@example.org or 530-477-4239.
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