Raleigh, N.C. — Gov. Beverly Perdue said Tuesday that rules governing how state agencies lease vehicles need to be reworked to avoid wasteful spending.
The call for an overhaul follows a WRAL News investigation that found some agencies paid millions for miles they did not drive and others had questionable record-keeping practices.
"We need every dollar we can find, and if you're paying for cars to sit in a lot, the whole system needs to be revamped," Perdue said.
Agencies lease vehicles from the state Motor Fleet Management Division, which is funded solely by fees collected on the vehicles and doesn't get any money from the state budget. By law, the division charges for a monthly minimum of 1,050 miles on each vehicle to cover maintenance, insurance and gas for more than 8,500 state-owned vehicles.
If vehicles are driven more than 1,050 miles in a month, the agency must pay extra. If cars travel less than 1,050 miles, agencies must still pay the minimum rate.
The unused miles added up in the past year, when Perdue and former Gov. Mike Easley ordered agencies to cut travel spending because of a record budget shortfall.
"We did all the right things, but we didn't know we were getting charged while the cars sat on the lot unused," Perdue said.
From July 2008 to last June, records show the state Department of Correction spent $1.7 million on parked cars. More than half of the state Department of Health and Human Services vehicles drove under the minimum mileage, costing the agency more than $1 million, records show.
The University of North Carolina-Chapel Hill spent $600,000 on unused mileage the fiscal year that ended in June, while North Carolina State University spent $293,000, according to state records.
The expense for the unused cars came as agencies cut programs and state workers took a pay cut last spring to balance the budget.
"It's foolish, (and it) ought to be fixed," said Norris Tolson, co-chairman of Perdue's Budget Reform and Accountability Commission , which is searching for ways to save money in state government.
"It's one of those things that's been sitting on the books for a long time," Tolson said. "As (state agencies) change, nobody has really looked at it and said, 'Am I really doing this as good as I could be?' And the answer is probably no."
The budget reform panel already targeted fuel efficiency in the fleet, and Tolson said mileage charges will now be scrutinized as well.
Perdue said agencies could end up returning several vehicles to Motor Fleet Management and having their employees sharing vehicles. She also said the law regarding usage of state-owned vehicles might need to be updated.
The motor fleet statute that covers mileage was adopted in 1981 and has never been changed. By law, Motor Fleet Management is limited in its oversight. Once an agency rents a vehicle, the division can't take it away as long as the bills are being paid.
"If the judgment call is we can't afford to keep all these cars, we've got to find another way to do it," Tolson said.