The Iowa State Auditor’s office has released a report on its review of operations of the Motor Vehicle Department of the Cerro Gordo County Treasurer’s Office in Mason City.
State Auditor Mary Mosiman says County Treasurer Patricia Wright requested the audit after concerns were raised about vehicle registration and title transactions not being properly processed between January of 2013 and June of last year. She says they determined the treasurer’s office did not follow DOT policies and procedures consistently and that they need to strengthen the internal controls and overall operations in the office going forward.
Mosiman says the Iowa Department of Transportation’s investigation into the county auditor’s office showed that certain fees were not being collected and forwarded to the state. She says vehicle registration and title transaction fees selected for testing were deposited into the county’s bank account and properly recorded into the DOT system, but based on the investigation performed by DOT officials, certain required fees were not collected by the county and the state’s share of the fees were not remitted to the Iowa Departments of Revenue and Transportation.
The DOT investigation showed a dealership sold vehicles to two subsidiaries of the dealership which would up-fit vehicles, with the subsidiaries trading the vehicle back to the dealership and using the trade-in value to purchase another vehicle to up-fit. When the vehicle was originally sold by the dealer to the subsidiary, the subsidiary was required to pay tax, title and registration fees on the vehicle. Mosiman says use tax and first-time registration fees were not paid by the dealership on 152 of 157 vehicles that were up-fitted.
“A dealership and a company that performs up-fitting avoided paying approximately $283,868 in first-time registration fees and use tax. And according to DOT staff, the county should have identified a concern with the number of vehicles being transferred and notified the DOT at that time,” Mosiman says. She says once the current treasurer realized the situation, the processes were changed and things should be correct going forward.
Mosiman says the county treasurer’s office was also told not to use the same set of passwords for county accounting systems and the DOT’s motor vehicle transaction program. “That is one of those critical internal controls they recommend to all government agencies –is that passwords be unique, that they be changed periodically, and certainly not shared,” according to Mosiman. Mosiman says she was glad to see the county treasurer alert her office once an issue was discovered.
The report states Motor Vehicle Deputy Treasurer Natasha Lewerke who supervised five office staff and processed motor vehicle transactions, was placed on paid administrative leave by the county on July 22nd of last year, and Lewerke was fired on January 4th of this year after an internal investigation.
(By Bob Fisher, KRIB, Mason City)