State Auditor's Report Shows Several Deficiencies in the NDOT

A Nebraska State Auditor's Report shows several issues with the department in 2023. Here's a summary of the issues.

NEBRASKA DEPARTMENT OF TRANSPORTATION
SUMMARY OF COMMENTS
During our examination of the Nebraska Department of Transportation, we noted certain deficiencies and other operational matters that are presented here. The following comments are required to be reported in accordance with Government Auditing Standards: Comments #4 (“Payroll Issues”) and #5 (“Contract and Goods Purchased Issues”), which are considered to be significant deficiencies, and Comments #1 (“Travel Usage Monitoring”), #2 (“Voyager Card Issues and Monitoring”), and #3 (“Excessive Overtime”), which are considered to be material weaknesses. These comments and recommendations are intended to improve the internal control over financial reporting or result in operational efficiencies in the following areas:

1. Travel Usage Monitoring: There was a lack of procedures for ensuring that the thousands of vehicles maintained by the Department were used for appropriate purposes. We noted the following: (1) destinations and purpose of travel were not reported; (2) mileage reported could be modified without review or documentation; and (3) mileage reported was not reviewed to ensure that employees were correctly reporting mileage when driving the Department’s vehicles.

2. Voyager Card Issues and Monitoring: The Department lacked procedures for ensuring that fuel purchases were appropriate and reported accurately during the calendar year. We noted the following: (1) supporting documentation was not on file to support purchases and ensure the purchases correspond with reported travel; (2) purchases were made in excess of the vehicle’s fuel capacity; (3) purchases were made for multiple fuel types for the same vehicle; (4) purchases were made at commercial sites instead of Stateowned facilities in compliance with Department policy; (5) inaccurate odometer readings were entered when purchasing fuel; (6) fuel purchases on shop cards were not supported; (7) no policy regarding car washes was noted and, therefore, excessive car washes were noted; and (8) transactions were miscoded in the Voyager system.

3. Excessive Overtime: The Department did not review overtime paid to its employees to ensure it was reasonable and necessary. We noted (1) 20 employees tested were paid a minimum of 203% more than comparable employees with the same job title; and (2) 37 employees were paid an amount equal to 40% or
more of their base salary in overtime wages.

4. Payroll Issues: The Department lacked an adequate segregation of duties over the payroll process. Further, we noted the Department allowed employees to use leave to accumulate more than 40 hours during a work week, and those hours were paid at the standard rate. Due to this, the Department potentially overpaid its employees for 9,850 weeks, totaling over $750,000 during the examination period.

5. Contract and Goods Purchased Issues: The Department lacked procedures for monitoring contracts to ensure purchases were appropriate or contract items were purchased. Further, the Department did not have procedures to verify goods were received prior to payment, nor was a system of inventory for products at District locations in place.

The complete report is attached.