Auditors: MVD lack of oversight may put Arizonans in danger
Photo via Arizona Department of Transportation/Motor Vehicle Division
The Arizona Department of Transportation’s Motor Vehicle Division is potentially putting the public — including school children — at risk by not providing the proper oversight to contractors that have issued licenses to people who were not qualified.
Following two audits by the Arizona Auditor General, one looking at ADOT’s oversight of third-party companies that issue driver’s licenses and titles, and another digging into its oversight of providers and examiners for commercial driver’s licenses, the MVD has a lot of work to do to get things back on track.
Republican state Rep. David Cook, chairman of the Arizona House of Representatives Transportation and Infrastructure Committee, expressed alarm at the findings of one of the audits in an Aug. 25 letter to ADOT Director Jennifer Toth.
“When state agencies outsource their important government functions to third parties, and those third parties fail to meet their legal obligations and are not properly supervised as required by law, Arizonans suffer the consequences,” Cook wrote. “In this instance, those consequences are particularly severe and threaten the public safety. Your leadership is necessary to prevent future harm.”
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Toth was appointed to lead the agency in January and was not the head of the agency between March and October 2022, when the audits were conducted.
In 2022, third-party vendors issued around 6 million of the more than 17 million vehicle titles, registrations, driver licenses and ID cards issued in Arizona, making up around 36% of the documents issued that year.
One of the most troubling things auditors found was that, out of 42 driver license and ID card transactions in 2022 they reviewed, eight people received licenses without proof that they were qualified. Five of those people did not provide documentation that they had passed a driving test and two of them did not provide evidence that they’d passed a vision screening. And another person who received a license provided proof of neither a driving test nor a vision screening.
Auditors also found problems with third-party contractors who provide services for commercial driver’s licenses. In one instance, a CDL examiner during a road test coached an applicant on how to make left turns, how to safely drive at night and what gear they should be in. Even though an MVD inspector noted the examiner’s violations, the applicant still received a license — and three months later crashed while driving a commercial vehicle containing hazardous materials.
“Although we asked MVD’s inspector and supervisor on multiple occasions why they would not recommend an examiner change the applicant’s score from pass to fail after identifying violations like those described here, we did not receive any responses,” auditors wrote in the report.
State auditors also found that 10 people or businesses out of 88 transactions reviewed received vehicle titles without proving the lawful transfer of ownership. And four people out of 42 transactions reviewed received driver licenses or IDs even though they didn’t provide sufficient identity or residency documentation.
Back in 2015, the MVD told auditors that it planned to change its third-party oversight processes to increase efficiency, and auditors recommended that the MVD ensure that its changes did not weaken oversight. In a two-year follow up, auditors found that the MVD implemented the changes along with auditor recommendations, but that it put into place a new quality assurance program in February 2022 that “is inconsistent with recommended practices for monitoring and overseeing third parties’ performance.”
MVD’s failure to provide proper oversight could allow people who aim to commit crimes or acts of terrorism to obtain fraudulent identification, and facilitate vehicle theft if the people who stole a vehicle don’t have to provide proof of legal transfer to obtain a title, auditors wrote.
And most importantly, allowing drivers who are unqualified to obtain licenses could put everyone on the road with that person at risk, auditors said in the report.
Auditors also called out the MVD for not putting third parties on probation, or suspending them, for failing to meet requirements for their contracts, and for not requiring third party workers to attend required ongoing training.
CDL provider oversight
As of December 2022, the MVD had not inspected 19% of CDL providers and 56% of CDL examiners once every two years, as Arizona law requires. The MVD blamed some of the delays on lack of staff to complete the inspections, but auditors found that data discrepancies and a lack of inspection tracking and monitoring also contributed to the problem.
The MVD had not completed inspections of 85 out of 152 CDL examiners within the required time frame, auditors found, with two examiners working for Arizona public school districts overdue for inspections by six years.
At the time of the audit in late 2022, five public school districts that conduct skills tests for potential school bus drivers were overdue for inspections, by between 50 days and almost a year. A CDL is required to drive a school bus.
Auditors also pointed out that the MVD often failed to take action to address violations found during those inspections when it did inspect CDL providers and examiners.
In all of 2021 and 2022, the MVD did not conduct unannounced inspections of CDL providers’ records or covert examiner inspections during driving tests, as it is required to do by federal regulations.
MVD staff told auditors that they have notified providers of upcoming inspections since at least 2015 because providers complained that they might not have adequate staffing and resources available for unannounced inspections. And leaders told auditors they did not believe that the MVD was required to conduct covert monitoring, but federal regulators confirmed that it is.
In an example of the importance of covert monitoring, an inspector found that an examiner was planning to pass an applicant who made multiple driving violations during the skills test, “including encroaching into an adjacent traffic lane and attempting to turn through a crosswalk while a pedestrian was in the crosswalk.”
That examiner only failed the applicant after reviewing the test scoresheet with the inspector.
Auditors also found that, out of 37 CDL providers and examiners MVD inspected in 2021 and 2022, the MVD found violations in all 37 inspection reports but “did not consistently hold CDL providers and examiners accountable for addressing the violations.”
Out of those 37, a whopping 26 did not provide responses that demonstrated how those violations would be fixed.
The audit reports both included lengthy recommendations on how the MVD should improve its oversight of third-party vendors to facilitate increased safety on Arizona roads. They include adherence to regular inspections, both overt and covert, creating better scheduling and documentation practices for inspections and taking remedial action for vendors that make violations.
The MVD agreed with the findings of the audits and said it would change its oversight practices, in line with recommendations from the auditors.
In his letter to Toth, Cook pointed out three third-party vendors of drivers licenses and titles that were deemed high risk and had not completed required self-reviews. Cook said he found it concerning that the MVD began looking at whether third parties were doing their self-reviews in October, but as of April, had not developed “written policies or procedures for reviewing third-party completion of self-reviews or developed a process to ensure that identified errors are accurately corrected.”
Cook requested that the MVD suspend or cancel authorization for the third parties deemed high risk, to investigate all third parties for adherence to the laws that govern their services and to immediately implement the auditor general’s recommended oversight procedures.
In letters to the state legislature, Gov. Katie Hobbs and Toth that accompanied the audit reports, Auditor General Lindsey Perry promised that her office would follow up with the DOT in six months to ensure all of its recommended changes to help address the MVD’s problems were implemented.
“We appreciate the Arizona Auditor General’s report and suggestions,” Bill Lamoreaux, assistant communications director for the DOT told the Arizona Mirror in an emailed statement. “MVD takes these concerns seriously, and has already begun addressing their findings. New draft procedures have been documented and are currently in pilot phase. Upon completion of the pilot, all procedures will be formally adopted. ADOT embraces a culture of continuous improvement and we continue to explore opportunities to review and improve processes.”
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