Report: Kentucky boosted spending on state vehicles even as many saw mileage drop

Kentucky state government tripled its spending on the purchase of vehicles for its central fleet over the last three fiscal years, contributing to a $4 million agency deficit, even as more state vehicles saw little mileage, according to a report released Thursday.

And that was mostly before the COVID-19 pandemic of 2020 shut state offices, leading many public employees to work from home and attend meetings online.

The Legislative Oversight and Investigations Committee held a hearing on the conclusions of its staff report Thursday and urged officials with the Kentucky Finance and Administration Cabinet to do a better job.

The cabinet-run vehicle fleet — including cars, light trucks and sports utility vehicles — is provided to state employees and elected officials, typically while they’re on state business.

“My hope is that you can get this tightened up so that the taxpayers know that we are being efficient with their dollars, and when they see vehicles out, they’ll know that they can feel comfortable that rules are being followed and there is accountability with their dollars,” state Sen. Danny Carroll, R-Benton, told the cabinet officials.

Among the report’s findings:

▪ During Fiscal Year 2019, state agencies drove 1,036 of their leased or purchased vehicles — roughly one-fourth of the central fleet — fewer than 5,000 miles, which means fewer than 20 miles a workday. In 2016, a similar sample showed that 15 percent of state vehicles were driven fewer than 5,000 miles a year, so the trend seems to be growing.

“The commonwealth may be buying more vehicles than necessary,” staff concluded in the report.

▪ Even as fewer vehicles appear necessary, the state is spending more to buy them. Annual spending on purchases for the central fleet of vehicles maintained by the Finance Cabinet steadily rose from $3.4 million in Fiscal Year 2018 to $6.2 million in Fiscal Year 2019 to $9.9 million in Fiscal Year 2020.

▪ Overall spending on the central fleet by the Finance Cabinet has grown enough, and fee income from state agencies that use vehicles has fallen enough, that the cabinet now reports a $4 million budget deficit for fleet operations. There was a $5.8 million surplus as recently as Fiscal Year 2018.

Questioned by lawmakers, Finance Secretary Holly Johnson said she could not immediately explain how the cabinet began to spend more than it collected on the vehicle fleet.

“I’m going to have to go back and look at that,” Johnson told the committee. “I cannot provide you what I’m sure is an accurate answer today.”

▪ Instead of borrowing from the central fleet, state agencies can have their own independent motor pools if they provide written justification to the Finance Cabinet for why that’s necessary and proof that it would not cost more. There were 3,028 independent fleet vehicles in 2019, a 6 percent increase over four years.

But the cabinet failed to require the written justification from at least five agencies: the Office of Attorney General, the Department of Agriculture, the Energy and Environment Cabinet, the Public Protection Cabinet and Facilities and Support Services, which reported having 1,136 vehicles between them.

If agencies don’t justify keeping their motor pools, as required, the state doesn’t know if taxpayers are getting a better or worse deal on the cost of maintaining separate vehicle fleets around state government, staff wrote.