Ridiculous Reimbursements: State employee mileage can be costly - WAFF-TV: News, Weather and Sports for Huntsville, AL

Ridiculous Reimbursements: State employee mileage can be costly


Alabama lawmakers seeking places to cut costs may find a bountiful opportunity in the mileage reimbursements paid to state employees for using their personal vehicles, an examination of state records reveals.

In October 2012 alone, the state paid out $3.1-million in mileage reimbursements.  For all of the 2012 fiscal year, which ended on September 30, the figure was $24.2-million.

An examination of mileage compensation made public on the state's Department of Finance website reveals departments and individuals receiving reimbursements in the hundreds or thousands of dollars, month after month.

"You're spinning your wheels," complained Alabaster Senator Cam Ward. "It may be that if you're reimbursing at five times the amount that you would pay for an automobile, then why wouldn't you have a car instead of reimbursing so much back?   We need to find out what the cheaper practice is, agency by agency."

In the last session of the Alabama state legislature, Ward sponsored a bill to create a single statewide office for fleet management to supervise the use of any state-financed vehicles, official or personal. 

"The problem is you have no oversight," he said.

State Finance Director Marquita Davis asserts that there are adequate procedures in place to ensure appropriate use of mileage reimbursements, that reimbursements are made at the federally approved level, set by the U.S. Internal Revenue Service, and that sometimes-startling mileage reimbursement amounts may be the result of human nature when it comes to filling out the paperwork. 

"Something of what you see is an accumulation of people who've waited several months before they submit [for reimbursement]," said Davis.

A review of mileage compensation posted online seems to support that contention, in some instances.  There are indeed cases of employees who, according to the state website, were paid zero in reimbursement for several months, then received substantial checks.

But some state employees consistently collected reimbursements in the hundreds or thousands of dollars, month in and month out.

For instance, according to the Department of Finance website, one employee whose name we'll abbreviate as A.V. was paid $485 for mileage compensation in June of 2012, then $736 in July, and $906 in August.   The tally on those numbers rose markedly once the 2013 fiscal year began in October.  In October, the online record indicates, A.V. received a reimbursement payment of $1,048.

Another individual, R.S., received reimbursement payments of $718 in June, $563 in July, $488 in August, and then $1,080 in October.

Likewise, M.H received $950 in June, $615 in July, $759 in August, and $2,444 in October.

"I'm shocked," said Gary Palmer, President of the Alabama Policy Institute.  "That's frankly off the charts. When you have a system like this, it becomes very easy for this to get out of hand, and for people to use this reimbursement system unwisely and maybe even unethically." 

Ward blames the decentralized nature of decision-making on vehicle use questions. 

"What's in place now is a hodgepodge," he said.  "You have everyone making their own policies as to what kind of vehicles they have. Everyone has to go by the same [IRS approved] reimbursement amount, but it may be that the policy on what you get reimbursed for is different from one agency to the next.  And that's silly.  That's not the way to run an efficient state government."

Davis acknowledged there has not been a cost analysis performed on mileage reimbursement versus expanding the state's fleet but she doubts any such plan would succeed in the budget-conscious legislature, if it involved purchasing more vehicles.  

"State legislators wouldn't have the stomach," she said. "There has been a push against buying more vehicles at the state level. The position of the legislature has been the idea of downsizing, and mainstreaming and making government smaller, and one of the things that is completely against the idea of being more cost effective is buying more cars.   There would be a huge pushback if we went to the state legislature and said we were buying more cars for the state."

Huntsville Senator Paul Sanford, who runs his own business, found the idea of a centralized state fleet management system appealing, with reservations. 

"I don't think one person can determine whether Madison County has an overabundance of driving miles for various functions versus Conecuh County," he cautioned.   "That would be too much for an agency to micromanage.  You'd have to trust that you have the right managers and directors in place to oversee that and then maybe just have somebody oversee the fleet concept."

Nonetheless, as an economy measure, Sanford granted a fleet could be the right move. 

"A fleet's probably the best way," he said.  "If you look here in Huntsville, the city has a fleet management program.  The hospital right across the street from my business has a fleet management program.  If you look in the private sector, it's widely used in multiple corporations.  And it's typically because there's a cost savings measure."

Ward pointed to other states that have instituted centralized fleet policies and saved money as a result.

Palmer agreed. 

"It's estimated," he said, "that over a five year period, if we adopted a fleet management policy, and adhered to it, we would save in the range of $49,000,000 to $50,000,000 in a five year period, which is a lot of money."

For that kind of savings, Ward expected state lawmakers would be willing to consider spending on more vehicles.

"I think there's a lot of support," he said, looking at the 2012 figure for mileage reimbursement.  "We should always try to find a way to make that number lower.  I think we can definitely make it lower.  I think we can.   I think we should.  And taxpayers want us to."

Copyright 2012 WAFF. All rights reserved.

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