A performance audit of the Arizona Department of Transportation-Motor Vehicle Division, title and registration processing

              STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
A PERFORMANCE AUDIT
OF THE
ARIZONA DEPARTMENT OF TRANSPORTATION-MOTOR
VEHICLE DIVISION,
TITLE AND REGISTRATION PROCESSING
OCTOBER 1982
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 82- 3
DOUGLAS R. NORTON. CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
October 18, 1982
Members of the Arizona Legislature
The Honorable Bruce Babbitt, Governor
M r . William A. Ordway, Director
Arizona Department of Transportation
Transmitted herewith is a report of the Auditor General, A Performance
Audit of the Arizona Department of Transportation, Motor Vehicle Division,
T i t l e and Registration Processing. This report is the f i r s t of a s e r i e s
of reports t o be issued on the Arizona Department of Transportation and is
i n response to Senate B i l l 1001 enacted by the T h i r t y - f i f t h Legislature,
Second Special Session i n 1981.
The blue pages present a summary of the report; a response from the
Director of the Department of Transportation is found on the yellow pages
preceding the appendices.
My s t a f f and I w i l l be pleased t o discuss or c l a r i f y items i n the report.
Respectfully submitted,
~ o u ~ l ! R. s Norton
Auditor General
Staff: William Thomson
Linda J. Blessing
Brent Nelson
Karen Holloway
Sue Ann Freitag
Deborah Baldwin
DRN/ dm
Enclosure
1 1 1 WEST MONROE SUITE 600 PHOENIX. ARIZONA 85003 ( 602) 255- 4385
OFFICE OF THE AUDITOR GENERAL
A PERFORMANCE AUDIT OF THE
ARIZONA DEPARTMENT OF TRANSPORTATION
MOTOR VEHICLE DIVISION, TITLE AND REGISTRATION PROCESSING
A REPORT TO THE
ARIZONA STATE LEGISLATURE
REPORT 82- 3
TABLE OF CONTENTS
INTRODUCTION AND BACKGROUND
FINDINGS
FINDING I
The Plotor Vehicle Division can save $ 316,300 and reduce
the time required t o process t i t l e a p p l i c a t i o n s .
CONCLUSION
FINDING I1
The S t a t e can earn a s much as $ 1,000,000 annually by
t r a n s f e r r i n g r e s p o n s i b i l i t y t o receive d e p o s i t s and
d i s t r i b u t e the v e h i c l e i n - l i e u tax from the County
Treasurers t o the S t a t e Treasurer. In a d d i t i o n , the
Motor Vehicle Division has not adequately c o n t r o l l e d
the timely c o l l e c t i o n of v e h i c l e l i c e n s e taxes and
f e e s from the County Assessors, r e s u l t i n g i n p o t e n t i a l
l o s t i n t e r e s t earnings of $ 344,000.
CONCLUSION
RECOMMENDATIONS
FINDING I11
MVD has not required the c o l l e c t i o n of prior- year
vehicle l i c e n s e taxes i n accordance with S t a t u t e
r e s u l t i n g i n revenue l o s s e s of between $ 102,000 -
$ 312,000 annually. In a d d i t i o n , MVD has not enforced
the c o l l e c t i o n of p e n a l t i e s r e s u l t i n g i n a d d i t i o n a l
l o s t revenue.
Page
i
1
FINDING I V
The Department has f a i l e d t o a d e q u a t e l y p l a n , manage
and support computer systems development f o r a major
MVD computer system f o r t i t l e and r e g i s t r a t i o n
processing.
CONCLUSION
RECOMMENDAT I0 NS
OTIIER PERTINENT INFORMATION
AREAS FOR FURTHER AUDIT WORK
WRITTEN PISPONSE TO AUDITOR GENERAL'S REPORT
APPENDIX
- Page
3 5
MVD T i t l e Application Trouble L e t t e r
LIST OF TABLES
TABLE 1 -
TABLE 2 -
TABLE 3 -
TABLE 4 -
TABLE 5 -
TABLE 6 -
TABLE 7 -
TABLE 8 -
TABLE 9 -
TABLE 10 -
TABLE 11 -
Notor Vehicle A c t i v i t i e s
lhlVD Expenditures and FTE Positions
Summary of Staff and Dollar Savings t h a t Can
Be Realized by Changes t o the T i t l e Processing
System
Total FTE Positions t h a t Can Be Eliminated by
Reducing Overstaffing and Discontinuing T i t l e
Checking of County Applications
Overstaffing i n the T i t l e Master F i l e Unit
Type and Number of Processing Steps Used by tND
to Process T i t l e s
Percent of License Tax D i s t r i b u t i o n t o Each Party
E n t i t l e d t o a D i s t r i b u t i o n per A. R. S. $ 28- 1591,
Subsection C
P o t e n t i a l I n t e r e s t Earnings on Immediate Deposit
of Vehicle License Tax t o S t a t e Rather than t o
Counties
Survey Responses f o r Noncollection of Past Vehicle
License Taxes
Estimated Man- hours and Cost Overbudget f o r
Completion of T & R Redevelopment
Cost Savings Resulting from Fully Automated T i t l e
System
- Page
2
3
The o f f i c e of the Auditor General has completed a performance a u d i t of the
vehicle t i t l e and r e g i s t r a t i o n process administered by the Arizona
Department of Transportation ( ADOT), Motor Vehicle Division ( blVD). This
a u d i t was conducted i n response t o Senate B i l l 1001, enacted by the
T h i r t y - f i f t h Legislature, Second Special Session requiring a performance
a u d i t of the Arizona Department of Transportation and is one of a s e r i e s
of a u d i t s t o be completed on the Department.
We made a preliminary review of a l l major Motor Vehicle Division programs,
however, we limited our d e t a i l e d a u d i t work t o a review of t h e e f f i c i e n c y
and e f f e c t i v e n e s s of t h e v e h i c l e t i t l e and r e g i s t r a t i o n f u n c t i o n ( s e e page
3 for a u d i t scope). Review of t h e v e h i c l e t i t l e and r e g i s t r a t i o n
functions indicated t h a t improvements i n four areas would r e s u l t i n
s i g n i f i c a n t c o s t savings t o t h e S t a t e . These four a r e a s include: the 1 )
t i t l e processing system i t s e l f ; 2) c o l l e c t i o n , deposit and d i s t r i b u t i o n
of vehicle i n - l i e u t a x e s ; 3) noncollection of prior- year vehicle l i c e n s e
taxes and p e n a l t i e s ; and 4) t i t l e and r e g i s t r a t i o n computer system.
The Motor Vehicle Division can r e a l i z e savings of $ 316,300, including a
reduction of 22 full- time employee p o s i t i o n s , by eliminating o v e r s t a f f i n g
and unneeded a c t i v i t i e s i n processing t i t l e a p p l i c a t i o n s ( s e e page 5).
The d i v i s i o n can reduce t i t l e processing time from 16 workdays t o a s few
as 3.5 workdays by streamlining the t i t l e processing system ( see page
14). In a d d i t i o n , management c o n t r o l can be enhanced by developing v i a b l e
work standards t o c o n t r o l production ( see page 17).
The S t a t e can earn a s much a s $ 1,000,000 annually by t r a n s f e r r i n g
r e s p o n s i b i l i t y t o receive d e p o s i t s and d i s t r i b u t e the v e h i c l e in- lieu tax
from the county t r e a s u r e r s t o the S t a t e Treasurer ( see page 22). The
s t a t u t e s p r e s e n t l y r e q u i r e the r e g i s t e r i n g o f f i c e r t o promptly deposit the
vehicle tax with the county t r e a s u r e r i n the county i n which the vehicle
is r e g i s t e r e d . The county t r e a s u r e r is t o d i s t r i b u t e the vehicle l i c e n s e
tax by the 15th day of the following month. However, the S t a t e has a
d i r e c t i n t e r e s t i n 62.325 percent of the t o t a l l i c e n s e t a x c o l l e c t e d while
the county has a d i r e c t i n t e r e s t i n only 17.125 percent of t o t a l l i c e n s e
tax c o l l e c t e d .
In a d d i t i o n , MVD has no c e n t r a l c o n t r o l t o a s s u r e t h a t other t i t l e ,
r e g i s t r a t i o n and r e l a t e d f e e s a r e submitted i n a timely manner a s required
by A. R. S. S28- 301. D. We found money was not being t r a n s f e r r e d immediately
t o the Division as required by s t a t u t e . I f IND implemented c o n t r o l s to
assure the timely c o l l e c t i o n of v e h i c l e f e e s and taxes from the counties
a s required by s t a t u t e , a n a d d i t i o n a l $ 344,000 i n i n t e r e s t earnings would
be generated ( see page 25).
The Motor Vehicle Division and t h e county a s s e s s o r s a c t i n g a s agents f o r
FlVD do not c o l l e c t unpaid vehicle l i c e n s e taxes due f o r p r i o r r e g i s t r a t i o n
periods r e s u l t i n g i n l o s t revenue t o the S t a t e of between $ 102,000 and
$ 312,000 annually ( see page 29). I n a d d i t i o n , MVD h a s n o t promulgated
standard procedures f o r tax or penalty c o l l e c t i o n on prior- year
r e g i s t r a t i o n s . As a r e s u l t , penalty c o l l e c t i o n by t h e c o u n t i e s on these
l a t e r e g i s t r a t i o n s is i n c o n s i s t e n t causing f u r t h e r revenue l o s s ( see page
33). The blotor Vehicle Division should implement c o n t r o l s and e s t a b l i s h
procedures to ensure t h a t taxes and p e n a l t i e s a r e c o l l e c t e d from vehicle
owners who have skipped a r e g i s t r a t i o n cycle.
F i n a l l y , n e i t h e r MVD nor the Information Systems Group ( ISG) of ADOT has
adequately managed computer resources t o develop and implement the T i t l e
and R e g i s t r a t i o n ( T & R) computer processing system ( see page 35). The
agency a s of June 30, 1982, h a s n o t f u l l y developed and implemented system
c a p a b i l i t i e s , although they were o r i g i n a l l y planned i n 1968 and p a r t i a l l y
implemented i n 1971. Noncompletion of the t i t l e and r e g i s t r a t i o n system
has impaired the e f f e c t i v e n e s s and e f f i c i e n c y of processing and p o t e n t i a l
cost savings from automation have been l o s t ( see page 38).
The Department should formulate p r o j e c t i n i t i a t i o n and c o n t r o l procedures
for a l l computer development p r o j e c t s i n order t o s e t development
p r i o r i t i e s and e f f e c t i v e l y schedule p r o j e c t s . I n a d d i t i o n , t h e Department
should r e v i s e i t s cost accounting system i n order t o adequately monitor
and c o n t r o l development c o s t s and implementation d a t e s or otherwise
provide a nethod f o r cost tracking systems development.
We i d e n t i f i e d p o t e n t i a l a r e a s f o r f u r t h e r a u d i t work t h a t we could not
pursue due to time c o n s t r a i n t s . The a r e a s include Weight Enforcement, Tax
Collection, Driver Licensing, F i n a n c i a l R e s p o n s i b i l i t y and Abandoned
Vehicles. For a l i s t of these p o t e n t i a l a u d i t a r e a s , s e e page 45.
iii
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has completed a performance a u d i t of the
vehicle t i t l e and r e g i s t r a t i o n process administered by the Arizona
Department of Transportation ( ADOT), Motor Vehicle Division ( MVD). This
a u d i t was conducted i n response t o Senate B i l l 1001, enacted by the
T h i r t y - f i f t h L e g i s l a t u r e , Second Special Session requiring a performance
a u d i t of the Arizona Department of Transportation and i s one of a s e r i e s
of a u d i t s to be completed on the Department.
The Motor Vehicle Division is one of s i x d i v i s i o n s of the Arizona
Department of Transportation. The D i v i s i o n ' s major r e s p o n s i b i l i t y is to
regulate motor vehicle operations i n Arizona. This r e g u l a t i o n is
accomplished through the following a c t i v i t i e s :
1. Registering and l i c e n s i n g a l l vehicles and recording vehicle
t i t l e s ;
2. Testing a p p l i c a n t s and issuing d r i v e r l i c e n s e s ;
3. Evaluating d r i v e r s and driving records t o remove unsafe d r i v e r s
from the road;
4. Suspending or revoking driving p r i v i l e d g e s of d r i v e r s involved i n
accidents who do not meet f i n a n c i a l r e s p o n s i b i l i t y requirements;
5. Licensing and r e g u l a t i n g motor v e h i c l e d e a l e r s , manufacturers and
wreckers ;
6. Inspecting school buses and c e r t i f y i n g school bus d r i v e r s ;
7. Processing of abandoned vehicle r e p o r t s f o r auction; and
8. Issuing oversize permits and enforcing weight laws.
The Division is a l s o responsible f o r c o l l e c t i n g taxes and f e e s e s t a b l i s h e d
by the S t a t e L e g i s l a t u r e t o support the c o n s t r u c t i o n and maintenance of
highways. In 1981 MVD c o l l e c t e d over $ 222 m i l l i o n i n f u e l t a x e s , v e h i c l e
r e g i s t r a t i o n f e e s and other revenues. Most of the revenue comes from the
eight- cent- per- gallon S t a t e t a x on gasoline and d i e s e l f u e l . The Division
operates 16 Port- of- Entry s t a t i o n s f o r the issuance of various permits
where approximately 3 m i l l i o n commercial vehicles pass over the s t a t e
border each year paying almost $ 12 m i l l i o n i n taxes and fees.
Prior to 1927, the Secretary of S t a t e was responsible f o r the
annual r e g i s t r a t i o n of vehicles, and t h e c o u n t i e s were responsible
f o r public highways i n Arizona. In 1927, the Arizona Highway
Department was created with the function of " administering a l l
matters and a f f a i r s d i r e c t l y a f f e c t i n g , concerning, or r e l a t i n g t o
the highways of the s t a t e . " At the same time, t h e d i v i s i o n of
motor v e h i c l e s of t h e S t a t e Highway Department was created t o i s s u e
l i c e n s e p l a t e s , process a l l r e g i s t r a t i o n and t i t l e a p p l i c a t i o n s and
examine a p p l i c a n t s f o r d r i v e r l i c e n s e s . County a s s e s s o r s were
designated a s o f f i c e r s of t h e d i v i s i o n t o perform d u t i e s delegated
t o them by t h e d i v i s i o n . Currently the counties a i d i n processing
t i t l e and r e g i s t r a t i o n a p p l i c a t i o n s , receiving one d o l l a r f o r each
t i t l e or r e g i s t r a t i o n processed.
In 1973, the Arizona Department of Transportation was created t o
provide f o r an i n t e g r a t e d and balanced S t a t e t r a n s p o r t a t i o n system,
replacing t h e S t a t e Highway Department. In 1977, an act was passed
amending A. R. S. $ 28- 301 to allow the d i r e c t o r of ADOT and the
board of supervisors of any county t o e n t e r i n t o a contract
providing f o r the t r a n s f e r of d u t i e s and r e s p o n s i b i l i t i e s
concerning t i t l e s and r e g i s t r a t i o n from the county a s s e s s o r t o the
Motor Vehicle Division. Currently, Pima and Apache Counties have
t r a n s f e r r e d these d u t i e s t o the S t a t e .
The following t a b l e lists s i g n i f i c a n t motor vehicle a c t i v i t i e s of
t h e Division f o r a four- year period.
TABLE 1
MOTOR VEHICLE ACTIVITIES
Driver license
a p p l i c a t i o n s
1978- 79 1979- 80 1980- 81 1981- 82
Actual Actual Actual Estimated
Vehicles r e g i s t e r e d 1,944,960 2,042,208 2,098,160 2,150,000
T i t l e s issued 961,136 942,584 967,167 997,167
The following t a b l e lists expenditures and number of full- time
employees ( FTE) of the Division f o r a five- year period.
TABLE 2
MVD EXPENDITURES AND FTE POSITIONS*
1978- 79 1979- 80 1980- 81 1981- 82 1982- 83
Operating Budget Actual Actual Actual Estimated Approved
Number of FTE
p o s i t i o n s 737 729 735 730 723
Personal s e r v i c e s $ 8,249,780 $ 8,911,841 $ 9,887,600 $ 11,222,400 $ 11,247,900
Enployee- related
expenses 1,792,661 1,853,589 2,178,800 2,517,000 2,566,000
Professional and
outside s e r v i c e s 3,054 23,376 15,000 51,100 118,000
0 Travel - in- State 49,592 67,515 73,100 90,900 105,700
Travel - out- of- State 2,500 4,603 5,100 5,900 5,900
Other operating
expenses 1,358,968 1,066,929 1,222,500 1,447,700 1,439,200
Equipment 61,253 61,665 65,100 99,700 60,000
Subtotal 11,517,808 11,989,518 13,447,200 15,434,700 15,542,700
License p l a t e s
and tabs
Motor c a r r i e r s
County l i c e n s i n g /
r e g i s t r a t i o n 100,000
Total $ 12,458,201 $ 12,694.518 $ 13,911,300 $ 16,104,700 $ 16.436.300
* Source: S t a t e of Arizona Appropriations Reports f o r 1980- 81, 1981- 82, and 1982- 83.
Scope of Audit
Due to time and resource c o n s t r a i n t s , the scope of our Motor
Vehicle Division a u d i t was limited t o a review of the e f f i c i e n c y
and e f f e c t i v e n e s s of t h e v e h i c l e t i t l e and r e g i s t r a t i o n function.
This function is a major d i v i s i o n a c t i v i t y which a. lso involves
considerable county employees and resources. In a d d i t i o n , our
limited review of other MVD functions and programs disclosed
p o t e n t i a l a r e a s of concern t h a t we were unable t o address.
Functions and programs which may warrant f u t u r e a u d i t a t t e n t i o n
include :
- Weight enforcement,
- Revenue c o l l e c t i o n and a u d i t s ,
- Driver l i c e n s i n g and d r i v e r improvement,
- Financial r e s p o n s i b i l i t y , and
- Abandoned vehicles.
Additional information regarding these a r e a s is provided under AREAS FOR
FURTHER AUDIT WORK on page 45.
FINDING I
THE MOTOR VEHICLE DIVISION CAN SAVE $ 316,300 AND REDLICE TEE TIME REQUIRED
TO PROCESS TITLE APPLICATIONS.
The Motor Vehicle D i v i s i o n c a n r e a l i z e savings of $ 316,300, including a
reduction of 22 f u l l - t i m e employee ( FTE) p o s i t i o n s , by e l i m i n a t i n g
o v e r s t a f f i n g and unneeded a c t i v i t i e s i n processing t i t l e a p p l i c a t i o n s .
The Division can reduce t i t l e processing time from 16 workdays t o a s few
a s 3.5 workdays by streamlining the t i t l e processing system.
In a d d i t i o n , management c o n t r o l can be enhanced by developing v i a b l e work
standards t o c o n t r o l production. The savings i n s t a f f and d o l l a r s t h a t
can be r e a l i z e d a r e summarized i n Table 3.
TABLE 3
SUPDIARY OF STAFF AND DOLLAR SAVINGS THAT CAN BE
REALIZED BY CHANGES TO THE TITLE PROCESSING SYSTEEf
Reduce o v e r s t a f f i n g i n t i t l e checking
u n i t ( see page 6)
Eliminate t i t l e checking county a p p l i c a t i o n s
( see page 6)
Reduce o v e r s t a f f i n g i n t i t l e master t i t l e
u n i t ( see page 9)
Eliminate stampingllogging county a p p l i c a t i o n s
( see page 10)
Eliminate typing " single" trouble l e t t e r s
( see page 13)
Reduce number of processing s t e p s
( see page 14)
Reduce processing fragmentation
( see page 1 6 )
Eliminate s p e c i a l handling ( s e e page 16)
TOTAL SAVINGS
S t a f f
Reduction ( FTEs)
Cost
Savings
* I n a d d i t i o n to s t a f f and d o l l a r savings, s i g n i f i c a n t r e d u c t i o n s c a n be made
i n the time t o process t i t l e a p p l i c a t i o n s .
Overstaffing of T i t l e Checking Unit
S t a f f i n g of the T i t l e Checking Unit can be reduced from 27 p o s i t i o n s t o 11
p o s i t i o n s , r e s u l t i n g i n savings i n personnel c o s t s of approximately
$ 236,800 annually. The s t a f f reductions can be accomplished by
e l i m i n a t i n g 1 ) p o s i t i o n s determined t o be unneccessary based on the
current workload of the u n i t and reasonable work standards and 2) the
unnecessary function of t i t l e checking of county- submitted t i t l e
a p p l i c a t i o n s . Table 4 suumarizes the p o t e n t i a l savings i n p o s i t i o n s and
personnel c o s t s .
TABLE 4
TOTAL FTE POSITIONS THAT CAN BE ELIMINATED BY REDUCING OVERSTAFFING
AND DISCONTIKUING TITLE CHECKING OF COUNTY APPLICATIONS
FTE s
Personnel
Costs
Number of f i l l e d p o s i t i o n s
Reduction based on work standards
( page 7)
Reduction by eliminating checking
of county a p p l i c a t i o n s ( page 7)
Number of p o s i t i o n s required
for processing
The T i t l e Checking Unit receives approximately 80 percent of the t i t l e
a p p l i c a t i o n s from county a s s e s s o r s who a c t a s agents f o r the Division.
The remaining 20 percent of the t i t l e a p p l i c a t i o n s c a l l e d " s i n g l e s " a r e
received d i r e c t l y from d e a l e r s , lenders and p r i v a t e i n d i v i d u a l s . The
county a s s e s s o r s check the t i t l e a p p l i c a t i o n s f o r appropriateness,
l e g a l i t y and completeness before forwarding t h e a p p l i c a t i o n s t o MVD. The
llVD T i t l e Checking Unit a l s o reviews a l l t i t l e a p p l i c a t i o n s f o r l e g a l i t y
and completeness before producing the c e r t i f i c a t e s of t i t l e .
Unnecessary Positions i n
s tl e ~ h ekcin g Unit Can
Be Eliminated Saving $ 103,600
The T i t l e Checking Unit is overstaffed by f i v e p o s i t i o n s based upon a
comparison of t h e U n i t ' s workload t o the e x i s t i n g Division work
standards. However, these work standards a r e s e t too low, and use of
revised work standards i n d i c a t e s the Unit i s a c t u a l l y o v e r s t a f f e d by seven
p o s i t i o n s . Elimination of the seven unnecessary p o s i t i o n s would r e s u l t i n
savings i n personnel c o s t s of $ 103,600 annually.
HVD's current work standards f o r the T i t l e Checking Unit were developed i n
1979. Our comparison of the t i t l e checking workload t o these standards
disclosed t h a t 5 of the 27 t i t l e checking p o s i t i o n s a r e not needed. In
a d d i t i o n , we found t h a t the work standards were s e t too low since more
than h a l f of the t i t l e checking employees a r e c o n s i s t e n t l y producing a t a
l e v e l s i g n i f i c a n t l y higher than t h e e s t a b l i s h e d standards.
In conjunction with the T i t l e Checking Unit supervisor and employees, our
Office developed a revised work standard f o r the t i t l e checking a c t i v i t y
which is s i g n i f i c a n t l y higher than the current work standard. I n
determining the amount of o v e r s t a f f i n g , we considered a l l f a c e t s of t i t l e
checking including checking t i t l e s , preparing trouble l e t t e r s and c l e a r i n g
returned trouble a p p l i c a t i o n s . We a l s o included a f a c t o r f o r turnover,
vacation, s i c k and other leave days. A l l other i n c i d e n t a l a c t i v i t i e s were
considered by using a conservative seven- hour workday t o c a l c u l a t e the
number of employees required f o r processing. Based upon the revised work
standard and production h i s t o r y , we found t h a t the T i t l e Checking Unit is
a c t u a l l y overstaffed by seven p o s i t i o n s .
T i t l e Checking of County Applications
Can Be Eliminated Saving $ 133,200
In addition to reducing o v e r s t a f f i n g i n the t i t l e checking u n i t , the
Division can a l s o reduce nine s t a f f p o s i t i o n s saving $ 133,200 by
e l i m i n a t i n g t i t l e checking of county- submitted t i t l e a p p l i c a t i o n s . This
function d u p l i c a t e s t i t l e checking performed by the county a c t i n g a s an
agent f o r the Division, and the e r r o r r a t e on county a p p l i c a t i o n s is
minimal. Eliminating nine p o s i t i o n s would still enable the Division to
sample a minimum of 10 percent of the county a p p l i c a t i o n s t o i d e n t i f y
problem a r e a s .
T i t l e a p p l i c a t i o n s received from county a s s e s s o r s , who a c t as agents f o r
the Division, are checked a s t o appropriateness, l e g a l i t y and completeness
before being forwarded t o MVD f o r f u r t h e r processing. At the Division the
a p p l i c a t i o n is again " t i t l e checked" and approved f o r t i t l e production.
Applications which a r e not approved f o r t i t l e production a r e returned t o
the r e s p e c t i v e county assessor f o r problem r e s o l u t i o n . I n c o n t r a s t , a
s i g n i f i c a n t number of other t i t l e a p p l i c a t i o n s a r e not double- checked by
the Division before t i t l e s a r e produced. Single t i t l e a p p l i c a t i o n s ,
composing approximately 20 percent of Division t i t l e checking a c t i v i t y ,
a r e only checked once by the Division. I n a similar manner, t i t l e
a p p l i c a t i o n s received from Pima County a r e - not rechecked before
processing. Therefore a double check is not c u r r e n t l y provided on a l l
t i t l e a p p l i c a t i o n s .
Our review disclosed t h a t f o r a one- year period 4.5 percent of a l l t i t l e
a p p l i c a t i o n s were determined t o have problems and had t o be returned to
tlie county a s s e s s o r s or i n d i v i d u a l s f o r c o r r e c t i o n . This does not include
n o n c r i t i c a l problems corrected by the t i t l e checkers. The ADOT Venture
Team has recommended t h e e l i m i n a t i o n of t i t l e checking of county
a p p l i c a t i o n s due t o the minimal e r r o r r a t e .
The Venture Team recommendation included a reduction of 18 full- time
employee p o s i t i o n s . This recommendation corresponds c l o s e l y t o ours
except t h a t we i d e n t i f y 7 employee p o s i t i o n s t o be reduced by e l i m i n a t i n g
o v e r s t a f f i n g and 9 p o s i t i o n s t o be reduced by d i s c o n t i n u i n g the t i t l e
checking of county a p p l i c a t i o n s f o r a t o t a l of 16 t i t l e checking employee
p o s i t i o n s ( s e e Table 4, page 6). As w i l l be explained l a t e r i n t h i s
f i n d i n g , we a l s o i d e n t i f i e d a n a d d i t i o n a l s i x employee p o s i t i o n s which can
be eliminated i n r e l a t e d t i t l e processing f u n c t i o n s . I n a d d i t i o n , while
the Venture Team recommended elimination of the 18 p o s i t i o n s i n the f i s c a l
year 1982- 83 budget, IWD plans t o eliminate the p o s i t i o n s through
a t t r i t i o n by June 30, 1983, as a r e s u l t of e l i m i n a t i n g t h e checking of
county t i t l e a p p l i c a t i o n s . Based on our review, the Division could
immediately reduce o v e r s t a f f i n g by seven p o s i t i o n s and then eliminate
another nine p o s i t i o n s once it ceases the county t i t l e checking function.
Overstaffing of T i t l e Master F i l e Unit
Our review indicated t h a t the T i t l e Master F i l e Unit is o v e r s t a f f e d by
f i v e employee p o s i t i o n s . This determination was made by i d e n t i f y i n g the
workload of the Unit and the time needed t o complete a l l d u t i e s required
based on the workload.
TABLE 5
OVERSTAFFING I N THE TITLE MASTER FILE UNIT
Personnel
FTE s Costs
Nunber of manual f i l e c l e r k p o s i t i o n s
Reduction based on work
standards
Number of p o s i t i o n s required f o r
processing
The T i t l e Master F i l e Unit a t the D i v i s i o n maintains a manual f i l e
consisting of copies of a l l c e r t i f i c a t e s of t i t l e issued. At the time a
new c e r t i f i c a t e of t i t l e is produced, a card- sized copy c a l l e d t h e t i t l e
I . D . card is a l s o produced. The new t i t l e I . C . card is compared t o any
e x i s t i n g t i t l e I. D. cards i n t h e v e h i c l e f i l e and is then f i l e d by v e h i c l e
i d e n t i f i c a t i o n number i n the manual t i t l e f i l e p r i o r t o r e l e a s e of the new
t i t l e . Old t i t l e I . D . cards a r e then discarded.
Currently, the Division has no work standards f o r the T i t l e Master F i l e
Unit. However, based upon the work standard developed by our Office and
the h i s t o r i c a l output of the Unit, the Unit is o v e r s t a f f e d by f i v e •
employee p o s i t i o n s representing $ 61,500 of f i s c a l year 1981- 82 employee
c o s t s . The work standard was developed i n conjunction with the Unit
supervisor and considered a l l f a c t o r s and d u t i e s of o p e r a t i o n i n c l u d i n g
allowing 40 percent of the work standard t i n e f o r phone c a l l s , m i s f i l e s , •
o t h e r i n t e r r u p t i o n s and miscellaneous i n c i d e n t a l a c t i v i t i e s . We
considered vacation, s i c k and other leave days i n our c a l c u l a t i o n s . The
number of p o s i t i o n s o v e r s t a f f e d is a conservative f i g u r e because there
were a c t u a l l y 21 p o s i t i o n s assigned t o the manual f i l e but we excluded a
t h r e e p o s i t i o n s to provide one person f o r t e l e t y p e requests and two
persons t o be " f l o a t e r s . " In a d d i t i o n , we provided a f a c t o r f o r employee
turnover.
Logging and Stamping of County
T i t l e Applications Can Be Eliminated
The a c t i v i t i e s of 1 ) date stamping and 2) s o r t i n g and logging of county
t i t l e a p p l i c a t i o n s can be e f f e c t i v e l y eliminated reducing s t a f f a
requirements by one full- time p o s i t i o n and saving $ 11,400 i n annual
personnel c o s t s . While t h e d a t e stamping of t i t l e a p p l i c a t i o n s is
required by s t a t u t e t o p r o t e c t l i e n h o l d e r s , e x i s t i n g processing c o n t r o l s
provide the necessary p r o t e c t i o n f o r l i e n h o l d e r claims. The s o r t i n g and
logging of a p p l i c a t i o n s does not f a c i l i t a t e processing but merely
compensates f o r the untimely processing system by providing information
regarding a p p l i c a t i o n s i n process.
A. R. S. $ 28- 325.~. r e q u i r e s t h e Division t o date stamp a l l l i e n instruments
and t i t l e a p p l i c a t i o n s f o r l i e n s t o be recorded on vehicle t i t l e s and
s t a t e s :
" Upon r e c e i p t of t h e a p p l i c a t i o n and documents as
provided i n t h i s s e c t i o n , t h e v e h i c l e d i v i s i o n s h a l l
f i l e them, endorsing thereon t h e d a t e and hour received
a t the c e n t r a l o f f i c e of the d i v i s i o n . . . ." ( emphasis
added)
The purpose of the stamping of a p p l i c a t i o n documents appears t o r e l a t e t o
l i e n h o l d e r p r o t e c t i o n a s the s t a t u t e s provide t h a t
" The f i l i n g and issuance of a new c e r t i f i c a t e of t i t l e
a s provided i n t h i s s e c t i o n s h a l l c o n s t i t u t e
constructive notice t o c r e d i t o r s of the owner or t o
subsequent purchasers of a l l l i e n s and encumbrances
against the vehicle described t h e r e i n , except those
authorized by law which a r e dependent upon possession.
I f the documents r e f e r r e d t d i n t h i s s e c t i o n a r e
received and f i l e d i n the c e n t r a l o f f i c e of t h e v e h i c l e
d i v i s i o n within ten days a f t e r t h e d a t e of execution
t h e r e o f , t h e c o n s t r u c t i v e n o t i c e s h a l l date from the
time of execution, but otherwise the n o t i c e s h a l l date
from the time of r e c e i p t and f i l i n g of the documents by
the vehicle d i v i s i o n a s shown by its endorsement
thereon." ( emphasis added)
S u f f i c i e n t c o n t r o l s e x i s t i n Division processing of t i t l e a p p l i c a t i o n s t o
p r o t e c t t h e i n t e r e s t s of l i e n h o l d e r s . F i r s t , a l l l i e n s a r e entered on the
face of the vehicle c e r t i f i c a t e of t i t l e . The Division w i l l not process a
new c e r t i f i c a t e of t i t l e u n l e s s t h e o l d l i e n is entered on the new
a p p l i c a t i o n of t i t l e or unless a properly endorsed l i e n r e l e a s e is
submitted i n d i c a t i n g t h a t t h e p r i o r l i e n has been s a t i s f i e d . Second,
t r a n s f e r of a n e x i s t i n g l i e n w i l l not be e f f e c t e d unless the a p p l i c a t i o n
f o r t i t l e t r a n s f e r is accompanied by w r i t t e n consent of the l i e n h o l d e r .
Third, a l l t i t l e a p p l i c a t i o n s a r e placed i n dated baskets and subsequently
processed by the Division i n the order i n which they a r e received, and the
old t i t l e must be submitted with the t i t l e a p p l i c a t i o n . Further, whi- le
elimination of the requirement f o r date stamping of a p p l i c a t i o n s would
require a s t a t u t o r y change, we noted t h a t t h e Division is not c u r r e n t l y
complying with 4. P. S. § 28- 325. C. i n . t h a t l i e n instruments and
corresponding t i t l e a p p l i c a t i o n s a r e not date stamped on the date received
but a r e date stamped up t o fonr days a f t e r r e c e i p t .
The s o r t i n g and logzing of a p p l i c a t i o n s can a l s o be eliminated. The
s o r t i n g of a p p l i c ~ t i o n s by county does not f a c i l i t a t e processing but is
necessary hecause the processing of t i t l e a p p l i c a t i o n s i s untimely ( see
page 14). The county logs are used primarily t o £ 0 1 1 ~ : ~ up cn phone
i n q u i r i e s from the public regarding the s t a t u s of vehicle t i t l e s and/ or t o
have t j t l e s rushed. Both a c t i v i t i e s could be eliminated i f the vehicle
t i t l e and r e g i s t r a t i o n process was streamlined.
One of the major delays i n t i t l e processing is the r e s u l t of
i n e f f i c i e n c i e s i n the t i t l e checking phase. The backlog of work i n t i t l e
checking is between 11 and 19 days depending on the point i n time a t which 0
the system is examined. I f t i t l e checking of county a p p l i c a t i o n s is
eliminated ( see page 7 ) , the importance of s o r t i n g and logging t i t l e
a p p l i c a t i o n s w i l l be reduced.
The Typing of Single Trouble
L e t t e r s Can Be Eliminated
The Division can e f f e c t i v e l y eliminate the procedure of typing " trouble
l e t t e r s " when s i n g l e t i t l e a p p l i c a t i o n s a r e returned t o d e a l e r s , lenders a
o r p r i v a t e i n d i v i d u a l s f o r c o r r e c t i o n s of e r r o r s . Tllis p r a c t i c e is
unnecessary, d u p l i c a t i v e and delays t i t l e processing. By e l i m i n a t i n g t h e
retyping of s i n g l e trouble l e t t e r s the D i v i s i o n c a n save a t l e a s t $ 6,600
i n employee c o s t s annually, and processing delays caused by retyping the
l e t t e r s can be avoided."
As explained e a r l i e r , t i t l e a p p l i c a t i o n s a r e received i n the mail from
e i t h e r c o u n t i e s , d e a l e r s , lendors o r p r i v a t e i n d i v i d u a l s . Applications
received from the l a t t e r sources a r e c a l l e d " s i n g l e s " by the Division.
After t i t l e checking, those a p p l i c a t i o n s found t o have e r r o r s a r e returned
* A copy of the form " trouble l e t t e r " used by the Division is included
i n the appendix to t h i s r e p o r t .
to t h e a p p r o p r i a t e county or person. A form l e t t e r is prepared by the
t i t l e checker to i n d i c a t e what e r r o r was made or what a d d i t i o n a l
information or f e e s a r e r e q u i r e d . T h i s form l e t t e r is c a l l e d a " trouble
l e t t e r " by the Division. Trouble l e t t e r s f o r s i n g l e s a r e typed before
being s e n t . Trouble l e t t e r s t o counties a r e sent without being typed.
The Division Management Analysis Unit conducted a study of t i t l e
processing i n 1979. During the study it was found t h a t t h e handwritten
trouble l e t t e r s prepared by t i t l e checkers were being retyped before being
mailed out. The management a n a l y s t s recommended t h a t the t i t l e checkers
mark t h e a p p r o p r i a t e comments on the t r o u b l e l e t t e r and type the name and
address on the handwritten l e t t e r r a t h e r t h a n r e t y p i n g the e n t i r e trouble
l e t t e r . However, t h i s procedure was adopted only f o r t r o u b l e l e t t e r s
being sent t o t h e c o u n t i e s . S i n g l e trouble l e t t e r s continued to be
retyped by the Division. According t o Division o f f i c i a l s the reason f o r
retyping is t h a t f r e q u e n t l y t i t l e checkers' comments a r e not
understandable, handwriting is i l l e g i b l e and a typed t r o u b l e l e t t e r looks
b e t t e r .
Our review of the handwritten t r o u b l e l e t t e r s which were retyped by the
Division showed t h a t a l l of them were l e g i b l e , and i n 69 percent of the
cases no s p e c i a l i n s t r u c t i o n s had t o be w r i t t e n out i n the comments
s e c t i o n . I n a d d i t i o n , we found t h a t typing the l e t t e r s caused a
s i g n i f i c a n t delay i n t h a t t h e r e was a backlog of t r o u b l e l e t t e r s waiting
to be typed. On March 22, 1982, we found the average typing backlog t o be
4.2 working days, and t h e r e were some handwritten t r o u b l e l e t t e r s dating
back to Plarch 9, 1982, waiting t o be typed. Previously on February 16,
1982, the backlog f o r typing t r o u b l e l e t t e r s was seven working days.
In a d d i t i o n , we found t h a t 45 percent of the s i n g l e t r o u b l e l e t t e r s , when
returned to t h e D i v i s i o n , were delayed approximately 3.6 days i n the Steno
Unit a f t e r being d a t e stamped a s received by the Unit and before being
sent f o r f u r t h e r processing. No f u r t h e r work is performed regarding the
trouble l e t t e r s by the Steno Unit so t h i s p r a c t i c e appears t o be an
u n j u s t i f i e d delay f o r which the Division could provide no explanation.
The T i t l e Processing Svstem Can
Be Streamlined to Reduce Processing Time
The t i t l e processing system can be streamlined t o reduce a p p l i c a t i o n
processing time from an average of 16 workdays t o a s few a s 3.5 workdays.
This streamlining can be accomplished by 1) reducing the number of s t e p s
required t o process a p p l i c a t i o n s , 2) a r r a n g i n g p r o c e s s i n g u n i t s both
p h y s i c a l l y and o r g a n i z a t i o n a l l y to provide a smooth flow of documents,
3) e s t a b l i s h i n g a n adequate r e p o r t i n g scheme, and 4 ) developing viable
work standards f o r each a c t i v i t y performed i n the t i t l e processing system.
Untimely and I n e f f i c i e n t Processing
The Plotor Vehicle Division does not process vehicle t i t l e a p p l i c a t i o n s i n
an e f f i c i e n t and timely manner. Untimely and i n e f f i c i e n t processing
r e s u l t s i n excessive delays i n i s s u i n g c e r t i f i c a t e s of t i t l e t o owners.
At one point during our review, the Division expended 16 working days t o
complete a t i t l e a p p l i c a t i o n , however, we could i d e n t i f y only 4.5 days
during which a c t u a l processing took p l a c e . The remaining 11.5 days of
delay time r e s u l t e d from unnecessary processing s t e p s , fragmentation of
the process flow and inadequate management c o n t r o l over the processing
system.
A review of t i t l e processing s t e p s i n d i c a t e s t h a t most processing s t e p s
a r e designed to support the processing system r a t h e r than to support the
a c t u a l processing of a p p l i c a t i o n s and production of c e r t i f i c a t e s of
t i t l e . We i d e n t i f i e d 84 basic s t e p s used i n t i t l e processing a t the
Division. Twenty- four s t e p s involved the movenent of t i t l e a p p l i c a t i o n s
from one place t o another to be processed. Twelve s t e p s involved
processinb delays such a s placing a p p l i c a t i o n s on a shelf t o await
processing by another processing u n i t . Of the remaining 48 s t e p s i n
processing, only 16 or 33.3 percent were deterzined t o be e s s e n t i a l i n the
processing of the t i t l e a p p l i c a t i o n s . Table 6 i l l u s t r a t e s the types and
number of processing s t e p s i n the t i t l e process.
TAELE 6
TYPE AND NUMBER OF PROCESSING STEPS USED EY
MVC TO PROCESS TITLES
Type of Step
Number
of Steps Percent
Plovement of a p p l i c a t i o n s from one place
to another 24
Delay of a p p l i c a t i o n processing 12
E s s e n t i a l to a p p l i c a t i o n processing and
t i t l e production 16
Serves processing system r a t h e r than a c t u a l
a p p l i c a t i o n and production processing
Total processing s t e p s
As shown by Table 6 , only 16 s t e p s or 19 percent of the t o t a l processing
s t e p s a r e a c t u a l l y e s s e n t i a l t o the processing of t i t l e a p p l i c a t i o n s and
include such things a s i n s p e c t i n g supporting documentation, assigning
t i t l e numbers and producing the c e r t i f i c a t e s of t i t l e . Reducing the
number of s t e p s which t r a n s f e r processing from one i n d i v i d u a l t o another
and cause processing delays ( 43 percent of t o t a l s t e p s ) can g r e a t l y
f a c i l i t a t e the e f f i c i e n t and timely handling of t i t l e a p p l i c a t i o n s . A
f u r t h e r a n a l y s i s of remaining processing s t e p s t o e l i m i n a t e those which
a r e not a b s o l u t e l y e s s e n t i a l should r e s u l t i n a more streamlined t i t l e
processing system.
T i t l e Processing a t
PiVD Is Fragmented
T i t l e a p p l i c a t i o n processing a t the Division is fragmented and does not
provide f o r a suiooth workflow. Five i n d i v i d u a l processing u n i t s a r e
involved i n the processing and production of t i t l e s . T i t l e a p p l i c a t i o n s
during the course of processing change hands 20 times. Eight of the
changes i n processing a r e made among the f i v e u n i t s involved i n processing
while the remaining twelve changes r e p r e s e n t changes between i n d i v i d u a l s
within processing u n i t s .
T i t l e a p p l i c a t i o n s t r a v e l approximately 1,600 f e e t a t the bIVD building i n
order to be processed. This d i s t a n c e is more than a q u a r t e r mile and
includes nine changes among t h e t h r e e d i f f e r e n t f l o o r s of the f our- story d
b1VD building. Six s t a f f hours each day a r e spent on these f l o o r and
handling changes.
According t o u n i t managers, the f i v e u n i t s involved i n t i t l e processing 0
a c t autonomously, although they do depend on one another f o r work flow.
I n one c a s e d u r i n g the course of our a u d i t , one u n i t was s i g n i f i c a n t l y
i d l e while waiting f o r work t o come from another u n i t . L a t e r , when t h i s
same u n i t was backlogged, it was determined t h a t p a r t of the work
c o n t r i b u t i n g t o the backlog had existed a t the time the u n i t was i d l e , but
the work was not sent f o r processing a t t h a t time. Therefore,
fragmentation a f f e c t s the smooth operation of t h e processing system and
the timely issuance of v e h i c l e c e r t i f i c a t e s of t i t l e .
S ~ e c i a lH andline Can Be
Eliminated by the Division
The Division can e l i m i n a t e t h e s e r v i c e of providing s p e c i a l handling f o r 8
t i t l e a p p l i c a t i o n s upon customer request i f e x i s t i n g t i t l e processing
i n e f f i c i e n c i e s and delays a r e reduced. In t u r n , e l i m i n a t i n g s p e c i a l
handling w i l l provide even g r e a t e r system e f f i c i e n c y .
fa
Special handling c o n s i s t s of placing c e r t a i n t i t l e a p p l i c a t i o n s ahead of
other t i t l e a p p l i c a t i o n s a t s i g n i f i c a n t p o i n t s during the t i t l e
processing. Special handling i s provided on request a t no e x t r a c o s t t o
consumers. Approximately 16 percent of a l l t i t l e a p p l i c a t i o n s a r e a
processed a s s p e c i a l handling by the Division. Special handling r e q u i r e s
a d d i t i o n a l work t o be performed by processing u n i t s other than what would
be required i f a l l a p p l i c a t i o n s were processed i n t u r n . The main reason
f o r s p e c i a l handling is t i m e l i n e s s of processing a s some businesses and 0
i n d i v i d u a l s need a t i t l e i n a timely manner t o complete t r a n s a c t i o n s .
During our review we found t h a t regular t i t l e a p p l i c a t i o n s were processed
by t h e D i v i s i o n i n about 16 work days ( sometimes l o n g e r ) . We determined
t h a t the average time to process a p p l i c a t i o n s under s p e c i a l handling was @
3.5 days.
Processing time can be improved to eliminate the need f o r s p e c i a l
handling. If tlie Division c o n t r o l s major delays i n t i t l e processing
( t i t l e checkink d e l a y ) , t h e processing time f o r regular a p p l i c a t i o n s can
be reduced from 16 days ( o r more) t o a s few as 4.5 days. By eliminating
t i t l e checking of county a p p l i c a t i o n s and the s o r t i n g , stamping and
logging of t i t l e a p p l i c a t i o n s , processing time can be reduced by one more
day t o as f e w as 3.5 days. This amount compares favorably with the
average processing time f o r s p e c i a l handling a p p l i c a t i o n s and would
thereby e l i n i n a t e the need f o r t h i s type of s e r v i c e and eliminate e x t r a
processing a c t i v i t i e s caused by s p e c i a l handling.
Adequate Reporting and Development of Work
Standards Can Provide Greater Efficiency
A p i l o t study conducted i n 1969 by the consulting firm of Booz, Allen and
Hamilton disclosed t h a t numerous o p p o r t u n i t i e s e x i s t e d within MVD f o r
improvement i n the scheduling and u t i l i z a t i o n of c l e r i c a l s t a f f and i n the
methods of performing work. Detailed a n a l y s i s of c l e r i c a l operations was
conducted i n three p i l o t areas within the Motor Vehicle Division including
tlie t i t l e processing s e c t i o n .
The c o n s u l t a n t s recommended t h a t a work planning and c o n t r o l program be
developed to improve the production of employees, evaluate work performed
and c o n t r o l the l e v e l of output. Part of the work planning and c o n t r o l
program would be t o document the most e f f e c t i v e means of performing work
and to e s t a b l i s h q u a l i t y standards f o r each task. Also included was the
need to quantify manpower requirements and develop time standards f o r each
task. The establishment of a c o n t r o l reporting system was a l s o i d e n t i f i e d
as a basic elenent needed. According t o a Division o f f i c i a l some of the
above reconimendations were followed r e s u l t i n g i n a Performance Analysis
and Reporting System. However, the System was dropped within t h r e e to
four years.
Currently work standards only e x i s t f o r the t i t l e checkers ( a s discussed
previously) and terminal operators who update computer records a t the
Division.
Work standards are being developed f o r s i m i l a r t i t l e and r e g i s t r a t i o n
a c t i v i t i e s performed i n Pina County. On October 1, 1981, t h e D i v i s i o n
assumed r e s p o n s i b i l i t y f o r t i t l e and r e g i s t r a t i o n d u t i e s previously 0
performed by the Pima County Assessor. The Division Management Services
Group conducted a systems study of the Pima operation t o i d e n t i f y needed
o p e r a t i o n a l changes. Two of the study recommendations were t o
1) e s t a b l i s h work standards f o r a l l a c t i v i t i e s i n t h e s e c t i o n and 8
2) i n s t a l l a production a n a l y s i s r e p o r t to generate production r e c o r d s .
Preliminary work standards and a r e p o r t i n g format have been developed and
a r e to be refined. The Division blanagement Services Group manager expects
p r o d u c t i v i t y to improve by 5 percent providing $ 10,000 savings i n s t a f f @
resources. T i t l e processing a t the Division could p r o f i t from a s i m i l i a r
a n a l y s i s , development of work standards and production r e p o r t i n g scheme.
CONCLliSIGN
The Plotor Vehicle 1) ivision can save more than $ 300,000 and eliminate 22
f u l l - t i n e p o s i t i o n s by e l i m i n a t i n g o v e r s t a f f i n g and unneeded a c t i v i t i e s .
In a d d i t i o n , t h e Division can a l s o reduce the time required t o process
t i t l e a p p l i c a t i o n s from an average of 16 workdays t o a s few a s 3.5 9
workdays by streamlining the t i t l e processing system.
1. The Division eliminate o v e r s t a f f i n g i n the T i t l e Checking and T i t l e e
Plaster F i l e Units of 12 and 7 employee p o s i t i o n s , r e s p e c t i v e l y .
2. The Llivision eliminate a l l unnecessary t i t l e functions and
a c t i v i t i e s including but not l i m i t e d t o the following ones: a
a. Eliminate t i t l e checking of county t i t l e a p p l i c a t i o n s and reduce
s t a f f by e i g h t p o s i t i o n s ( planned to be implemented by the
Uivision i n f i s c a l year 1982- 53).
IUiCOPiPfENDATIONS ( Concl ' d)
b. Eliminate the s o r t i n g , stamping and logging of county t i t l e
a p p l i c a t i o n s and reduce s t a f f by one p o s i t i o n .
c. Eliminate the s p e c i a l handling s e r v i c e provided t o 16 percent of
a l l t i t l e a p p l i c a t i o n s .
d. Eliminate the retyping of s i n g l e t r o u b l e l e t t e r s .
3. The Division streamline t i t l e processing t o reduce processing time by
reviewing t i t l e processing a c t i v i t i e s and o r g a n i z a t i o n a l r e l a t i o n s h i p s
of work u n i t s t o s i m p l i f y t h e system and reduce fragmentation of t i t l e
processing.
4. The Division e s t a b l i s h v i a b l e work standards f o r a l l a p p l i c a b l e t i t l e
processing a c t i v i t i e s and use the standards t o c o n t r o l i n p u t , output
and production of employees s i m i l a r t o t h a t being developed and
planned for Pima operations.
5. The L e g i s l a t u r e amend A. R. S. s28- 325. C. t o allow t h e D i v i s i o n t o
e l i m i n a t e t h e d a t e stamping of l i e n instruments and t i t l e a p p l i c a t i o n s .
FINDING I1
THE STATE CAN EAIU AS ?. EJCH AS $ 1,000,000 ANNUALLY BY TRANSFERRING
RESPONSIBILITY TO RECEIVE DEPOSITS AND DISTRIBUTE THE VEHICLE IN- LIEU TAX
FROM THE COUNTY TREASURERS TO THE STATE TREASURER. I N ADDITION, THE MOTOR
VEHICLE DIVISION HAS NOT ADEQUATELY CONTROLLED THE TIMELY COLLECTION OF
VEHICLE LICENSE TAXES AND FEES FROM THE COUNTY ASSESSORS, RESULTING I N
POTENTIAL LOST INTEREST EARNINGS OF $ 344,000.
Current procedures f o r t h e c o l l e c t i o n of v e h i c l e r e g i s t r a t i o n f e e s and
taxes r e s u l t i n s i g n i f i c a n t l o s t i n t e r e s t earnings t o t h e S t a t e . If the
vehicle l i c e n s e t a x ( i n l i e u tax) c o l l e c t e d a t the time of v e h i c l e
r e g i s t r a t i o n were required t o be immediately t r a n s f e r r e d from the counties
t o the S t a t e , a s a r e other vehicle r e g i s t r a t i o n f e e s , t h e S t a t e could earn
a s much a s $ 1,000,000 annually i n i n t e r e s t . I n a d d i t i o n , i f the Motor
Vehicle Division ( MVD) implemented c o n t r o l s t o assure t h e t i m e l y
c o l l e c t i o n of vehicle f e e s and taxes from the counties a s required by
s t a t u t e , an a d d i t i o n a l $ 344,000 i n annual i n t e r e s t earnings would be
generated.
Statutory Requirements Regarding
Submitting Vehicle License Taxes
and T i t l e and R e g i s t r a t i o n Fees
The assessor of each county is designated by s t a t u t e as an agent of the
Motor Vehicle Division to r e g i s t e r and t i t l e motor vehicles." As agents
for t h e Division the counties c o l l e c t two d i s t i n c t types of revenues:
1) the i n l i e u vehicle l i c e n s e tax and 2 ) t h e t i t l e , r e g i s t r a t i o n , weight
and r e l a t e d motor vehicle f e e s . The v e h i c l e l i c e n s e tax is imposed by the
S t a t e c o n s t i t u t i o n . A. R. S. 928- 1591 provides f o r the l i c e n s e tax t o be
* These d u t i e s and r e s p o n s i b i l i t i e s may be t r a n s f e r r e d - by the county t o
the Division through a contract between the two e n t i t i e s . To date two
counties, Apache and Pima, have contracted t o t r a n s f e r t i t l e and
r e g i s t r a t i o n r e s p o n s i b i l i t i e s t o the Division. Three other c o u n t i e s ,
Coconino, ! lohave and Yavapai, a r e considering c o n t r a c t i n g f o r the
t r a n s f e r of t i t l e and r e g i s t r a t i o n d u t i e s t o the Division.
c o l l e c t e d annually a t the time of vehicle r e g i s t r a t i o n . The r e g i s t e r i n g
o f f i c e r is required t o deposit the l i c e n s e tax promptly with the county
t r e a s u r e r of the county i n which t h e v e h i c l e is r e g i s t e r e d . The county
t r e a s u r e r is then required t o d i s t r i b u t e the l i c e n s e t a x by the 15th day
of the following month. In excess of $ 82 m i l l i o n i n l i c e n s e taxes was
c o l l e c t e d during f i s c a l year 1980- 81.
The motor vehicle f e e s , on the other hand, a r e required by s t a t u t e t o be
t r a n s f e r r e d immediately to the Motor Vehicle Division a f t e r being
c o l l e c t e d by the county a s s e s s o r . A. R. S. $ 28- 301, subsection D s t a t e s :
" A l l monies received from f e e s and taxes imposed by
t h i s a r t i c l e and a r t i c l e 1 of c h a p t e r 2 of t h i s t i t l e ... s h a l l be immediately t r a n s f e r r e d by the c o l l e c t i n g
o f f i c e r t o the ( ADOT) d i r e c t o r , and by him t o the s t a t e
t r e a s u r e r , who s h a l l c r e d i t the monies t o the Arizona
highway user revenue fund. " ( emphasis added)
In excess of $ 23 m i l l i o n was c o l l e c t e d i n these types of f e e s f o r f i s c a l
year 1980- 81.
The R e s p o n s i b i l i t y of D i s t r i b u t i n g Receipts from
the Vehicle License Tax Can Be Transferred t o the
S t a t e Treasurer t o Provide a s Much a s $ 1,000,000 Annually
i n I n t e r e s t Income to the S t a t e
Current c o l l e c t i o n procedures f o r the vehicle l i c e n s e t a x r e s u l t i n l o s t
i n t e r e s t earnings to the S t a t e because 1 ) according t o s t a t u t e the
counties a r e not required t o submit the taxes u n t i l the 15th day of the
month following c o l l e c t i o n and 2) a s i g n i f i c a n t number of the counties
delay submission of the taxes beyond the 15th of the month. I f the
l i c e n s e tax were deposited with t h e S t a t e Treasurer and t h a t o f f i c e given
r e s p o n s i b i l i t y t o d i s t r i b u t e the l i c e n s e tax i n s t e a d of the county
t r e a s u r e r s , the S t a t e could earn a s much as $ 1,000,000 i n i n t e r e s t income
during f i s c a l year 1982- 83. As shown i n Table 7, the county has a d i r e c t
i n t e r e s t i n 17.125 percent of t o t a l l i c e n s e tax. kn a d d i t i o n a l 3.425
percent of t o t a l l i c e n s e t a x is used t o defray t h e c o s t of c o l l e c t i n g the
tax by the county assessors o f f i c e . In c o n t r a s t , t h e S t a t e has a d i r e c t
i n t e r e s t i n 62.325 percent of t o t a l l i c e n s e t a x c o l l e c t e d .
TAELE 7
PERCENT OF LICENSE TAX DISTRIBUTION
TO EACH PARTY ENTITLED TO A DISTRIBUTION
PER A. R. S. $ 28- 1591, SUBSECTION C
To Highway User Revenue Fund ( HURF)
Remaining :
20% t o S t a t e General Fund
25% t o S t a t e General Fund t o aid
i n school a s s i s t a n c e
TOTAL TO STATE
25% t o County General Fund
25% t o Incorporated C i t i e s and Towns
5% t o County Assessor Special Fund
TOTAL DISTRIBUTION
Percent of
Total
S u b s t a n t i a l i n t e r e s t could be earned on the S t a t e ' s share of t h e l i c e n s e
tax. The average d a i l y c o l l e c t i o n of l i c e n s e taxes was $ 328,124 during
f i s c a l year 1980- 81 and is projected t o be a s high as $ 428,700 i n f i s c a l
year 1982- 83. The i n t e r e s t earned on t h i s amount could be s u b s t a n t i a l
because c o l l e c t i o n s on the 1st day of a month would accrue i n t e r e s t f o r 45
days, the 2nd- day c o l l e c t i o n s would accrue i n t e r e s t f o r 44 days and so
f o r t h u n t i l the tax is d i s t r i b u t e d on the 15th day of each month following
the month of c o l l e c t i o n . We estimate the t o t a l amount of i n t e r e s t t h a t
could be earned by the S t a t e i n t h i s manner t o be $ 1,000,000 f o r f i s c a l
year 1982- 83.
I f t h e S t a t e does not d e s i r e t o c o l l e c t and d i s t r i b u t e 100 percent of the
l i c e n s e tax, two other a l t e r n a t i v e s a r e possible. F i r s t , $ 225,000 i n
i n t e r e s t could be earned i f a l l counties deposited the 31.5 percent
designated f o r HURF on a d a i l y basis. Although i t is not c u r r e n t l y
required, most counties submit the 31.5 percent of the l i c e n s e tax f o r
HURF t o MVD a t the time t i t l e and r e g i s t r a t i o n f e e s a r e submitted. Only
Maricopa and Pinal Counties r e t a i n the 31.5 percent f o r d i s t r i b u t i o n to
IIURF on t h e 1 5 t h day of the month following the month of c o l l e c t i o n .
However, Maricopa c o l l e c t s approximately 60.5 percent of a l l vehicle
l i c e n s e t a x c o l l e c t e d i n t h e S t a t e , thus the r e t e n t i o n of these funds by
Maricopa has a s i g n i f i c a n t impact on i n t e r e s t earnings.
Second, $ 573,000 i n i n t e r e s t could be earned i f a l l of the 62.3 percent
vehicle l i c e n s e tax monies due the S t a t e were deposited d a i l y and the
counties r e t a i n e d v e h i c l e l i c e n s e t a x monies due t o the counties' General
Funds, incorporated c i t i e s and towns and county a s s e s s o r s ' s p e c i a l funds.
Table 8 shows each a l t e r n a t i v e and the amounts of i n t e r e s t t h a t could be
earned.
TABLE 8
POTENTIAL INTEREST EARNINGS ON IMMEDIATE
DEPOSIT OF VEHICLE LICENSE TAX TO STATE RATHER THAN TO COUNTIES
Possible I n t e r e s t
Earninzs
Alternate 1:
Immediate deposit of 100% of v e h i c l e l i c e n s e
tax t o S t a t e Treasurer t o be d i s t r i b u t e d
on the 15th of each month $ 1,000,000
Alternate 2:
Immediate deposit of 31.5% of vehicle l i c e n s e
tax due HURF $ 225,000
Alternate 3:
Immediate deposit of a11 of the 62.3%
of vehicle l i c e n s e tax due t o S t a t e
In order f o r the S t a t e Treasurer t o receive the l i c e n s e tax from the
r e g i s t e r i n g o f f i c e r and to make the d i s t r i b u t i o n on t h e 1 5 t h of the month,
A. R. S. $ 28- 1591 would have to be amended. This change i n procedure
appears possible as A r t i c l e 9, Section 11 of t h e S t a t e C o n s t i t u t i o n s t a t e s :
" Such l i c e n s e t a x s h a l l be c o l l e c t e d a s provided by l a w . "
The S t a t e Treasurer is i n favor of having a l l vehicle l i c e n s e taxes
deposited with the S t a t e because s u b s t a n t i a l i n t e r e s t income could be
r e a l i z e d . tie e s t i m a t e s a n e x t r a c l e r k would be required t o process and
d i s t r i b u t e t h e v e h i c l e l i c e n s e tax income a t an i n c r e a s e i n personnel
c o s t s of about $ 12,000 annually. This cost is minor when compared t o the
benefit i n p o t e n t i a l i n t e r e s t earnings.
F i n a l l y , even nore i n t e r e s t earnings than explained previously could be
made i f a l l or part of the l i c e n s e t a x was deposited immediately t o the
S t a t e because the counties a r e o f t e n late making the d i s t r i b u t i o n s . Our
review found t h a t the l i c e n s e tax is not always d i s t r i b u t e d by each county
by t h e 1 5 t h day of each month a s required by s t a t u t e . We reviewed a
recent nine- month period and found t h a t counties were l a t e i n making
l i c e n s e t a x d i s t r i b u t i o n s t o the S t a t e 43 percent of the time. Some
counties were c o n s i s t e n t l y l a t e i n making t h e d i s t r i b u t i o n while only
t h r e e c o u n t i e s , Gila, Maricopa and Pima, were not l a t e during the nine
months reviewed. A system requiring d a i l y deposits would force prompt
remittance of t h e l i c e n s e tax monies.
Counties Are Not Submitting Fees i n a Timely
Planner Resulting i n Lost I n t e r e s t Earnings t o S t a t e
The Motor Vehicle Division, which receives the t i t l e and r e g i s t r a t i o n f e e s
from the c o u n t i e s , has no c e n t r a l c o n t r o l t o assure t h a t monies are
submitted by counties i n a timely manner a s required by A. R. S. $ 28- 301. D.
Although t h i s Section requires each county a s s e s s o r t o immediately
t r a n s f e r t i t l e , r e g i s t r a t i o n and r e l a t e d f e e s t o PIVD, counties a r e not
submitting these monies t o the Division i n a timely manner r e s u l t i n g i n
l o s t i n t e r e s t earnings t o the S t a t e i n excess of $ 300,000 annually.
Our Office reviewed the t r a n f e r of a l l monies received from each county
f o r each day of c o l l e c t i o n s d u r i n g t h e three- month period of January
through Plarch 1982. We found t h a t monies were not being t r a n s f e r r e d
immediately to t h e D i v i s i o n a s required by s t a t u t e . The average delay i n
submitting a day's r e c e i p t s t o the Division ranged from 4.5 days t o 34.6
days depending upon the county. The average delay f o r a l l counties during
the three- month period was found t o be 14.1 days from the day of r e c e i p t
by the county. Further a n a l y s i s by county showed t h a t t h e s e d e l a y s
r e s u l t e d i n l o s t i n t e r e s t earnings t o the S t a t e of $ 86,000 during the
t h r e e months. I f t h i s same p a t t e r n of untimely t r a n s f e r s continued f o r a
year, approximately $ 344,000 i n i n t e r e s t earnings could be l o s t .
We contacted s e v e r a l of the counties t o determine why t r a n s f e r s were not
made more timely. Most counties blamed s t a f f resources f o r the delays.
It should be noted, however, t h a t the t i t l e and r e g i s t r a t i o n computer
system used by a l l county a s s e s s o r s includes a f e e accounting system t o
account f o r and t a b u l a t e f e e s received from t i t l e and r e g i s t r a t i o n
f u n c t i o n s . In a d d i t i o n , our l i m i t e d review of county t r a n s m i t t a l s
disclosed one outlying county which had made s e v e r a l t r a n s m i t t a l s t o the
S t a t e on the same day the t r a n s a c t i o n s were entered on the computer,
demonstrating t h a t one- day processing and depositing t o the S t a t e is
p o s s i b l e .
The D i v i s i o n h a s inadequate c o n t r o l procedures t o a s s u r e t h a t county
t r a n s f e r s of t i t l e and r e g i s t r a t i o n f e e s a r e timely. One Division
o f f i c i a l who receives monies from the counties noted t h a t some counties
send f e e s i n d a i l y whereas o t h e r s do it weekly. He assumes t h a t the
counties have been given clearance by someone higher up i n the Division t o
do t h i s . According t o the Division revenue group manager and the
bookkeeper who records t h e t r a n s m i t t a l s , t h e r e a r e no. p o l i c i e s regarding
what c o n s t i t u t e s an e x c e s s i v e d e l a y i n t r a n s f e r s of f e e s . I f the
bookkeeper f e l t a problem e x i s t e d , she would c a l l the county; and i f the
problem could not be resolved, she would n o t i f y the revenue group
manager. The revenue group manager can only remember one occassion i n the
l a s t two and one- half years when he was n o t i f i e d of a problem.
CONCLUSION
By changing deposit requirements and d i s t r i b u t i o n r e s p o n s i b i l i t i e s of the
vehicle l i c e n s e tax from county t r e a s u r e r s t o the S t a t e Treasurer, the
S t a t e could earn a s much a s $ 1,000,000 annually i n i n t e r e s t earnings.
Further, i f the county assessors submitted t i t l e , r e g i s t r a t i o n and r e l a t e d
fees t o MVD i n a timely manner as required by law, a s much a s $ 344,000 i n
a d d i t i o n a l annual i n t e r e s t could be earned.
RECOIP1Eh; DATIOlJS
1. The Legislature amend A. R. S. s28- 1591 t o require:
a. Immediate deposit of a l l vehicle l i c e n s e taxes t o the S t a t e
Treasurer f o r d i s t r i b u t i o n by him, yielding a d d i t i o n a l i n t e r e s t
income to the S t a t e of approximately $ 1,000,000 annually o r
b. Immediate deposit of the portion of the vehicle l i c e n s e t a x t h a t
represents S t a t e funds ( 62.3 percent of t o t a l t a x ) , yielding
a d d i t i o n a l i n t e r e s t income t o the S t a t e of approximately $ 573,600
or
c. A l l counties t o immediately deposit the 31.5 percent of the
vehicle l i c e n s e tax due t o Highway User Revenue Fund, yielding
a d d i t i o n a l i n t e r e s t income t o t h e S t a t e of approximately $ 225,000.
2. The Motor Vehicle Division of the Arizona Department of Transportation
closely monitor the t r a n s f e r s of t i t l e and r e g i s t r a t i o n f e e s by
counties and take s t e p s to assure t h a t counties a r e i n compliance with
A. k. S. $ 28- 301. D. by depositing f e e s i n a timely manner so as not t o
l o s e p o t e n t i a l i n t e r e s t earnings.
FINOING I11
MVD HAS NOT REQUIRED THE COLLECTION OF PRIOR- YEAR VEHICLE LICENSE TAXES I N
ACCORDANCE WITH STATUTE mSULTING I N REVENUE LOSSES OF BETWEEN $ 102,000 -
$ 312,000 ANNUALLY. I N ADDITION, FWD HAS NOT ENFORCED THE COLLECTION OF
PENALTIES RESULTING I N ADDITIONAL LOST REVENUE.
The Motor Vehicle Division and the County Assessors a c t i n g a s agents f o r
PlVD do not c o l l e c t unpaid v e h i c l e l i c e n s e taxes due f o r p r i o r r e g i s t r a t i o n
periods. Arizona Revised S t a t u t e s requires t h a t these p r i o r taxes be
c o l l e c t e d . F a i l u r e to c o l l e c t the taxes r e s u l t s i n l o s t revenue t o the
S t a t e of between $ 102,000 t o $ 312,000 annually. In a d d i t i o n , MVD and the
counties have i n c o n s i s t e n t procedures f o r c o l l e c t i o n of p e n a l t i e s on these
l a t e r e g i s t r a t i o n s causing f u r t h e r revenue l o s s .
R e g i s t r a t i o n renewals a r e s e n t annually t o vehicle owners." Vehicle
owners then pay the vehicle l i c e n s e taxes required f o r r e g i s t r a t i o n
renewal t o t h e i r county auto l i c e n s e o f f i c e s . I f a person f a i l s t o renew
h i s r e g i s t r a t i o n during one renewal cycle and l a t e r seeks c u r r e n t
r e g i s t r a t i o n , PND and t h e c o u n t i e s renew the r e g i s t r a t i o n but do not
r e q u i r e t h e person to pay the taxes f o r the previous periods. I n
a d d i t i o n , t h i s i n d i v i d u a l may or may not be charged a penalty, depending
upon the county.
S t a t u t e s Require FiVD and County
Assessors to Collect P r i o r Taxes Due
PlVD and County Assessors should, by s t a t u t e , c o l l e c t previous- year taxes
f o r delinquent r e g i s t r a t i o n s . Noncollection of t h e s e t a x e s causes revenue
l o s s e s of a t l e a s t $ 102,000 annually. These l o s s e s occur because MVD has
not implemented c o n t r o l s t o ensure the taxes a r e properly c o l l e c t e d .
* The Pima and Apache Counties auto l i c e n s e o f f i c e s a r e under MVD
control whereas a l l other county auto l i c e n s e o f f i c e s are under
:,~~ D/ CountyA ssessor c o n t r o l . Renewals f o r Pima and Apache a r e sent
out by MVD, while county a s s e s s o r s send t h e i r c o u n t i e s ' renewals.
A. R. S. s1591. A. requires the vehicle l i c e n s e t a x t o be c o l l e c t e d at the
time of a p p l i c a t i o n f o r r e g i s t r a t i o n of a vehicle. A. R. S. $ 28- 305.~. and
28- 314. C. s t a t e t h a t a vehicle may not be r e g i s t e r e d u n t i l a l l current and
delinquent f e e s , taxes, p e n a l t i e s and assessments a r e paid. S p e c i f i c a l l y ,
the s e c t i o n s s t a t e :
A. R. S. $ 28- 1591
" A. The l i c e n s e tax imposed by a r t i c l e I X , s11 of the
C o n s t i t u t i o n of Arizona s h a l l be c o l l e c t e d by the
r e g i s t e r i n g o f f i c e r at the time of a p p l i c a t i o n f o r and
before r e g i s t r a t i o n of the v e h i c l e each year and be
promptly deposited with the county t r e a s u r e r of the
county i n which the vehicle is registered."
A. R. S $ 28- 305
" E. The d i r e c t o r s h a l l deny r e g i s t r a t i o n of any motor
vehicle, t r a i l e r or s e m i t r a i l e r owned by or under
c o n t r o l of a person who has f a i l e d , refused or
neglected t o pay any motor v e h i c l e f e e , t a x , o r o t h e r
assessment or penalty due t o the d i v i s i o n or f o r i t s
account. A r e g i s t r a t i o n so denied s h a l l be renewed
only upon paying the f e e s provided f o r r e g i s t r a t i o n and
the f u l l amount of the delinquent f e e s , taxes or other
assessments and p e n a l t i e s . " ( emphasis added)
A. R. S. s28- 314
" C. The d i r e c t o r subject t o the provisions of
s28- 1591, subsection By s h a l l refuse t o r e g i s t e r a
motor v e h i c l e , t r a i l e r or s e m i t r a i l e r owned by or under
the c o n t r o l of a person who has f a i l e d , refused or
neglected t o pay a motor v e h i c l e f e e , t a x or other
assessment, or a penalty thereon, due the v e h i c l e
d i v i s i o n o r f o r its account, and s h a l l revoke the
r e g i s t r a t i o n of any motor v e h i c l e , t r a i l e r or
s e m i t r a i l e r owned by or under the c o n t r o l of any person
who has been delinquent f o r a period of f o r t y - f i v e days
i n the payment of a motor v e h i c l e fee, tax or other
assessment due the vehicle d i v i s i o n o r f o r its
account. The r e g i s t r a t i o n of a motor v e h i c l e , t r a i l e r
o r s e m i t r a i l e r so revoked s h a l l be renewed f o r the
owner who f a i l e d , refused or neglected t o pay a motor
vehicle f e e , tax or other assessment or penalty thereon
only upon payment of the f e e s described f o r
r e g i s t r a t i o n and the f u l l amount of the delinquent
f e e s , taxes or other assessments and p e n a l t i e s . "
( emphasis added)
The L e g i s l a t i v e Council has concluded t h a t MVD and counties should c o l l e c t
the VLT f o r a p r i o r year when it is determined t h a t the vehicle was
subject t o r e g i s t r a t i o n . In a May 21, 1982, memorandum, L e g i s l a t i v e
Council concluded t h a t
". . . the l i c e n s e tax may be c o l l e c t e d r e t r o a c t i v e l y
f o r any period of n o n r e g i s t r a t i o n i f the current owner
of t h e v e h i c l e was the owner during the n o n r e g i s t r a t i o n
period."
Loss of Revenue
Through an analysis of MVD computer information, we determined t h a t
noncollection of prior- year vehicle l i c e n s e taxes f o r expired v e h i c l e
r e g i s t r a t i o n s causes the S t a t e t o l o s e at l e a s t $ 102,000 annually.
Further, we e s t i m a t e t h e l o s s e s could a c t u a l l y be a s high as $ 312,000 per
year. A more a c c u r a t e e s t i m a t i o n of l o s t taxes could not be made because
( 1) vehicles which were not r e g i s t e r e d f o r a period of more than one year,
but should have been r e g i s t e r e d , cannot be r e a d i l y i d e n t i f i e d using IIVD
records and ( 2) MVD and the counties a r e i n c o n s i s t e n t i n c o l l e c t i o n of
p e n a l t i e s f o r l a t e r e g i s t r a t i o n s .
Reasons f o r Noncollection
of Past Vehicle License Taxes
MVD has not implemented c o n t r o l s t o assure t h a t counties properly c o l l e c t
the vehicle l i c e n s e taxes f o r p r i o r years. According t o an MVD o f f i c i a l ,
the c o l l e c t i o n of t h e v e h i c l e l i c e n s e taxes has been considered t o be a
county r e s p o n s i b i l i t y , and it has been l e f t up t o the counties t o decide
whether or not t o c o l l e c t p r i o r taxes. The o f f i c i a l added t h a t since
FIVD's takeover of the Pima and Apache Counties' a u t o l i c e n s e o f f i c e s , MVD
must now determine whether or not t o require c o l l e c t i o n of p r i o r taxes at
these o f f i c e s .
The Office of the Auditor General surveyed a l l 14 county a u t o l i c e n s e
o f f i c e s t o determine the reasons t h e c o u n t i e s were not complying with
s t a t u t e s r e q u i r i n g the c o l l e c t i o n of p r i o r vehicle l i c e n s e s taxes. That
t h e c o u n t i e s had not been properly informed a s t o t h e requirements f o r the
c o l l e c t i o n of the taxes was apparent from the survey responses:
TABLE 9
SURVEY RESPONSES FOR NONCOLLECTION OF
PAST VEHICLE LICENSE TAXES
Survey Response
1. The assessor said not t o c o l l e c t p r i o r -
y e a r t a x e s
Number of Counties
Responding
2. County policy 1
3. Taxes f o r a period g r e a t e r t h a n 1 2 months
cannot be input on the computer
4. It's always been done t h i s way 3
5. Do not know reason 2
6. The v e h i c l e is assumed t o have not
been used
7. 1. IVD r e g u l a t i o n 1
8. Taxes cannot be c o l l e c t e d f o r an
expired cycle
Total
Penaltv Collection
MVD has not enforced t h e c o n s i s t e n t c o l l e c t i o n of p e n a l t i e s f o r unpaid
prior- year r e g i s t r a t i o n s r e s u l t i n g i n noncompliance with s t a t u t e s and l o s s
of S t a t e revenues. I n a d d i t i o n , MVD has not supplied counties with
adequate procedures to follow f o r c o l l e c t i o n of p e n a l t i e s on unpaid
prior- year r e g i s t r a t i o n s .
S t a t u t e s Require t h e C o l l e c t i o n of
P e n a l t i e s f o r Unpaid Prior- year R e g i s t r a t i o n s
tlVD and the counties, by s t a t u t e , should c o l l e c t p e n a l t i e s f o r unpaid
prior- year r e g i s t r a t i o n s . A. R. S. $ 28- 305. E. and $ 28- 314. C. ( as shown on
page 38) both r e q u i r e the c o l l e c t i o n of p e n a l t i e s before a v e h i c l e may be
c u r r e n t l y r e g i s t e r e d . In a d d i t i o n , A. R. S. $ 28- 318 s t a t e s t h a t i f a
vehicle is operated on the highway without payment of r e g i s t r a t i o n , the
f e e is delinquent and a penalty s h a l l be added and c o l l e c t e d . The s t a t u t e
s p e c i f i e s t h a t
" A. When a vehicle is operated upon a highway without payment of the
r e g i s t r a t i o n or t r a n s f e r f e e , t h e f e e s h a l l be deemed delinquent, and
i f not paid on o r p r i o r t o t h e d a t e on which t h e v e h i c l e is required
to be r e g i s t e r e d f o r t h e c u r r e n t r e g i s t r a t i o n year, a penalty s h a l l be
added and c o l l e c t e d . The penalty is e i g h t d o l l a r s f o r t h e f i r s t month
of delinquency and four d o l l a r s f o r each a d d i t i o n a l month, not t o
exceed a t o t a l penalty of one hundred d o l l a r s . R e g i s t r a t i o n of a
vehicle i n the name of the a p p l i c a n t f o r the year immediately
preceding the year f o r which a p p l i c a t i o n f o r r e g i s t r a t i o n is made
s h a l l be prima f a c i e evidence t h a t t h e v e h i c l e has been operated on
the highways during the year f o r which a p p l i c a t i o n f o r r e g i s t r a t i o n is
made. "
I n c o n s i s t e n c i e s
All counties do not a s s e s s a penalty f o r v e h i c l e s which were not
r e g i s t e r e d i n a p r i o r period, and those t h a t do may waive t h e penalty. Of
the f o u r t e e n c o u n t i e s , six do not a s s e s s a penalty f o r prior- year unpaid
r e g i s t r a t i o n s while e i g h t do a s s e s s a penalty. However, the e i g h t
counties which do a s s e s s a penalty may waive the penalty i f owners f i l e
nonuse a f f i d a v i t s . ( A nonuse a f f i d a v i t is intended t o waive p e n a l t i e s f o r
vehicle owners who did not use t h e i r v e h i c l e s during a period of
n o n r e g i s t r a t i o n ) . Depending upon the county, proof of nonuse f o r
noncommercial vehicles may or may not be r e q u i r e d , t h u s , providing the
p o s s i b i l i t y f o r misuse of the a f f i d a v i t .
Reasons f o r Inconsistencies
ElVD has s t a t e d t h a t it can only provide the c o u n t i e s w i t h g u i d e l i n e s , it
cannot force compliance. While t h i s may be t r u e , we b e l i e v e t h a t thus f a r
tND has f a i l e d to provide c o u n t i e s with adequate w r i t t e n procedures for
c o l l e c t i o n of prior- period p e n a l t i e s o r s p e c i f i c g u i d e l i n e s governing
nonuse a f f i d a v i t s . Although KVD did provide the counties w i t h g e n e r a l
g u i d e l i n e s i n September 1981, t h e s e g u i d e l i n e s were e s s e n t i a l l y a brief •
restatement of l e g i s l a t i v e requirements. S p e c i f i c g u i d e l i n e s addressing
the implementation of the requirements were n o t given. As a r e s u l t , each
county has apparently developed its own i n t e r p r e t a t i o n of the s t a t u t o r y
requirements. Further, i n some cases, t h e c o u n t i e s not c o l l e c t i n g
p e n a l t i e s on past r e g i s t r a t i o n periods a r e p r a c t i c i n g procedures which
should have been changed t o f i t new l e g i s l a t i o n .
The amount of revenue l o s t by not c o l l e c t i n g these p e n a l t i e s was not Q
determined because there was no r e a d i l y a v a i l a b l e d a t a on how many
p e n a l t i e s a r e automatically waived by the six counties nor on the number
of l e g a l l y signed nonuse a f f i d a v i t s .
PlVD has not required t h e c o l l e c t i o n of prior- year vehicle l i c e n s e taxes i n
accordance with s t a t u t e s , r e s u l t i n g i n revenue l o s s e s of between $ 102,000
and $ 312,000 annually. In a d d i t i o n , MVD h a s n o t implemented c o n t r o l s t o
a s s u r e t h a t counties properly c o l l e c t the v e h i c l e l i c e n s e tax.
11VL) has n o t provided c o u n t i e s w i t h adequate procedures f o r the c o l l e c t i o n
of p e n a l t i e s on prior- year r e g i s t r a t i o n s , causing i n c o n s i s t e n t c o l l e c t i o n e
p r a c t i c e s among counties. The counties and MVD should uniformly c o l l e c t
t h e s e p e n a l t i e s a s required by s t a t u t e to prevent revenue l o s s .
1. PIVD implement c o n t r o l s and e s t a b l i s h p o l i c i e s and procedures t o ensure
t h a t taxes a r e c o l l e c t e d from vehicle owners who have skipped a
r e g i s t r a t i o n cycle.
0
2. ? IVD implement c o n t r o l s and e s t a b l i s h p o l i c i e s and procedures t o ensure
the c o l l e c t i o n of p e n a l t i e s frorn vehicle owners who have skipped a
r e b i s t r a t i o n cycle.
FINDING I V
TIiE DEPAKTfiENT HAS FAILED TO ADEOUATELY PLAI'?. MANAGE AND SUPPORT COMPUTER
- --
SYSTEflS DEVELOPMENT FOR A MAJOR MVD COMPUTER SYSTEM FOR TITLE AND
REGISTRATION PROCESSING.
Neither the Motor Vehicle Division ( MVD) nor the Information Systems Group
( ISG) of ADOT has adequately managed computer resources t o develop and
implement the T i t l e and R e g i s t r a t i o n ( T & R) computer processing system.
Agency management has f a i l e d t o provide front- end planning and has not
exercised adequate p r o j e c t c o n t r o l of systems development resources. As a
r e s u l t , the implementation date has been repeatedly delayed and management
is unable t o determine 1) the number of man- hours and cost expended i n
development nor 2) whether development resources a r e being e f f i c i e n t l y
u t i l i z e d . Noncompletion of the t i t l e and r e g i s t r a t i o n system has impaired
the e f f e c t i v e n e s s and e f f i c i e n c y of processing, and p o t e n t i a l c o s t savings
from automation have been l o s t . The agency, a s of June 30, 1982, had not
f u l l y developed nor implemented the system, although it was o r i g i n a l l y
planned i n 1968 and p a r t i a l l y implemented i n 1971. We a r e unable t o
s u b s t a n t i a t e agency reasons f o r the noncompletion.
The purpose f o r developing the T & R computer system was t o automate t i t l e
and r e g i s t r a t i o n information processing. The T & R system when f u l l y
implemented would provide f i v e c a p a b i l i t i e s not e x i s t i n g i n 1968. These
c a p a b i l i t i e s are: 1 ) terminal inquiry of r e g i s t r a t i o n d a t a i n computer
f i l e s , 2) terminal input of r e g i s t r a t i o n data i n t o computer f i l e s ,
3) t e r m i n a l i n p u t of t i t l e data i n t o computer f i l e s , 4) terminal inquiry
of t i t l e data i n computer f i l e s , and 5) terminal output of t i t l e
documents. Implementation of the T & R system would eliminate two manual
r e g i s t r a t i o n f i l e s and the manual t i t l e master f i l e . It would a l s o
provide f o r development of a computer- generated t i t l e a p p l i c a t i o n .
However, only the f i r s t two c a p a b i l i t i e s of the system have yet been
developed and implemented. Terminal inquiry of r e g i s t r a t i o n data i n
computer f i l e s was implemented i n September 1971. Terminal input of a
r e g i s t r a t i o n data i n t o computer f i l e s was implemented i n 1973. T i t l e -
r e l a t e d computer c a p a b i l i t i e s , except f o r computer- generated t i t l e
documents, a r e c u r r e n t l y being developed as part of a complete system
redevelopment s t a r t e d i n January 1980. Division management has decided a
not to proceed with development of computer- generated t i t l e documents and
wishes t o r e t a i n t h e c u r r e n t photographic method of producing t i t l e
documents.
Lack of Planning and Project Control
Management has exercised i n s u f f i c i e n t planning and p r o j e c t c o n t r o l over
both the o r i g i n a l development and the recent redevelopment of the T & B
system. Management has not projected or tracked c o s t s and hours ( I
associated with the development of the system. Consequently, management
is unable t o determine whether development resources a r e being e f f i c i e n t l y
u t i l i z e d . I n a d d i t i o n , t h e lack of project c o n t r o l may have contributed
t o the repeated delays i n the implementation of the system which was a
o r i g i n a l l y begun i n 1968.
ISG could not provide u s w i t h information regarding the estimates and
schedules f o r the o r i g i n a l development of the T & R computer system nor a
the a c t u a l manhours and c o s t s expended on the p r o j e c t from 1968 t o 1979.
Accordink t o t h e ISG manager, records no longer e x i s t t o provide t h i s
information.
Since 1979, ISG has been redeveloping the T & R system. Hours t o complete
the redesign were estimated by the T & R system redevelopment study team.
According to the study team report issued December 1, 1979, the
redevelopment of the T & R system would require l e s s than 6,640 man- hours 0
or approximately 18.5 months t o complete. Work on the redevelopment was
s t a r t e d i n January 1980.
Although the redevelopment is not y e t completed, our c a l c u l a t i o n s i n d i c a t e
t h a t a s of May 31, 1982, the redevelopment p r o j e c t was overbudget by more
than t h r e e times the o r i g i n a l estimate of 6,640 man- hours. Management was
unable to provide u s w i t h a c t u a l hours expended, n e c e s s i t a t i n g our
determination of these hours ourselves.
ISG c u r r e n t l y estimates the redeveloped system w i l l be completed by
October 31, 1982, or 34 months from the redevelopment s t a r t date. Based
upon the October 31, 1982, completion d a t e , we p r o j e c t t h a t p r i o r t o
completion, the redevelopment w i l l be more than f o u r times over the hours
budgeted by the study team. Table 10 i l l u s t r a t e s the number of hours and
r e l a t e d personnel c o s t s f o r t h e p r o j e c t based upon the study team budget
and our projections.
TABLE 10
ESTIMATED MAN- HOURS AND COSTS OVERBUDGET FOR
COMPLETION OF T & R REDEVELOPMENT
Development
Plan- hour s Costs
Redevelopment study team estimate 6,640 $ 127,900
Auditor General projected estimate 25,822 497,400
Overbudget hours and cost ( 19.182) $ mnm)
Management has not been a b l e t o c o n t r o l t h e hours expended on the
development of the system due t o inadequate p r o j e c t monitoring t o o l s . The
only cost tracking method a v a i l a b l e is the ADOT computer c o s t accounting
system. The purpose of t h e c o s t accounting system is t o provide user
b i l l i n g s f o r computer s e r v i c e s and it does n o t provide adequate
information f o r p r o j e c t c o n t r o l . For p r o j e c t c o n t r o l purposes, management
needs information regarding 1 ) the estimated hours and c o s t s of p r o j e c t
development, 2) a c t u a l hours and c o s t s expended f o r a c u r r e n t period and
to- date t o t a l s , and 3) the d i f f e r e n c e s between budget and a c t u a l hours
and c o s t s . The ADOT computer c o s t accounting system cannot be used f o r
t h i s purpose without modification. F i r s t , it does not accumulate c o s t s by
p r o j e c t codes. Second, it does not accumulate annual o r l i f e cycle c o s t s
but only shows c o s t s f o r one month. F i n a l l y , it does not compare budget
to a c t u a l c o s t s . ISG's i n a b i l i t y t o provide our O f f i c e w i t h a c t u a l c o s t s
expended on the redevelopment a s of May 31, 1982, is i l l u s t r a t i v e of the
abency' s f a i l u r e t o adequately monitor the p r o j e c t by tracking systems
development c o s t s .
It was not within our scope t o determine i f other ISG development p r o j e c t s
were properly planned and monitored. Other p r o j e c t s may l a c k proper
monitoring during a c t u a l development. However, according t o the ISG
manager, a l l p r o j e c t s a r e c u r r e n t l y i n i t i a t e d through a p r o j e c t request
form which includes an estimate of time and c o s t s t o develop the proposed
system. The u s e r i n d i c a t e s t h e time frame i n which t h e c a p a b i l i t y is
wanted, and i f the request seems f e a s i b l e , it is approved by ISG f o r
p r o j e c t i n i t i a t i o n . The p r o j e c t request procedures a r e only used a s a
b a s i s f o r determining the f e a s i b i l i t y of t h e p r o j e c t . Actual c o s t s a r e
not monitored and compared with estimated c o s t s f o r p r o j e c t c o n t r o l
purposes. Although a p r o j e c t request form was completed f o r the T & R
redevelopment e a r l y i n 1981, more than one year a f t e r t h e p r o j e c t redesign
was begun, development c o s t s were not included.
Processing Impaired and Cost Savings Lost
Noncompletion of the T & R computer processing system has impaired the a
e f f e c t i v e n e s s and e f f i c i e n c y of t i t l e processing, and p o t e n t i a l cost
savings through automation have been l o s t . The c u r r e n t manual t i t l e
processing and f i l i n g system has s e v e r a l shortcomings which can be
overcome by a f u l l y automated system. We e s t i m a t e t h e Division could have
saved a t l e a s t $ 423,830 i n f i s c a l year 1981- 82 had the automated t i t l e
c a p a b i l i t i e s been implemented before then. It appears t h a t the
development c o s t s f o r t i t l e c a p a b i l i t i e s a r e out- weighed by r e s u l t a n t cost
savings. Because t i t l e records and processing a r e handled manually,
several shortcomings a r e apparent. These shortcomings a r e summarized
below:
1. The Division must maintain a manual t i t l e f i l e . The manual t i t l e
f i l e is c o s t l y to operate and d u p l i c a t e s some informatiori
c u r r e n t l y on the computer f i l e . L i t t l e inf orrnation would need t o
be added t o the computer t o automate the t i t l e records.
38
2. System users must request t i t l e information from the Division
manual f i l e which r e q u i r e s extensive paper and/ or phone work.
The system is used by the Division, counties and Arizona law
enforcement agencies.
3 . The manual t i t l e f i l e is checked a f t e r t i t l e processing is
complete instead of before processing is s t a r t e d , t h e r e f o r e ,
problem t i t l e s a r e not i d e n t i f i e d u n t i l processing i s complete.
4. Many t i t l e a p p l i c a t i o n s a r e found to be i n c o r r e c t or incomplete
due t o manually entered a p p l i c a t i o n information, but only 15
percent require more than a name, address and possibly a l i e n
change.
Automation of t i t l e records and processing can provide s i g n i f i c a n t
b e n e f i t s over t h e c u r r e n t manual system. These b e n e f i t s a r e summarized
below:
1. Processing t i m e and cost can be reduced.
2. The manual t i t l e f i l e can be eliminated, reducing 18 employee
p o s i t i o n s a t a cost of $ 237,400 annually.
3. Division, county and law enforcement employees can access t i t l e
information d i r e c t l y r a t h e r than requesting information which
must be maintained through manual means.
4. The acceptance of t i t l e a p p l i c a t i o n s w i l l be c o n t r o l l e d a s t i t l e
information can be checked before t i t l e a p p l i c a t i o n s a r e
processed instead of a f t e r .
5. Computer- generated a p p l i c a t i o n s and t i t l e s can be prepared
reducing the amount of t i m e needed t o manually prepare each t i t l e
document a t both the county and Division l e v e l .
S i g n i f i c a n t c o s t b e n e f i t s can be r e a l i z e d by completing automation of
t i t l e records and processing. We estimate t h a t had the t i t l e p a r t of the
T & R system been o p e r a t i o n a l during f i s c a l year 1981- 82, a net savings of
a t l e a s t $ 423,830 could have been r e a l i z e d by the Division.* These
savings a r e summarized i n Table 11 below and do n o t i n c l u d e time savings
and increased production of employees t h a t could be a t t r i b u t e d t o a f u l l y
automated t i t l e and r e g i s t r a t i o n processing system. The t i t l e
c a p a b i l i t i e s were f i r s t planned to be implemented by June 30, 1973,
revised t o June 30, 1975, and revised again t o December 1975. Had the
t i t l e c a p a b i l i t i e s existed at July 1, 1976, the Division could have
enjoyed s i m i l a r savings f o r f i v e a d d i t i o n a l f i s c a l years.
TABLE 11
COST SAVINGS RESULTING FROM
FULLY AUTOMATED TITLE SYSTEM
Elimination of manual t i t l e f i l e $ 237, 400**
Elimination of t i t l e I. D. card production 153,200
Reduction of t i t l e checking requirements 251,700
TOTAL SAVINGS 642,300
Additional terminal operators
Additional terminal equipment
NET SAVINGS
** These f i g u r e s were provided by the Division.
The projected savings could be obtained a f t e r the system is f u l l y
operational. Before t h i s stage is reached and the f u l l projected
savings can be r e a l i z e d , t i t l e information from approximately 3.4
million records must be converted t o automated records. MVD estimates.
a one- time cost of more than one m i l l i o n d o l l a r s t o convert the
records within a one- year period. Such a c o s t , however, would be
recovered within three years through the projected savings.
Noncompletion of T & R System
We were unable to s u b s t a n t i a t e agency reasons f o r noncompletion of the
T & R computer system. The agency has blamed changes i n r e g i s t r a t i o n l a w s
and a lack of resources a s the main reasons f o r not implementing t i t l e
c a p a b i l i t i e s . During the period of 1973 to 1975, the agency s t a t e d it had
been busy revising the r e g i s t r a t i o n part of the system t o conform t o
l e g i s l a t i v e changes.
The main reason f o r t h e d e l a y s appears to be a c o n f l i c t of p r i o r i t i e s a s
evidenced by the development of numerous other major computer systems and
programs f o r the Motor Vehicle Division. According t o the past MVD
a s s i s t a n t d i r e c t o r , the T & R system could have been completed i f ISG had
been w i l l i n g to make the e f f o r t and r e p r i o r i t i z e . He f e l t t h a t PND did
not receive commensurate a t t e n t i o n from ADOT and ISG regarding the T & R
computer system and the delay was due t o p r i o r i t i e s . The MVD systems
manager a l s o s t a t e s p r i o r i t y as the reason f o r noncompletion of t i t l e
c a p a b i l i t i e s .
CONCLUSION
Neither the blotor Vehicle Division ( MVD) nor the Information Systems Group
( ISG) of MOT has adequately managed computer resources to develop and
implement the T i t l e and R e g i s t r a t i o n ( T & R) computer processing system.
Agency management has not exercised e f f e c t i v e planning and p r o j e c t c o n t r o l
of systems development resources. As a r e s u l t , management is unable t o
determine the number of man- hours and d o l l a r s expended i n development nor
whether development resources a r e e f f i c i e n t l y u t i l i z e d . In a d d i t i o n , the
system implementation date has been repeatedly delayed. Noncompletion of
the T & R system has impaired the e f f e c t i v e n e s s and e f f i c i e n c y of t i t l e
processing and s u b s t a n t i a l c o s t savings have been l o s t . The agency, a s of
June 30, 1982, had not f u l l y developed and implemented the system,
although i t was o r i g i n a l l y planned i n 1968 and p a r t i a l l y implemented i n
1971. We a r e unable t o s u b s t a n t i a t e agency reasons f o r the nonconpletion.
1. The department formulate p r o j e c t i n i t i a t i o n and c o n t r o l procedures for
a l l computer development p r o j e c t s i n order t o ( a) s e t development
p r i o r i t i e s and ( b) e f f e c t i v e l y schedule p r o j e c t s .
Such procedures should include:
( a) Estimated man- hours and c o s t t o complete development,
( b) Estimated c o s t b e n e f i t s f o r completing development, and
( c) Accumulation of a c t u a l hours and c o s t s consumed i n development t o
i d e n t i f y d e v i a t i o n s and take c o r r e c t i v e a c t i o n .
2. The Department r e v i s e its c o s t accounting system i n order to
adequately monitor and c o n t r o l development c o s t s and implementation
d a t e s or otherwise provide a system f o r c o s t tracking systems
development.
OTHER PERTINENT II'JFOWATION
Since 1927 county a s s e s s o r s have served a s agents f o r the Motor Vehicle
Division i n performing vehicle t i t l e and r e g i s t r a t i o n functions. I n 1977
the s t a t u t e s were amended t o allow the d i r e c t o r of ACOT and county boards
of supervisors to contract to t r a n s f e r vehicle t i t l e and r e g i s t r a t i o n
functions back t o PIVD. As of July 20, 1982, two counties ( Pima and
Apache) had entered i n t o such c o n t r a c t s . Three other counties ( Coconino,
I~ lohave and Yavapai) a r e c u r r e n t l y considering t h i s a c t i o n .
The county assessors involved provided the following reasons f o r d e s i r i n g
to t r a n s f e r the functions t o MVD:
- A d e s i r e t o e l i m i n a t e d u p l i c a t i o n between the counties and MVD,
- A b e l i e f t h a t vehicle r e g i s t r a t i o n is not t r u l y a function of
the a s s e s s o r ' s o f f i c e , and
- An i n a b i l i t y t o make the function economically self- supporting.
The t r a n s f e r of functions has only r e c e n t l y occurred. Pima County, the
f i r s t county t o e n t e r i n t o a contract to t r a n s f e r f u n c t i o n s , d i d s o on
October 1, 1981. Therefore it is too e a r l y t o e v a l u t e t h e success and
impacts of the t r a n s f e r s . However, our other a u d i t work does show t h a t
a l l t i t l e and r e g i s t r a t i o n functions performed by the counties could be
performed by PlVD. At l e a s t 17 other s t a t e s conduct v e h i c l e t i t l e and
r e g i s t r a t i o n a c t i v i t i e s through a s t a t e agency without county involvement.
AREAS FOR FURTHER AUDIT WORK
Uuring the course of the a u d i t , we i d e n t i f i e d p o t e n t i a l areas f o r f u r t h e r
a u d i t work t h a t we could not pursue due t o time c o n s t r a i n t s . These a r e a s ,
which were outside the scope of our a u d i t ( s e e page 3), include a s follows:
Weight Enforcement
Are MVD overweight enforcement a c t i v i t i e s s u f f i c i e n t t o p r o t e c t
Arizona's highway system against excessive damage from overweight
vehicles?
Are there more productive areas i n which the s t a f f of the smaller p o r t s
of entry could be used and/ or should MVD and the Arizona Commission of
Agriculture and H o r t i c u l t u r e f u n c t i o n s be combined i n these p o r t s of
entry? ( A combining of t h e s e f u n c t i o n s was previously recommended i n
Report 79- 12, A Performance Audit of the Arizona Commission of
Agriculture and H o r t i c u l t u r e , which projected p o t e n t i a l savings of more
than $ 220,000 by combining functions.)
Should c i t a t i o n s be issued on a l l vehicles found t o be overweight
r a t h e r than l e t t i n g some vehicles avoid a c i t a t i o n by reducing or
s h i f t i n g t h e v e h i c l e load?
Tax Collection
Are Field Audit Assessments being c o l l e c t e d by MVD i n a timely manner?
Is the " payment agreement" used by MVD an e f f e c t i v e method of
c o l l e c t i n g past due taxes or tax assessments?
Does > 1VD charge i n t e r e s t on a l l tax assessments a s required by s t a t u t e ?
Can MVD's f u e l tax review procedures be improved and a r e s u b s t a n t i a l
tax assessments l o s t due t o untimely processing?
Should bond amounts be increased t o provide f o r g r e a t e r c o l l e c t i o n of
past due taxes?
Is MVD adequately monitoring " vendor" and " d i s t r i b u t o r " t a x accounts?
Driver Licensing
Can the procedures f o r t r a n s m i t t i n g t r a f f i c convictions t o MVD be
changed to provide more timely information on bad d r i v e r s ?
Is the d r i v e r improvement program e f f e c t i v e and is timely, a p p r o p r i a t e
a c t i o n taken against d r i v e r s with bad d r i v i n g records?
8 Can the d r i v e r improvement processing system be improved t o provide
g r e a t e r handling e f f i c i e n c y a t reduced processing c o s t s ?
Are d r i v e r l i c e n s i n g examiner r e s o u r c e s p r o p e r l y a l l o c a t e d ?
Can the d r i v e r l i c e n s i n g system be improved t o provide b e t t e r service
t o t h e p u b l i c , more timely issuance of l i c e n s e s and reduced c o s t s ?
Other
Is t h e F i n a n c i a l R e s p o n s i b i l i t y f u n c t i o n e f f e c t i v e ?
Can t h e F i n a n c i a l R e s p o n s i b i l i t y processing system be improved to
provide more timely processing?
Can abandoned vehicle processing be improved o r could a l t e r n a t e methods
be employed?
a @, kLg.- -,. ARIZONA DEPARTMENT OF TRANSPORTATION
206 South Seventeenth Avenue Phoenix, Arizona 85007
e HRlJCE ! iABBlTT
Governor October 14, 1982
Wl LLlAM A . ORDWAY
Director
Mr. Douglas R. Norton
Auditor General
State of Arizona
111 West Monroe, Suite 600
Phoenix, Arizona 85003
Dear Nr. Norton,
The Arizona Department of Transportation is submitting the attached
commentsiri regard to the performance audit of the Arizona Department
of Transportation, Motor Vehicle Division, Title and Registration
Processing. Arizona Department of Transportation appreciates the
opportunity t o provide additional comments, and our intent in sub-mitting
these comments is to assist your efforts in completing a
high quality audit. I wish to express my appreciation for the time
your staff provided in giving additional detail and follow- up informa-tion.
As you know, the Arizona Department of Transportation i s striving to
" make i t happen with excellence," and we always welcome suggestions
on how we can improve. The suggestions we've agreed upon as con-tained
in this audit will be acted upon as quickly as possible.
Please do not hesitate to contact me if you have any additional
comments or questions.
Sincerely,
W. A. ORDWAY
Director
kw/ bg
Attachment
HIGHWAYS . AERONAUT~ CS . MOTOR VEHICLE ' PUBLIC TRANSIT ' ADMINISTRATIVE SERVICES ' TRANSPORTATION PLANNING
OVERALL COMMENTS ON AUDITOR GENERAL'S REPORT ON TITLE AND REGISTRATION
DEPARTXENT OF TRANSPORTATION
October 12, 1982
FINDING I
The Motor Vehicle Division can save $ 316,300, eliminate 22 FTE,
and reduce the time required to process t i t l e a p p l i c a t i o n s .
DEPARTMENT OF TRANSPORTATION POSITION: PARTIALLY CONCURS WITH FINDING
The Department of Transportation is i n t h e process of r e a l i z i n g
savings i n excess of $ 350,000 and a reduction of 23 full- time p o s i t i o n s
during f i s c a l year 82/ 83 i n t h e T i t l e Processing area due t o
o r g a n i z a t i o n a l l y planned program changes. ADOT's Motor Vehicle Division
has taken management s t e p s beyond the recommendation on page 5 of the
report t o eliminate 16 p o s i t i o n s i n the T i t l e Checking area. The Motor
Vehicle Division is already scheduled t o eliminate 18 p o s i t i o n s i n the
T i t l e Checking area by the end of the current f i s c a l year and the p o s i t i o n s
have already been deleted from the Highway Fund Budget.
The report on page 6 recommends 11 p o s i t i o n s be retained f o r t i t l e
sample checking under the new county sampling program. The Motor Vehicle
Division w i l l u t i l i z e 15 t o t a l authorized p o s i t i o n s f o r t h i s a c t i v i t y .
The a u d i t study was based on workload l e v e l s i n the processing system t h a t
existed p r i o r t o the implementation of the sample check program. The
work standards determined i n the a u d i t , t h e r e f o r e , r e q u i r e some
modification to be applicable t o the t i t l e sampling procedures. Under
the new sampling program i t w i l l take more t i m e per t r a n s a c t i o n than under
the old scanning program since a complete check w i l l be performed on each
t i t l e a p p l i c a t i o n s e l e c t e d f o r sampling. Also, a d d i t i o n a l time w i l l be
required to log and record t e s t r e s u l t s . Additional s t a f f time w i l l a l s o
b e r e q u i r e d t o r e t u r n r e j e c t e d work and rehandle when returned.
In summary, i n regards t o the T i t l e Checking a r e a , t h e Motor
Vehicle Division is already scheduled t o eliminate two more p o s i t i o n s
than recommended i n the r e p o r t . The r e p o r t recommends leaving 11
p o s i t i o n s to perform the sampling program, whereas t h e Motor Vehicle
Division is planning t o r e t a i n 15 p o s i t i o n s f o r t h i s a c t i v i t y . It is
premature to a r r i v e a t a s t a f f i n g number f o r the sampling program.
Such a determination w i l l be made when ( 1) the program is f u l l y implemented
and ( 2) the planned PRMS study ( work standards and p r o d u c t i v i t y development)
is completed.
The report recommends t h e reduction of 5 p o s i t i o n s i n the T i t l e
)! aster F i l e Unit. The Department of Transportation is not i n agreement
with t h i s recommendation. The methodology used t o determine standards
f o r both the f i l i n g of t i t l e I . D . s , plus other r e l a t e d work is not an
accurate estimation of the time required t o do such work. However,
f u r t h e r comment a t t h i s time is not necessary because c u r r e n t l y an e x h a u s t h e
PRXIS Study ( work standards and p r o d u c t i v i t y development) is being conducted
in the Title Master File area which will determine appropriate work standards,
and as a result, appropriate staffing. This exhaustive study will take
many weeks and will take into consideration all facets of work activity
in the Title Master File and will develop specific time standards for each
major work activity. At the conclusion of that study, a better determination
can be made as to the level of staffing required in the Title Master File
Sect ion.
On page 10 of the report it is recommended that the logging and
stamping of county submitted title applications be eliminated. With
regard to logging of title applications, this is an internal control device.
It is now possible to eliminate logging of title applications as MVD
implements the new title sampling program. The elimination of lien document
stamping cannot be done without legislative change. The Department of
Transportation will be submitting legislation for enactment to eliminate
stamping of lien documents. However, it must be remembered that the
financial industry has not been sufficiently consulted in regard to this
matter, and there could be opposition to this measure.
On page 12 of the report it is recommended the typing of trouble
letters be eliminated. This measure recommends sending trouble letters
to customers and county assessors in a handwritten format. The Motor
Vehicle Division has now implemented this recommendation.
On page 14 of the report it is recommended that the title processing
procedures be streamlined to reduce the amount of time to produce a title
to possibly as little as 3.5 work days. This is indeed a desirable
goal, and one in which Motor Vehicle Division of the Department of
Transportation will strive. Except for the recommendations to place common
work units in proximity to each other and to eliminate logging and stamping,
the report does not make any specific recommendations on title processing
steps to eliminate. Therefore, at this time the Department of Transportation
cannot concur or disagree that a 3.5 to 4.5 day standard is achievable.
However, the Department of Transportation will be making a concerted
effort in the near future to study its title processing system to insure
quality titles are produced in a timely way.
On page 17 of the report it is recommended that the Motor Vehicle
Division develop work standards and management information reporting. The
Department of Transportation certainly concurs with this recommendation
since the Department has already planned a major PHIS Study which is
the development of work standards on major work units throughout the
Department. The Title Processing area within the Motor. Vehicle Division
is one of the major areas to be studied.
In conclusion, the Department of Transportation will eliminate
during the current fiscal year 23 positions in the Title Processing area.
If funding is received for the Motor Vehicle ~ ivision's fiscal year
83/ 84 budget request for the conversion of title records onto the computer
system, the Plotor Vehicle Division will be able to further eliminate in
fiscal year 84/ 85 twenty- two Title Master File positions. The efforts
already implemented, currently in- process, and planned for implementation
in the Title and Registration reflect that Arizona Department of Transportation
is achieving a more efficient operation and still producing a quality title.
The goal of eliminating 45 positions is certainly indicative of this.
FINDING I1
The S t a t e can earn as much as $ 1,000,000 annually by
t r a n s f e r r i n g r e s p o n s i b i l i t y t o r e c e i v e d e p o s i s t s and
d i s t r i b u t e t h e v e h i c l e i n - l i e u tax from the County
Treasurers t o t h e S t a t e Treasurer. In a d d i t i o n , the
Motor Vehicle Division has not adequately c o n t r o l l e d
the timely c o l l e c t i o n of v e h i c l e l i c e n s e taxes and
fees from the County Assessors, r e s u l t i n g i n p o t e n t i a l
l o s t i n t e r e s t earnings of $ 344,000.
DEPARTMENT OF TRANSPORTATION POSITION: CONCURS WITH FINDINGS
The r e p o r t suggests l i e u taxes should b e t r a n s m i t t e d t o t h e S t a t e
Treasurer for disbursement r a t h e r than the County Treasurer with the
p o t e n t i a l of one m i l l i o n a d d i t i o n a l i n t e r e s t d o l l a r s per year. A second
finding suggests the Motor Vehicle Division has f a i l e d t o r e q u i r e
County Assessors to " timely" remit auto l i c e n s e tax and r e g i s t r a t i o n fees
t o the S t a t e .
In regard t o the recommendation t h a t t h e S t a t e Treasurer disburse
l i e u taxes, the Department of T r a n s p o r t a t i o n h a s proposed l e g i s l a t i o n i n
t h i s area. The Department of Transportation submitted l e g i s l a t i o n
( SB 1276) to the 1982 L e g i s l a t u r e requiring t h e d a i l y or immediate
t r a n s m i t t a l of the HURF share of v e h i c l e l i c e n s e taxes c o l l e c t e d by t h e
c o u n t i e s . T h i s l e g i s l a t i o n was amended by the House Transportation
Committee t o r e t a i n t h e o r i g i n a l procedure. ADOT w i l l a g a i n b e submitting
l e g i s l a t i o n f o r d a i l y t r a n s m i t t a l of HURF l i e u taxes.
The report suggests the Motor Vehicle D i v i s i o n h a s " no c e n t r a l
control" t o assure timely remittance of S t a t e HURF monies by County
Assessors. MVD has i s s u e d g u i d e l i n e s t o the County Assessors i n t h i s
regard, but such guidelines r e l a t e d t o work processed where funds were
a v a i l a b l e f o r d i s t r i b u t i o n . MVD has not s e t standards f o r how f a s t from
t h e o r i g i n a l receiving of a taxpayer's r e g i s t r a t i o n t o the time MVD should
r e c e i v e t h e money, regardless of when t h e r e g i s t r a t i o n was processed. -
It is the Department of Transportation's view t h a t not only should County
Assessors immediately remit monies a v a i l a b l e from processed work, - b- ut-t
h a t such work should be processed t i m e 3 s o t h a t t h e r e is no undue delay
i n t r a n s m i t t i n g the s t a t e ' s share. heref fore, ADOT w i l l be seeking an
amendment to A. R. S. 28- 1598 t o require remittance of HURF revenues within
a given number of working days a f t e r r e c e i p t ( not a f t e r processing of work).
In past years, the Motor Vehicle Division has addressed the problem
of timely remittance of HURF revenues by County Assessors s e v e r a l times.
A d i r e c t i v e addressed t o a l l County Assessors, dated December 17, 1976
required a l l counties to submit a d a i l y payment of fees t o the Plotor Vehicle
Division. The d i r e c t i v e requires " Motor Vehicle Division fees w i l l be
promptly forwarded to the Motor Vehicle Division". There is usually a
3 - 5 day time lag between sign- off date and the date MVD receives the
l a r g e r county's t r a n s m i t t a l s . In a l e t t e r dated July 28, 1980, addressed
to a l l County Assessors, the Motor Vehicle Division advised t h a t the
HURF share of vehicle l i c e n s e tax was t o a l s o b e r e m i t t e d on a daily b a s i s .
Six counties a r e c u r r e n t l y sending " daily" v e h i c l e l i c e n s e taxes though
the s t a t u t e s only r e q u i r e it by the f i f t e e n t h of each month.
The report did i d e n t i f y one weakness i n the monitoring procedure
f o r remittance by County Assessors of S t a t e revenues. The accounting
c l e r k responsible f o r p o s t i n g r e c e i v a b l e s did not have a c l e a r standard
to use i n determining untimely remittance. This w i l l be corrected and a
remittance standard is being e s t a b l i s h e d and w i l l be d i s t r i b u t e d t o a l l
County Assessors. This standard w i l l r e l a t e t o number of days from batch
" sign- off." What is not c l e a r is what w i l l happen i f a county cannot meet
the remittance standard.
Resolution of the i s s u e of " inadequate controls" over the c o l l e c t i o n
and remittance of v e h i c l e taxes and fees from t h e counties cannot r e a l l y
be e f f e c t i v e l y addressed by the Motor Vehicle Division. This is due t o
the f a c t t h a t without s t a t u t o r y a u t h o r i t y t o enforce the c o l l e c t i o n and
remittance of these f e e s , t h e r e is no way t o assure the compliance by the
counties. Although l e g i s l a t i o n may be the s h o r t term answer t o the
problem, i n the long run the r e a l s o l u t i o n l i e s i n t h e complete t r a n s f e r
of t h e l i c e n s i n g and r e g i s t r a t i o n functions handled by the counties t o the
Motor Vehicle Division. This would enable t h e Motor Vehicle Division
to have immediate and d i r e c t c o n t r o l over a l l monies c o l l e c t e d .
Disbursements to t h e o t h e r funds i d e n t i f i e d i n A. R. S. 28- 1591( c) could be
handled without any l o s s of i n t e r e s t earnings caused by t h e t r a n s f e r of
monies between governmental e n t i t i e s .
FINDING I11
IlVD has not required the c o l l e c t i o n of prior- year
v e h i c l e l i c e n s e taxes i n accordance with S t a t u t e
r e s u l t i n g i n revenue l o s s e s of between $ 102,000 -
$ 312,000 annually. In a d d i t i o n , MVD h a s n o t enforced
the c o l l e c t i o n of p e n a l t i e s r e s u l t i n g i n a d d i t i o n a l
l o s t revenue.
DEPARTMENT OF TRANSPORTATION POSITION: CONCUR WITH FINDINGS
There a r e two i s s u e s i n t h i s f i n d i n g d e a l i n g w i t h the case where
a v e h i c l e s k i p s one or more r e g i s t r a t i o n periods but was used on the
highway. The report s t a t e s the Motor Vehicle D i v i s i o n h a s not required
the County Assessors t o c o l l e c t these p r i o r year taxes and p e n a l t i e s .
The report presents a l e g a l argument backed up by a L e g i s l a t i v e Council
advisory t h a t such p r i o r year taxes and p e n a l t i e s a r e due.
With regard t o the p e n a l t i e s , the method of a d m i n i s t r a t i o n of
p e n a l t i e s was changed with the passage of SB 1001 i n the 1981 Trans-p
o r t a t i o n Special Session. The nature of the penalty was changed t o
be a compounding penalty up to a maximum of $ 100. P r i o r year and
c u r r e n t y e a r no longer have a meaning. County auto l i c e n s e o f f i c e s
have been provided explanations about t h i s .
With regard to the p r i o r year l i e u tax i s s u e , the L e g i s l a t u r e needs
to address t h i s i s s u e . A. R. S. 28- 1591 e s t a b l i s h e s t h e c o l l e c t i o n
procedures for t h i s tax. A. R. S. 28- 1591 does not assign MVD the a u t h o r i t y
to mandate t o County Assessors the p r a c t i c e s of c o l l e c t i o n of l i e u tax.
The s t a t u t e provides t h a t the l i e u tax " shall b e c o l l e c t e d by t h e
r e g i s t e r i n g o f f i c e r . . " which f o r 12 Arizona counties is the County Assessor
and for two counties is MVD. H i s t o r i c a l l y , t h e County Assessor Association
has e s t a b l i s h e d p r a c t i c e s f o r l i e u tax c o l l e c t i o n s . MVD should s e t
uniform p r a c t i c e s f o r assessing and c o l l e c t i n g l i e u tax and w i l l recommend
amending A. R. S. 28- 1591 to c l e a r l y give MVD such a u t h o r i t y .
FINDING I V
The Department has f a i l e d t o adequately plan, manage
and support computer systems development f o r a major
MVD computer system f o r t i t l e and r e g i s t r a t i o n
processing.
DEPARTHENT OF TRANSPORTATION POSITION: DO NOT CONCUR
The frequent reference i n the r e p o r t to 1968 as a s t a r t i n g date f o r
the T i t l e and R e g i s t r a t i o n ( T & R) System requires some e l a b o r a t i o n .
The a u d i t report appears t o consider the T & R System, which is being
developed, as j u s t an expansion of the system now i n production. Actually,
they a r e two separate and d i s t i n c t systems. The current system, which
is r e f e r r e d t o as a t i t l e and r e g i s t r a t i o n system, is, i n r e a l i t y , only
a r e g i s t r a t i o n and fee accounting system. The new system is a t r u e t i t l e
and r e g i s t r a t i o n system with fee accounting c a p a b i l i t y . It u s e s a more
advanced programming methodology of composite design and modular program
construction. This methodology w i l l permit most l e g i s l a t i v e and other
changes to be made by modifying only one module r a t h e r than changing many
programs. It is a l s o expected t o improve response time and w i l l improve
t r a n s a c t i o n s e c u r i t y and operator e f f i c i e n c y .
There were many high p r i o r i t y p r o j e c t s which impacted and n e c e s s a r i l y
delayed the development of the new T i t l e and R e g i s t r a t i o n System. It
is conservatively estimated t h a t major p r o j e c t s completed consumed 23
man- years which were not i n support of development or enhancement of the
system. A l l of t h e s e p r o j e c t s were mandated. by l e g i s l a t i o n or were
management d i r e c t i v e s .
Since November 1978, p r o j e c t s have been i n i t i a t e d on a Data
Processing Project Request form. These r e q u e s t s i n c l u d e b e n e f i t s and the
estimated man- hours and d o l l a r c o s t s . However, the Department does not have
a computerized method of tracking and accumulating cost and man- hour data •
by p r o j e c t . The Department began s e r i o u s l y looking a t t h i s some two and one-half
years ago. It was r e a l i z e d t h a t , with major p r o j e c t s such as the
new T i t l e and R e g i s t r a t i o n System, t h e method of capturing data only on
a monthly b a s i s - s t i l l needed improvement. There a r e some very good cost
accounting software packages on the market. However, w i t h r e c e n t and current
budget l i m i t a t i o n s , d o l l a r s f o r t h i s a c q u i s i t i o n have not been approved t o
date. As an added c o n t r o l , the EDP Steering Committee and Sub- committee
a r e p a r t i c i p a t i n g i n t h e p r i o r i t y s e t t i n g process of major developments.
In summary, the Department of Transportation w i l l continue t o
develop and implement, within resources a v a i l a b l e , meaningful and cost-j
u s t i f i e d controls and procedures required t o e f f e c t i v e l y manage computer
resources.
- OT HER PER- T- I- N - E - N- T - IN - FOFO lATIOhT: MVD'S R- E- LA- TI- ON SHIP WITH COUNTY ASSESSORS
The report references a t l e a s t t h i r t e e n times t o t h e e f f e c t t h a t
" MVD has not adequately controlled" or has " inadequate control procedures"
over the County Assessors. The r e l a t i o n s h i p between the Department of
Transportion and the County Assessors involves an i n f l e x i b l e s p l i t
r e s p o n s i b i l i t y i n t h a t ADOT's Motor Vehicle Division has the primary
s t a t u t o r y r e s p o n s i b i l i t y t o administer v e h i c l e t i t l e and r e g i s t r a t i o n laws
but is required without u n i l a t e r a l option by s t a t u t e to delegate the
execution of t i t l e and r e g i s t r a t i o n t o t h e County Assessors. The Assessors
a r e elected county o f f i c i a l s meaning the Department of Transportation has
no c o n s t i t u t i o n a l or s t a t u t o r y means t o order, r e q u i r e or force the
elected County Assessor t o do anything. ADOT does not have any a u t h o r i t y
by s t a t u t e or otherwise t o intervene i n a county operation or r e q u i r e the
County Assessor t o cease the t i t l e and r e g i s t r a t i o n function and allow
ADOT's Motor Vehicle Division t o execute the function.
Based on the above f a c t s , it is not c l e a r what the report means
by '' control" or " force". It appears the findings a r e based on using a
normal o r g a n i z a t i o n a l model as a frame of reference t o apply t o a very
unique arrangement. ADOT does have the a u t h o r i t y t o prescribe a uniform
procedure of administering t i t l e and r e g i s t r a t i o n and has done so. The
Department of Transportation does not have any a u t h o r i t y t o e f f e c t sanctions
on a County Assessor f o r f a i l u r e t o comply with ADOT guidelines nor did
the report o f f e r any a s c u r r e n t l y implementable.
The County Assessors, county auto l i c e n s e managers and Motor Vehicle
Division personnel a l l work very hard a t making t h e t i t l e and r e g i s t r a t i o n
program as e f f i c i e n t and e f f e c t i v e as reasonably possible under s t a t u t o r y
and budget r e s t r a i n t s . I n the main t h e r e is a very strong s p i r i t of
cooperation between the counties and the s t a t e . Unfortunately, however,
a t times county p r i o r i t i e s and needs cause county a c t i o n s t h a t a r e not t o t a l l y
c o n s i s t e n t with s t a t e g u i d e l i n e s . Therefore, j u s t about a l l the problems
i d e n t i f i e d i n the report r e l a t i n g t o the counties and MVD a r e best explained
and understood by the organization of the system.
It is agreed t h a t t h e Motor Vehicle Division is t h e one common element
i n the t h i r t e e n t i t l i n g and r e g i s t r a t i o n functions and thereby h a s a n
o v e r a l l perception of r e g i s t r a t i o n needs and requirements. The Department
of Transportation w i l l develop a system of policy development and s t a t u t o r y
i n t e r p r e t a t i o n and w i l l adopt a p o s i t i v e - p- olicy advisory program t o a s s i s t
in the development of a uniform statewide r e g i s t r a t i o n system. The policy
advisory process w i l l be developed i n cooperation with county o f f i c i a l s
and county r e g i s t r a t i o n managers.
ARIZONA DEPARTMENT OF TRANSPORTATION
MOTOR VEHICLE DIVISION
1801 W. Jefferson, Phoenix. Arizona
MAILING ADDRESS: P. O. Box 2100
Phoenix, Arizona 85001
Telephone 261 - 7581
NAME
DATE
VEHICLE ID NO
THE MOTOR VEHICLE DIVISION CURRENTLY IS:
( A) holding your application in Suspense File in Docket No.
- ( 6) returnrng documents submitted.
-' - - ,-, - - - - . ' I - - _ Y V
,-, 7 - , - - -- - - - .
* - : I :- 2 - L ? S - ' ? .,~!, ~
Appllcatron completed rn full, srgned and notartzed ( Must be s~ gned where rndlcated by " X" )
Bill of Sale - Notarized
Certificate of Title
Complete lien information on application
Court order appointing a personal representative
Enclosed affidavit - completed, signed, notarized
Emisslon control affidavtt
Gross vehicle weight declaration by owner
I. D. incorrect on lien instrument ( Correction must be acknowledged by signature and date)
Ltcense plates must be surrendered
Lien Flling Receipt. Stamped " Paid", dated and counter- signed
Lien Instrument ( Security Agreement) missing OR illegible
Lien release from
LIENHOLDER OF RECORD AGDRESS
AMOUNT AND DATE OF LIEN LIEN RECORDED IN NAME( S) OF
Manufacturers Certlflcate of Orlgln mlsslng OR rncorrect as to
MVD Offrcers lnspectlon OR relnspectlon for
Need dealers reasstgnmenr from to
Need Odometer Disclosure from to
Notarlzatlon must Include Notary srgnature, current date, Notary explrat~ ond ate, Notary Seal
Notartard srgnature of seller on trtle
-- Non- probate Affldavrt - Notarlzed
OR Affrdavlt - Notarrzed ( See reverse slde of Appllcatlon)
Power of Attorney - Notarlzed ( Power of Attorney also needed when tltle 1s to be malled to other than the owner)
Residence address or mallfng address
-- Submlt documents to your local County Auto Llcense Offlce
-- Written consent from lienholder to transfer exlstlng llen ( thls also applles when addlng or deletlng a name)
due for
$ 4 00 for Certlflcate of Trtle $ 4 00 for Dlsmantlrng Permrt
-- $ 4 00 for Duplrcate Tltle $ 4 00 for Duplicate Dlsmantl~ ngP ermrt
-- $ 8 00 for Mobtle Home T~ tle $ 4 00 for Salvage Certlflcate
$ 8 00 Duplicate Moblle Home Tltle $ 4 00 for Dupl~ cateR eglstratlon
----- $ 8 00 for Transfer of Regtstratlon $ 9 00 Transfer of Regrstrat~ on- Motorcycle
Late Reglstratlon. Penalty Fee $ 4.00 for Commercial Registration Fee
Late T~ tleP enalty $ 49.00 for Trailer Regstration Fee ( GVW in excess of 10,000 Ibs.)
REMARKS