RALEIGH (WTVD) -- According to a new state audit, the North Carolina Department of Public Instruction may be out hundreds of thousands of dollars due to shortcomings in a program that takes money from DWI vehicle seizures and gives it to schools.
The audit looked at whether private contractors operating the DWI/Felony Speeding to Elude Vehicle Seizure Program as they're required to by law. The scope of the investigation looked at seizures between July 1, 2011, and June 30, 2016.
State auditor Beth Wood notes that both contractors for the program couldn't provide documentation for some of the vehicles they towed, but Wood took particular issue with the contractor out Erwin, NC, Martin Edward & Associates.
Of the 234 vehicles that went unaccounted for, MEA was responsible for 221. Together, the vehicles had a value of approximately $634,000.
As a result, Wood said in the audit, "the state has no way of knowing what happened to approximately $634,0003 of seized vehicles, including whether or not contractors inappropriately kept or auctioned these vehicles for their own profit."
According to the contract with the state, the vehicles should have been auctioned, been in contractor storage, or been returned to the owner. However, Wood said, "contractors were unable to provide documentation supporting the status or location of the vehicles."
Wood's audit continues, "Because contractors were unable to provide documentation supporting the status or location of these vehicles, there is a risk that contractors inappropriately benefited from the contract. And because of the lack of documentation, it would be difficult to detect if contractors inappropriately benefited from the Program. For example, they could have kept the vehicles for themselves or auctioned them off and retained all the proceeds."
The money the contractors receive from seized vehicles is split with the state Department of Public Instruction. "There is also a risk that local school districts received fewer funds to support educational operations. If these vehicles were never auctioned," Wood said, "then the school districts did not receive a portion of the proceeds."
According to the response to the audit by the Department of Public Instruction, the educational agency never wanted the responsibility of administering the program and never considered it part of DPI's core business. As such, Wood said, "DPI never allocated the proper amount of time and resources necessary to ensure that the program was properly administered and monitored."
The audit includes specific examples of what went "missing," including a 2007 Mercedes SLK 350. The vehicle was listed on MEA's October 2015 inventory report but not their November 2015 inventory report. Wood's audit said, "There is no record of the vehicle being sold and it was not listed in the contractor sales reports or auction documentation."
Wood slams contractor Martin Edwards and Associates, Inc., saying the company "actively hindered the audit."
"The Department of Administration (DOA) should consider if the State should continue to contract with Martin Edwards and Associates, Inc.," Wood wrote. "In addition to its inability to produce documentation supporting the status or location of 221 seized vehicles, MEA was uncooperative and actively presented scope limitations to auditors. For example, MEA tried to refuse a state auditor subpoena, was unwilling to produce documentation requested by auditors, had poor record keeping and could not produce over 440 documents. Auditors served MEA with a subpoena. MEA tried to refuse the subpoena and threw it back to the serving auditor.
The Department of Administration, which took over monitoring of the program in 2016 reported the same: an uncooperative MEA. But in May of that year, the agency asked for new bids and only the same two companies named in the audit (MEA and Eastway) responded. They were again awarded the state's business. MEA in the eastern part of the state, Eastway in the west).
The audit also takes issue with law enforcement for not reporting many seizures in a timely fashion to the DMV so the agency could put holds on the vehicles' titles. The audit points out that "Once a vehicle has been seized by law enforcement, it is the duty of the officer to notify DMV within 24 hours so DMV can place a title hold on that vehicle." It goes on to say, "According to law enforcement agencies, they are not properly trained on the state law requiring notification to DMV within 24 hours."
Auditors reviewed DMV vehicle seizure reports for the period July 1, 2013, to June 30, 2016, and found that 46% of vehicles seized by law enforcement were reported to DMV after the 24 hours required by state law. Of those 4,098 vehicles, 360 were not reported until after at least 10 days after the time of seizure.