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Audit of the Registry of Motor Vehicles Audit Objectives, Scope, and Methodology

An overview of the purpose and process of auditing of the Registry of Motor Vehicles
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Table of Contents

Overview

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Registry of Motor Vehicles (RMV) for the period July 1, 2014 through December 31, 2016.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.  

Objective

Conclusion

  1. Does RMV properly administer its processing of disability parking placards?

No; see Finding 1 and Other Matters

  1. Does RMV properly process license applications?

No; see Findings 2 and 3

  1. Does RMV properly scan original out-of-state documents?

Yes

Methodology

To achieve our audit objectives, we gained an understanding of the internal controls we deemed significant to our audit objectives at a sample of 11 RMV offices through interviews and document reviews of override logs, cash transfer logs, and consolidated bank deposit and reconciliation statements provided by RMV. We reviewed the transactions for proper (1) approval of decisions regarding fee overrides, (2) closeouts2 of clerk cash drawers with the receiving tellers, and (3) evidence that the total cash deposited at the bank agreed with the total cash and check deposits3 for specific RMV service centers. We designed procedures to obtain sufficient and appropriate evidence to support our assessment.

In addition, we performed the following procedures:

  • To evaluate the processing of cash transactions for license applications, we selected a random statistical sample of 100 dates associated with the top 11 of the 30 RMV service locations based on total revenue, totaling 672 transactions. We requested documentation for inspection to determine whether the auditee retained records in accordance with its Cash User Manual requirement to keep the original supporting documentation for a license application for a minimum of seven years.
  • From the 1,686,045 licenses issued during the audit period, we filtered the list for 182,830 out-of-state licenses that were converted to Massachusetts licenses and selected a random statistical sample of 120 transactions, using a confidence level of 95% and an upper error limit of 2.5%. We requested that RMV’s internal auditors open these files, observing as they determined whether the license applications, proofs of identity, and proofs of residence were properly scanned and stored in RMV’s FileNet4 system. From an initial batch of 5,387,037 records, we filtered license data from the Automated Licensing and Registration System (ALARS) for the 4,033,545 licenses active during the audit period as well as each associated Social Security number (SSN) and then compared each to the Social Security Administration’s Death Master File (a database of SSNs of deceased individuals), producing 28,105 matches, to identify licenses that were issued to individuals after their dates of death. We used the same approach to identify people who died at least 45 days before their licenses’ expiration dates,5 and we inspected customer records in ALARS to determine whether the license statuses were appropriately set to “expired.”
  • We matched the 622,226 records from the disability parking placard file with the Death Master File, producing a population of 99,444 unique handicapped placards that had been issued to deceased individuals. With that information, we computed the number of days between each placard’s date of issue and its holder’s date of death, focusing on the records where placards were issued more than 30 days after the person died.
  • We obtained detailed data regarding the 60,690 letters that were mailed during our audit period to the estates of deceased disability parking placard holders requesting the return or destruction of the placards. We physically inspected these letters at RMV’s Medical Affairs Office to determine how many estate representatives responded to the letters and whether each placard was either returned or destroyed.
  • Because RMV does not have a system to track replacements, we performed an analysis of the issue and expiration dates of 622,226 placards using Audit Control Language software to determine whether each holder had another active placard at the time of issue to determine which placards were replacements.

We performed data validity and integrity tests on data from RMV’s database of placard holders regarding 622,226 disability parking placard records and approximately 4 million active driver’s licenses, including the 1.6 million licenses issued during the audit period, determining whether there were any duplicates, gaps in the date range, or invalid data, to determine whether the data were reliable. After joining RMV license data and Death Master File data, we performed data reliability analysis on the set of approximately 4 million licenses to confirm that the data (1) did not contain any duplicate records, (2) contained valid class codes, (3) included appropriate license numbers (i.e., numbers starting with the letter S), and (4) used valid data types and formatting in each field. If the data fell within these parameters, we assessed the ALARS license and Death Master File data as reliable for use. Although the Social Security Administration does not guarantee 100% accuracy, it does have a process for reporting errors and making updates, which increases the likelihood that the Death Master File is substantially accurate.

2.    Closeouts are the process used by RMV receiving tellers who perform either a midday or an end-of-shift reconciliation of cash received by RMV clerks. During this process, the receiving teller attempts to reconcile the amount of cash on hand in each clerk’s area to the amount of revenue collected by the clerk as reflected in RMV’s Automated Licensing and Registration System.

3.    The term “cash deposited” refers here to both cash and checks received by the clerks.

4.    FileNet is a Web-based system used by RMV to store electronic images of documentation.

5.    Death notices are normally reported monthly; therefore, we selected 45 days as the period before the expiration date to test whether the license status was set to “expired” because the license holder had died.

Date published: September 6, 2018

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