To ensure that programs supported by special plates receive appropriate amounts of revenues due to them, Motor Vehicles should annually collect all fees for special plates that are no longer on a vehicle but are retained by the plate owner.
The DMV completed a purge of Special Interest License Plates and Environmental License Plates with unpaid retention fees on September 4, 2015. The purged plates are now available for new purchasers and this alternative action achieves the intent of the recommendation.
Corrective action is completed.
The Information Services Division (ISD) within DMV is planning and completing the computer programming for the cancelation and purge of special license plates with unpaid retention fees. This will ensure these plates become available for new purchasers.
DMV has stated it would be cost prohibitive to create a system for retention fee collections. DMV is moving forward on the cancelation and purges of special licence plates with unpaid retention fees to make these plates available to the public.
In its initial response to the audit report, Motor Vehicles had stated that it will conduct a cost/benefit analysis to determine whether recommended changes would result in a positive return on the investment. Although Motor Vehicles now states that creating a system for retention fee collections would be cost prohibitive, it did not provide any documentation to support its claim.
A data extract was performed of the entire vehicle registration population to find records for special plates that were removed from a vehicle or with expired registration. The data showed 185,410 special license plate vehicles with expired registration and after eliminating those with certain conditions it was determined 87.5% are inappropriate for collection. Retention fees for the remaining 23,107 special plates have a maximum potential value of $2.3M. It is unknown how much of this money would have been collected if DMV had more aggressive billing practices. A cost-benefit analysis was performed to determine the best method to collect retention fees that are not paid as part of the annual vehicle registration process. It was determined there were no more than 6,064 license plates with retention fees worth approximately $244,752 that were unpaid annually. It is likely that revenue will be lower than the maximum possible because few plate owners would respond with a payment. DMV contacted the owners of expired personalized plate configuration that were ordered by Pet Lover applicants. Approximately 32% of the owners with expired plates responded; 4% of the owners submitted a payment and the remaining owners released their interest in the plate. Based on this response, DMV could expect 243 payments annually and a maximum of $8,720 in retention fees. In addition, development costs of nearly $1M for a standalone retention fee collection program would bring little new revenue while increasing the cost and complexity of the special plate program. DMV can implement a more aggressive position by canceling special plates when retention fees are not paid. Planning is underway for purges of special plates where retention fees have not been paid for 4 years making these configurations available to new purchasers. DMV will consider cancelling license plates when more than 1 year of retention fees is due.
Motor Vehicles did not provide any documentation for its anlaysis. Therefore, we have assessed it as "Pending" until we receive the analysis that Motor Vehicles completed and review and assess it.
DMV continues to analyze the database limitations and the cost/benefit to making the recommended changes.
Agency responses received after June 2013 are posted verbatim.