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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Department of Motor Vehicles
Registration and Enforcement of Automotive Services, Sales, and Salvage Facilities


Issued: August 15, 2017
Link to full audit report 2016-S-71
Map to Potentially Unregistered Facilities
Link to 90-day response

Purpose
To determine if the Department of Motor Vehicles (Department) adequately ensures automotive service, sales, and salvage facilities are registered, and follows up on consumer complaints and takes enforcement action as necessary for violations. The audit covers the period January 1, 2014 through April 21, 2017.

Background
The Department is responsible for administering motor vehicle laws to promote highway safety, promote proper repairs, and protect consumers of motor vehicle repairs. The Vehicle and Traffic Law outlines the Department’s responsibilities for administering the registration and licensing for certain types of automotive businesses, including registration of repair shops, dealers, dismantlers, and junk and salvage facilities and licensing of inspection stations. The Department is also responsible for issuing and enforcing regulations of these automotive businesses. Automotive facilities may be registered or licensed as multiple businesses. For example, many registered repair shops are also licensed as inspection stations. As of September 30, 2016, there were about 40,000 active automotive businesses with almost 24,000 unique facilities, because some are registered or licensed to perform multiple functions. Another 23,600 businesses registered or licensed within the past six years had expired registrations or licenses as of September 2016.

The Department is also responsible for receiving, investigating, and responding to complaints received from the public relating to the types of automotive businesses it regulates. Between January 1, 2014 and December 16, 2016, the Department received or currently had active approximately 6,900 complaints relating to automotive facilities. The Department is responsible for taking necessary actions against facilities with violations, which may include issuing penalties, suspending or revoking registrations/licenses to operate, or referring the operator or facility for criminal prosecution.

Key Findings

  • Our analysis of Department facility data and publicly available property records identified many automotive facility locations where businesses could potentially be operating without a valid Department registration. We performed site observations at 241 of these facilities, and found indications that 60 may have been operating as a public business but were unregistered. Our review of public classified advertisements identified an additional 95 unregistered facilities advertising auto repair services. Additionally, we identified 21 vehicle dismantlers that report to the Department of Environmental Conservation but were not registered with the Department.
  • We also identified delays in the Department’s process for handling consumer complaints. We assessed the time it takes to complete investigations, the time it takes to commence a hearing after the investigation is completed, and the time it takes to impose penalties once the hearing is completed. We identified lengthy delays between the completion of the investigation and the commencement of a hearing. Of 1,127 complaints that required a hearing, more than half (583) did not receive a hearing within 12 months from the date the complaint was received, as called for in the regulations. Factors that could contribute to the delays include the complexity of the cases and the fact that complaint case hearings are a lower priority than hearings for public safety cases.

Key Recommendations

  • Take steps to improve the identification of potentially unregistered facilities and determine whether they continue to operate, including (but not limited to) periodic analysis of publicly available information, such as property records and advertisements for repair services.
  • Examine the underlying causes of the delays and explore options for improving the ability to promptly address and resolve consumer complaint cases.

Other Related Audit/Report of Interest

Department of Motor Vehicles: Accountability for Traffic Ticket Surcharges (2014-S-26)


State Government Accountability Contact Information:
Audit Director: Steve Goss
Phone: (518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236