Waste of the Day: Nevada’s Mechanics Fail Test

Topline: Johnny Appleseed is responsible for the poor fraud controls in the Nevada Department of Transportation.

Nevada inventory discrepancies – and fraud

Or at least, someone pretending to be Johnny Appleseed. One employee signed a document using the fake name to hide the fact they did not have approval to make purchases, according to a new investigation from Nevada’s legislative auditor.

It’s just one of several issues in the Department of Transportation, where “controls designed to detect and deter fraud are not fully implemented or enforced” and “mechanics are being paid for duties they are not performing.”

Key facts: Only certain employees are allowed to sign documents confirming that purchased supplies were received by the Department. The audit found that 38% of the documents did not have proper approval, and many were signed with names that were either fake or illegible. 

Employees are also banned from making purchases of more than $5,000 without approval, but auditors found that 40% of the time, employees split the purchases between several credit cards to make them appear like they cost less than $5,000, the audit found.

There are also issues with the Department’s stockpiled inventory. Staff are supposed to measure the size of stockpiled inventory using units like height or length. Instead, they used absurd measurements like “comparing it to the height of a truck or by counting strides,” the audit found.

What are Nevada mechanics doing when not repairing State-owned vehicles?

When inventory measurements are mistaken by 5% or more, the Department must conduct a review to identify the mistakes. Some measurements were wrong by 9,000%. A physical count of inventory stockpiles showed a $25 million discrepancy between what is listed on paper records and what is actually in storage. 

The Nevada Department of Transportation also has mechanics on its payroll at nine different equipment repair shops. The mechanics must spend at least 80% of their time repairing state-owned vehicles, but that is only happening at two of the repair shops. Mechanics at one shop in South Las Vegas are only spending 27% of their work hours repairing state vehicles while being paid for 80%.

It’s unclear what they were doing the rest of the time.

The audit said that while no fraud was uncovered, the Department of Transportation has “a history of fraud incidents” caused by poor internal controls. In 2013, an employee made $250,000 of fraudulent purchases on a state credit card. Another employee stole $35,000 worth of tires in 2014.

Background: Tracy Larkin Thomason, the head of the Department of Transportation, made $145,000 in 2024 — plus at least $88,000 in fringe benefits.  Of the almost 2,000 employees, there were 260 who made $100,000 or more in 2024, according to OpenTheBooks’ data.

While the 2024 Nevada State payroll doesn’t include fringe benefits, 2023 fringe benefits averaged $40,000 per person.

Supporting quote: Larkin Thomason said $25 million discrepancy isn’t completely accurate.

So where do the discrepancies come from?

Asked where the discrepancies come from, Larkin Thomason said, again according to KTNV Las Vegas:

It’s more of errors in some of how it’s reporting and a lot of reporting of stockpiles in the field, like sand, have historically been measured by a maintenance worker out there and it’s like it looks about 10 feet tall and about 15 feet long and multiplying it. In the last two years, our maintenance division asset management is looking at a couple of apps. In the last year and a half, we’ve been transitioning to a phone app where they can walk around the stockpile and we’re hoping that gets us closer because when you go out, it’s a very imprecise measurement.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com. 

Summary: The legend of Johnny Appleseed might be exaggerated, but the lack of oversight in Nevada’s Department of Transportation is all too real.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.