- The Washington Times - Thursday, September 2, 2004

The District has lost more than $1 million in the last 27 months by selling surplus emergency equipment at a fraction of its value, according to an inspector general’s audit report released yesterday.

In the most egregious case, a 1993 surplus fire engine sold at an April 2003 auction for $25, though Internet dealers valued similar models at $125,000, according to the report issued by interim Inspector General Austin A. Anderson.

The report also stated that from April 2002 to September 2003 the city’s Personal Property Division, which is under the Office of Contracting and Procurement, sold 11 fire engines at public auctions for $3,125.

However, Internet dealers valued similar equipment at $497,200.

The engines sold at the auctions for an average price of $284.

“Overall, [the Personal Property Division’s] ineffective management of excess property has led to the auction of valuable District property at ‘bargain basement’ prices and loss of needed income for the District,” the report stated. The report does not call for any employees to be punished.

The story was the same for surplus ambulances.

From February 2002 to September 2003, the city auctioned 38 ambulances for $121,900. The amount is about one-tenth of the $1.2 million the vehicles were valued at by Internet dealers.

According to the report, new fire engines can cost more than $200,000, and new ambulances can cost more than $60,000. The report states that used emergency vehicles can attract significant sums of money from small departments nationwide that employ secondhand vehicles or from departments that buy used equipment for parts.

Auditors reduced Internet dealers’ prices by 25 percent to account for any disparity between the estimated price and the actual selling price, but still concluded the city lost $1,159,875 over the 27-month review period.

Jacques Abadie III, the District’s chief procurement officer, responded to the findings by saying a very high percentage of the emergency vehicles turned in for disposal were either stripped or required major repairs.

“Determination of the fair-market value of fire and EMS equipment must include consideration of the overall condition of the apparatus at the time of sale, any damage to the apparatus, missing parts due to cannibalization, and the condition of the engines and transmission,” he said.

Mr. Abadie’s response contradicts the report’s finding that auditors inspected and started eight of the 11 fire engines that were auctioned and “did not note any bodily damage.”

Auditors reported that the city also was losing in excess of $500,000 a year as a result of poor oversight and a lack of internal controls inside the Personal Property Division.

“A comparison of auction revenue generated versus operating costs during a 27-month period showed that it cost the District government $1.50 to dispose of $1 worth of excess property,” the report stated.

Mr. Abadie also disputed that finding, saying the division saves money for the city by fulfilling D.C. government equipment needs using excess equipment.

The report calls for the division to better train staffers on how to conduct auctions, submit quarterly activity reports to the D.C. Council as required by law and to have the fire department review and document the condition of all equipment before submitting it for disposal. It also calls on the division to better publicize auctions and to set minimum prices for emergency vehicles based on sales of similar models in similar condition.

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