City of Houston Office of the City Controller

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CITY CONTROLLER'S AUDIT FOCUSES ON CITY'S FUEL USAGE

June 30, 2010 -- A newly released audit by the Office of the City Controller’s Audit Division confirms that the city is receiving quality fuel at a fair price and in a timely manner. Furthermore, the city maintains an adequate level of fuel inventory to support normal City operations during emergencies.

However, it is estimated that just over 20 percent of the city’s approximately 200 active fuel storage tanks have exceeded their estimated useful life.  While documented support of ongoing monitoring reveals no immediate risk, the cost to replace these tanks is approximately $6.5 million.  The audit identified that a common challenge for governmental entities during times of budgetary constraints is deciding the priorities of infrastructure maintenance, replacement costs, and the inherent competing forces that exist.  The audit report reflects a situation consistent with this issue.

The audit also recommends full automation of fuel sites and consolidation of information systems that are not currently integrated.

“Clearly, the city’s fuel usage system is immense,” says Controller Ronald C. Green. “Just as clear is that fuel is essential to the city’s operations and this audit suggests some possible enhancements to the system, which would need to be funded.  The City has some difficult choices on the timing of when to perform the needed physical upgrades and process improvements.  Lengthy deferral is similar to delaying a liability and should be factored into the decision process.”