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5/24/2018
West Virginia Audit Finds Bureaucrats Commuting On Taxpayer Dime
State employees, including Supreme Court justices, caught misusing taxpayer funded cars to commute in violation of IRS rules.

Supreme Court Buick
Hundreds of West Virginia state employees are using taxpayer-funded cars to drive to work and conduct personal errands, a report released Friday by the state's legislative auditor found. Those employees included state Supreme Court justices who appear to have run afoul of federal tax laws.

West Virginia's free car policies tightened after a December 2016 audit report uncovered the widespread practice. The Division of Corrections turned in 45 automobiles, and executive branch agencies got rid of 246 cars. Despite being aware of the heightened scrutiny, a number of agencies failed to ensure its employees adhered to all applicable regulations.

Out of 5464 state-owned vehicles, 495 were regularly used by commuters -- 348 of whom worked in the Transportation and Commerce departments. The auditor was only able to verify whether the use was appropriate for a fraction of the cases since the agencies failed to maintain proper records. About a third of the travel was found to be for non-business purposes.

"The dearth of information for the remaining 372 individuals is seemingly the result of exemptions, either real or assumed, in the West Virginia State Code from the Fleet Management rules and regulations," the audit report explained. "Apparently, this has led to many agencies erroneously applying purchasing exemptions to fleet management rules and regulations."

While commuting is allowed in state vehicles, federal tax law requires such use to be reported as a taxable benefit. The audit provided the example of a state employee who enjoyed the use of a 2014 Jeep Grand Cherokee, racking up 29,464 miles over the course of four years. The cost of the lease and gas added up to a taxable benefit of $3520.

Justices on the West Virginia Supreme Court of Appeals were likewise caught last month making the most of their access to a fleet consisting of a 2007 and 2009 Buick Lucerne (pictured) as well as a 2012 Buick LaCrosse.

"Justice [Menis E.] Ketchum's and Justice [Allen H.] Loughry's use of the vehicles should have been, but was not, included in their respective IRS W-2s as a taxable fringe benefit, although there is evidence to suggest that the justices and their staff knew that the personal use should have been included," the audit found (view report in a 7mb PDF file).

From 2012 to 2016, Justice Ketchum racked up 78,423 miles on the 2007 Lucerne, charging taxpayers $12,250 for the gas he used. The auditor questioned the justice's use of the vehicle to drive to golf outings in Virginia.

"The legislative auditor finds that the instances documented in this report, taken together with media reports, show a complete lack of regard for the principles of fiscal prudence and responsibility," the April audit concluded. "The decision by the court to not follow federal and state tax laws is particularly troublesome given the substantial evidence that suggests the court did, in fact, know how to properly calculate and apply the taxable income from these fringe benefits going back to at least 2012."

A copy of the new audit is available in a 4mb PDF file at the source link below.

Source: PDF File Statewide Fleet Commuting (West Virginia Legislative Auditor, 5/18/2018)



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