New York City’s Department of Finance (DOF) failed to return more than $460,000 to owners of seized vehicles that were auctioned due to a lack of financial controls and training, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“A lack of internal controls at the Department of Finance caused the department to shortchange vehicle owners of money that was rightfully theirs,” DiNapoli said. “There were also numerous issues with record keeping and training that need to be fixed so the city receives the funds it should and drivers aren’t unnecessarily punished. I am encouraged that the department generally agreed with our findings and is acting on our recommendations.”

City parking regulations direct where vehicles can stop, stand, and park. A notice of parking violation may be issued to the owner of any vehicle that is left in a location not in compliance with the city’s rules and regulations. When a registered vehicle owner doesn’t pay or dispute a ticket within approximately 100 days, DOF enters a judgment against the owner for the amount due, including penalties and interest. When the amount in judgment against the vehicle owner is $350 or more, the New York City Sheriff’s Office may immobilize the vehicle by attaching a clamp, or “boot,” to a wheel of the vehicle. When the owner does not pay the judgment debt or enter into a payment plan within 48 hours of the vehicle being booted, the vehicle may then be seized, towed, and sold.

DOF contracts with an auctioneer to conduct auctions of seized vehicles, which are sold to the highest bidder. For vehicles with a judgment debt, proceeds from the auction – after all expenses are paid – are used to settle the debt. Any money left, known as an “overage,” must be paid to the original owner or, if there is a lien against the vehicle, lienholders having obtained a court order.

During the audit period of July 2020 to May 2025, the Sheriff’s Office auctioned 1,188 vehicles for a total of $2,110,425. These vehicles had judgment debt amounts totaling $2,609,231. Some of the auctioned vehicles were sold for less than the amount owed but 486 had overages totaling $835,534.

DiNapoli’s auditors found that, despite requirements to return all overages from the auctions to the vehicles’ original owners or lienholders, DOF had not returned any overages since at least March 2023. During the period from March 2023 through May 2025, the sales of 221 vehicles resulted in overages totaling $464,710 that should have been returned to the vehicle owners or lienholders but were not.

DOF reported that personnel did not process any overages from March 2023 through May 2025 because they were not formally trained on how to do so. Notably, DOF lacked written procedures, including a process for returning overages to former vehicle owners or lienholders.

Auditors also found issues with judgment debts, which occur when a registered vehicle owner doesn’t pay or dispute a ticket within approximately 100 days and the city takes the legal step of entering a default judgment against the vehicle owner. The Sheriff’s Office said that it applied approximately $340,000 in auction proceeds to satisfy such judgements but provided support for only approximately $210,000.

DOF procedures provide that for each vehicle sold at auction, the Sheriff’s Office charges 5% of the sales price as a poundage fee, as well as an execution fee of $80. Auditors reviewed a judgmental sample of 135 vehicles and identified poundage fees higher or lower than 5% of the sales price, including an $863 poundage fee for a vehicle sold for $1,000. Additionally, while $187,774 was reported as poundage and execution fees, only $159,751 was recorded as revenue to the city. There is no assurance that the city received the remaining $28,023.

Auditors also found:

• When a vehicle is seized or booted for repeated unpaid violations, the Sheriff’s Office must send a judgment seizure notification letter that provides information, including outstanding violations. Of 31 letters reviewed, 28 showed $0 or had a blank space for the judgment amount. Another 16 letters reviewed had a different format, also with no judgment information displayed.
• For abandoned vehicles, after all expenses are paid, proceeds from the auction are held for one year for the benefit of the vehicle owner. If not claimed within a year, such proceeds must be transferred to the city’s General Fund. DOF did not provide information regarding transfers to the General Fund.
• The Sheriff’s Office requires the advertisement of an auction at least six days in advance of the sale of vehicles. For Bronx County, an advertisement notice must be published in two newspapers. Auditors reviewed a judgmental sample of 135 vehicles advertised for auction, but DOF could not locate files for 20 of the vehicles. Of those for which there were records, none had a printed notice in the newspaper as required. Also, 36 of the 115 vehicles were auctioned in the Bronx, but none met the two newspaper publication requirement.

DiNapoli’s audit included several recommendations, including that DOF:

• Return overages to the former vehicle owners or lienholders having obtained court orders.
• Determine the cause for the difference between the amount of auction proceeds applied to outstanding judgments and the amount actually paid to satisfy the judgments.
• Ensure that poundage and execution fees for each auctioned vehicle are correctly calculated and verified. Develop written procedures for disbursement of auction proceeds and recording and reconciling the revenue/collection.
• Identify the judgment debtors to whom the judgment payments should be applied.
• Advertise auctions at least six days prior to auction, and for Bronx County auctions, advertise in two newspapers.
• Ensure that critical documents such as the check print file, which supports that payments were made as required, are maintained and provided during an audit; and
• Ensure that all funds due to the city are appropriately transferred, recorded and reconciled.

DOF generally agreed with the audit’s findings and indicated it was taking steps to implement the recommendations. The department’s complete response is included in the report.

Report

New York City Department of Finance: Controls Over Auctioned Vehicles