Objectives

To determine whether the New York City Department of Finance has adequate controls over the cash proceeds from the New York City Sheriff’s Office’s vehicle auctions and to determine whether DOF provides vehicle owners the opportunity to settle their debts or work out a payment plan, allowing them to retrieve their vehicles before they are auctioned. The audit covered the period from July 2020 to June 2025.

About the Program

The NYC Department of Finance (DOF) collects the revenues that make every New York City (NYC or City) service possible. Through the NYC Sheriff’s Office (Sheriff’s Office), DOF acts as the City’s chief civil law enforcer. The mission of the Sheriff’s Office is to serve and execute legal processes, mandates, and orders issued by the courts and legal community, and to protect the general public by enforcing laws pertaining to public safety.

NYC parking regulations, which are part of the City’s Traffic Rules and Regulations, direct where vehicles can stop, stand, and park in the City. A notice of parking violation may be issued to the registered vehicle owners of any vehicles that are left in locations not in compliance with the City’s rules and regulations. For purposes of this report, the notice of parking violation will be referred to as a ticket.

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 Sheriff’s Office, a division of DOF, may immobilize the vehicle by attaching a clamp, known as a “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 towed. The Sheriff’s Office’s procedure is to immediately tow vehicles with $2,500 or more in judgment debt, vehicles with invalid vehicle registration, vehicles that have been abandoned, or vehicles causing a public safety issue, such as parked too close to a fire hydrant.

The Sheriff’s Office’s policy requires the Sheriff to send out notification letters to all of the last known registrants, title owner, and lienholder within a reasonable amount of time before the scheduled auction date. DOF contracts with an auctioneer to conduct auctions of these seized vehicles. At auction, vehicles are sold to the highest bidder, who must pay in cash. For vehicles with a judgment debt, proceeds from the auction—after all expenses (auction fee, advertising fee, tow fee, labor costs to remove license plates, storage fee, execution fee, and poundage) are paid—are used to pay off the judgment debt. After all expenses are paid and the judgment debt is satisfied, any money left (known as “overage”) must be paid to the original owner or, if there is a lien against the vehicle, the lienholder.

During the period from July 2020 through May 2025, the Sheriff’s Office advertised 1,446 vehicles for auction at 45 auctions.

Key Findings

While DOF is required to return all auction proceeds remaining after expenses have been paid and judgment debts have been satisfied, deficiencies in accountability resulted in DOF not returning overages totaling $464,710 to vehicle owners since March 2023. Additionally, failure to apply funds to judgment debt payments resulted in some debtors incurring added interest amounts for judgments that should have been satisfied.

DOF overcharged a total of $2,086 and undercharged $1,104 in poundage fees, which are set at 5% of the sale price, for a sample of 135 vehicles. In one such instance, the poundage fee was 86% of the sale price, rather than the required 5% (an $863 poundage fee was charged for a vehicle sold for $1,000).

We identified a lack of written procedures that contributed to these deficiencies. In response to our preliminary findings, DOF stated it would strengthen its internal controls to improve efficiency and transparency in its processes.

Key Recommendations

• Return overages to the former vehicle owners or lienholders.
• 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. Provide training to appropriate staff.