Severe deficiencies in employee training and internal polices and procedures have left the fleet services arm of the Memphis, Tenn. Division of General Services open to possible fraud and theft, according to The Commercial Appeal.

The problems with the fleet services resulted in around $700,000 in unaccounted revenue over the last nine-month period, according to an audit by Memphis-based Thompson-Dunavant PLC.

Last year, the fleet services branch oversaw 90 contracts totaling over $20 million.

The audit stated the problems impaired the General Services Division's ability to "properly analyze fleet services performance and sustainability" and added that revenue and expenses might not be properly allocated.

Adding to the division's problems is the fact that former fleet services manager Arthur Adams submitted his retirement papers earlier this month after being arrested on charges of driving under the influence, reckless driving, and public intoxication.

Federal investigators have shown interest in at least one of the 90 contracts the fleet services branch oversaw, with a company called Around Town Tire. The company received $2.6 million since 2004 to fix flat tires, creating charges that exceeded annual budget estimates by hundreds of thousands of dollars.

In addition, Around Town Tire submitted invoices that seldom had required signatures. The company charged the city $1,200 to repair 20 flats on the same police car over a 23-month period ending November 2008.

Auditors asking for the fleet services' policies and procedures on internal controls related to vendor contracts were told that the department had no such policies and that they relied on a finance division policy and procedure manual from 2001.