The Chattanooga City Council on Tuesday approved a five-year contract for fleet management software worth up to $750,000. The purchase is aimed at giving city leaders more oversight into the department roughly two months after an internal audit revealed more than $1 million in unauthorized spending on automotive parts.
Officials said the department is actively working to address the problems identified in the audit, and some procedural fixes have already been implemented.
Following the August audit, two city employees were placed on leave, and the city announced it would be conducting an investigation into the spending. City spokesperson Stephanie Cepak later announced that both employees had resigned, though she declined on multiple occasions to name the pair.
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On Tuesday, the council approved a resolution entering into a five-year contract with OpenGov Inc., capped at $150,000 annually, for fleet management asset software. According to OpenGov’s website, the software can help the city track vehicle maintenance and optimize fleet utilization with real-time data and mobile work orders.
The new software also tracks fuel consumption, maintenance history and the cost of parts for individual vehicles.
The internal city audit specifically flagged departmental automotive parts spending as needing additional safeguards. Between 2022 and 2025, the fleet management department — which oversees two garages and maintains the city’s fleet of vehicles — spent more than $1 million more than what was previously agreed upon in a contract, a fact the audit attributes to unchecked purchasing card spending.
Staffs usage of the cards violated policy, according to the audit, since the cards are not meant to be used for buying goods under negotiated contracts. In addition, these overages further violated city policy as they bypassed the City Council, which is required to approve all contracts over $50,000, auditors said.
Auditors recommended department employees stop using purchasing cards for items already under contract and policies be developed to not only better monitor spending but to ensure that the city is paying contractually agreed-upon prices for parts.
A second full audit of the department prompted by the first, the former of which concluded a month ago, found that the overage was $5,000 more than previously believed, totaling roughly $1,072,000 over the four years tracked in the audit.
Errol Williams, a spokesperson for the city’s Public Works Department, said via email that changes have already been implemented in response to the initial audit. He said purchasing card use is now only permitted for items not covered by other preexisting contracts, with a new tracking mechanism in place for all purchases.
He said Tuesday’s software purchase represents an additional tool to help staff better track vehicles and any new parts those vehicles require.
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“This software will provide a seamless tracking mechanism for assets coming in and going out. It will provide mechanics with more enhanced system inputs for tracking parts utilization and associated costs,” Williams said. “It will also allow executive leadership to check asset management at any point, making adjustments and making accountability much easier.”
The council took additional action at Tuesday’s meeting to shape the future of fleet spending. It approved an agreement split among three vendors for medium and heavy duty vehicle parts: Dalton Trucking, Thompson Truck Group and MHC Kenworth.
The agreement extends over four years with an annual spend estimated at $1.2 million.
The council’s agenda noted that the award is going to multiple vendors to allow fleet staff to compare prices and timelines when making purchasing decisions.
Council member Jenny Hill of North Chattanooga said at last week’s meeting that the departmental changes are part of a broader effort by the administration of Mayor Tim Kelly to strengthen oversight of the department.
“The administration has identified that fleet is one of the last remaining departments that really needs a hard look,” Hill said.
Hill said recent departmental changes have helped remedy the situation.
“I would say that I think recognizing that an audit was necessary was important,” Hill said. “And then to look into the results of that audit and be willing to do the hard work to start righting the ship was important. So that’s obviously a step in the right direction.”
Contact policy and public impact reporter John P. Boan at jboan@timesfreepress.com.