Auditing the ’Cash-for-Clunkers’ Program
Many WANADA member dealerships may be struggling to obtain reimbursement for Cash for Clunkers transactions, but you should know that the audit process for this program is underway nonetheless. The National Highway Traffic Safety Administration (NHTSA), which administers the program, says dealers should not be alarmed as this is a standard part of the process. It also notes, however, that dealers should be prepared for the process.
There will be three levels to the audit, and their goal will be to complete each level for all dealers before moving to the next level.
Level 1 = Basic check to verify the dealership’s eligibility as a licensed new car dealer. The auditor will need to verify its franchise agreement, state dealer license, and will review some completed deals to ensure the documentation is in order.
Level 2 = Audit of the paper trail from the dealership to the salvage/recycling company, to ensure the mandated key components of the clunkers have been properly destroyed.
Level 3 = This level of investigation will only take place if there is any evidence of fraud, and would be handled by law enforcement officials from the Office of the Inspector General.
WANADA dealers should also remember to keep records of all transactions under the CARS Act and regulations for a period of five calendar years from the date on which they were generated or acquired.
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