98 Local Agency Audit of Hwy Trust Funds

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Local Agencies' Use of Highway Funds Performance Audit ~ INTERNAL CONTROLS (Continued) - ~ - j B. Adequacy of Documentation for Payments. (Continued) f the recei t of nods and services. We also nds and verification o p 9 release of fu determined that the payments were properly classfied; recorded in the proper period and were reasonable in regard to contractual obligations, laws and regulations. The results of our work indicated that.,sufficient documentation existed to support the payments, they were properly classified, recorded 'in the proper -period and were reasonable in regard to contractual obligations, laws and regulations.. C. Segregation of Duties. The adequacy of proper segregation of duties over the disbursement of State Highway Fund monies, was found to be directly proportional to the size of the city or county in our sample. We found, in general, that cities and counties with a population less than 10,000 did not have the personnel required to adequately segregate the duties for the purchase, payment, mailing of checks, recording and reporting of State Highway Fund monies. However, in these instances there are generally compensating controls in i place to assure that all payments were reviewed for propriety. =These compensating controls- included a review of each payment by members of a city council or board of county commissioners prior to the checks being mailed. For cities and counties of more than 10,000 it appeared that an appropriate segregation of duties exists between the approval for purchase, payment, mailing of checks, recording, and reporting of State Highway Fund monies. ~ - - D. Cost Accounting System. Nine counties in our sample, as required by ORS 368.051, had established a cost accounting system. One county did not have a cost accounting system in place during 1996-97 due to a computer failure, however the cost accounting system was re- established for 1997-98. i Talbot, Korvola 8 Warwick, uP ~ 5