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Local Agencies' Use of Highway Funds . <br /> Performance Audit <br /> 1 <br /> COMPLIANCE WITH LAWS AND REGULATIONS ~ <br /> We reviewed the expenditure documentation and fund transfer records of the selected <br /> counties and cities to determine their com liance .with Article <br /> p IX, Section 3a of the <br /> Oregon Constitution, ORS 366.542, 366.790 and 366.815. = Our-review was performed <br /> using dollar-unit sampling technique with a 90 percent confidence level and a 5 percent <br /> tolerance rate. This typically resulted in a sample size of 46 or 47-transactions for each <br /> city and county to be reviewed for compliance with laws and regulations.+ <br /> The cities and counties in our sample typically, were. unable to -specifically identify <br /> expenditures for road and street operations that were solely funded by. State Highway <br /> Fund monies. This resulted from the commingling of other monies in the funds' <br /> accounting for the use of State Highway Fund monies. ' We identified two- instances <br /> where specific expenditures :from the commingled monies, appeared not to be iri <br /> compliance with constitutional and statutory requirements for the expenditure of State <br /> Highway Funds monies.. One of these, expenditures out of a :city's ~ road fund for <br /> Christmas tree lighting, was clearly. immaterial ($200) in regard to the total fund balance <br /> ~ and State Highway Fund monies. The other instance was potentially material. Orie <br /> county expended $1,276,733 out of their commingled county road fund monies for a <br /> building primarily dedicated to road and transportation. Total State Highway Furid <br /> monies received were $7,575,577 and other monies received in the county road fund <br /> were $6,080,299. Currently the building is occupied by the Oregon Department of <br /> ~ Transportation (69 percent) and the county's road department (31 percent). <br /> This example highlights the difficulty of determining whether a county or city has <br /> <br /> ~ complied with legislative intent when monies out of a commingled fund are used for <br /> purposes that do not strictly comply. <br /> Other instances of noncompliance have been summarized in Appendix A. <br /> Talbot, Korvola 8 Warwick, t1P 17 <br /> <br />