98 Local Agency Audit of Hwy Trust Funds

New Search

Local Agencies' Use.of Highway Funds _ Performance Audit ADMINISTRATIVE AND INDIRECT,(OVERHEAD) EXPENSES _ _ A. Definitions. As previously mentioned, in conjunction with the_Secre#ary of State Audits Divisions, we .defined the terms Adminisfratiye and Indirect (Overhead) Expenses as follows:.~~::: ~ _ . . _ _ .,r _ - - 1.~ Administrafion - DirectNadmiriistration `costs allocated as ~ road expenditures _through ~a~ consistent distribution formula, ouch as the public works ~ director and related support staff I.'..C .r. vod Y 2. Indirect (Overhead) ~ . a. ~ Indirect ~"administration ` costs, ~ such as i accounting, ~ ,financing and , - ~ _ _ t. purchasing - b. Engineenng~ costs that cannot be` allocated directly to construction, maintenance or operations. ~ : ~ _ c. Transfers or charge backs to the General Fund or other funds. S3 _ _ _ - - y.~ ~ _ _ _ _ _ These definitions were utilized in~ de#ermining what portions of State Highway Fund monies were spent on administration and indirect~(overhead) by the cities and counties included in our sam le: : ; _ , _ ~ ~ ~ P _ _ . B. Criteria for Assessing the Economy and Reasonableness of Administrative and !n i enses. - ~ - d re d Ex ct (Overhea) p . The GAO Yellow Book (9994 Revision) defines criteria as ...the standards used to ~ ~ ~ determine whether a program meets or exceeds expectations. ...In selecting criteria, r:-; auditors have a responsibility to use criteria that are reasonable, attainable, and relevant to matters being audited." These criteria may include technically developed standards, prior years' performance, performance of similar entities and performance in . the private sector. For purposes of this audit, there are no technically developed Ta1bo~ Korvola & Warwick, !1P 18