98 Local Agency Audit of Hwy Trust Funds

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.f Local Agencies' Use of Highway Funds Performance Audit ADMINISTRATIVE AND INDIRECT (OVERHEAD) EXPENSES (Continued) ' D. Economy and Reasonableness of Administrative and Indirect (Overhead) Ex enditures. P Commin lin funds impacts the measurement of administrative and indirect (overhead) 9 9 _ _ expenses. This is normally expressed in terms of a percentage of total expenditures and when the base is made. larger by adding more funds into the "pots the resulting percentage number is lower. This makes drawing conclusions from -raw percentages less meaningful and tends to make the analysis more :difficult.: Table 1 expresses administrative and indirect (overhead) expenditures as a percentagetotal of all funds - received into the appropriate road fund for our sample during fiscal 1996-97: ~ Table 2 .depicts the same .costs as they relate to the expenditures from the respective :road funds in the same time period. _ ~ ~ - - ~ - ~ - . - . The following statistics apply as a percentage of total road funds received by entity. . , "Counties - Mean Median Range Administration ~ 5.0 5.0 2-9 - Indirect (Overhead) 6.5 6.5: 2-20 . ~ Administration and Indirect (Overhead) 11.5 .11.5 424 i . . Cities Mean Median Ran e ~ Administration 6.5 4.0 0-18 ; Indirect (Overhead) 6.5 2.0 0-23 ,'a Administration and Indirect (Overhead) 13.0 6.0 0-29 { I ~ These statistics are derived from the calculated percentages for each of the entities in I Table 1. They give equal weight to each city and county without regard to their size. i This accounts for the fact that although the mean percentage of total administration and I i indirect (overhead) in our sample calculated above is 13 percent, the weighted average 1' ~ Talbot, Korvola 8 Warwick, t.rp 21 _