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Administrative and Indirect (overhead) Expenses - <br /> Tables 1 and 2. Several issue azose for city oflYCials in reviewing this. section. - We have 'a major. <br /> concern with the value of Table l . Computing administrative and indirect costs as a percentage ~ ` <br /> of total funds received is a less accurate gage than calculating these costs as a percentage of ~ . <br /> expenditures. Administrative and indirect cost expenditures'aze driven by doing the work <br /> (malting the expenditures), not by receiving revenue. In addition both chart 1 and 2 are <br /> misleadin .Thee enditures com risin the indirect overhead doll <br /> g xP P g ( az fi include eneral <br /> g <br /> engineering costs reported on the 1997 Local Road and Street estionnaire ~in e ' <br /> Qu s coon II.A.3.b. <br /> General Engineering, but aze integral to operating an urban transportation system (i.e. traffic ~ - <br /> engineering).. Reporting theses operating expenditures as `overhead ~giyes a ~-false picture to a - <br /> - _ <br /> la - - <br /> erson. A true ~ e ver <br /> r of Indirect O head is re orted <br /> YP on A.a.3.c <br /> g~ ( P Makin 'this Chan a would <br /> g g <br /> - <br /> amt a more accurate icture for exam le the"Ci of E " ' <br /> P p p ty ugene s percentage for Indirect <br /> (Overhead) would decline by~approximatelyl5%. _ . ..~.r _ . <br /> ~T <br /> - - - <br /> \tf. <br /> - - . _:x. _ a _ _ _ - <br /> D. Economy and Reasonableness of Administrative and Indirect (Overhead) Expenditures: <br /> _ , <br /> n.. n <br /> F' <br /> u-st P h. The assertion that addin more funds to the .ot is n „ <br /> <br /> I' y <br /> az'~P g of necessaril true it <br /> P <br /> depends on the type of work that will be performed with`those funds; = r ' ~ - ~ . <br /> Fourth paragrraph. We have several concerns regarding this paragraph.`~Using contractors <br /> exclusively still results in administrative costs in supervising and letting contracts. Low reported <br /> administrative expenses in the Highway Fund may notaccurateiy reflect that these costs were <br /> absorbed by another city fund. In addition some cities and counties that ale significantly lazger <br /> than "small" have low administrative expenses. This is often due to the way thelocal <br /> government records the chazges. This calls into question the whole paragraph. <br /> Summary and Recommendations ~ . <br /> A. Reporting of State Highway Funds - ~ <br /> We support a cooperative effort with ODOT and the Association of Oregon Counties to revise . <br /> the Local Road and Street Questionnaire to provide cleazer guidance as to what should be <br /> reported in various different categories. - - - <br /> B. Specifically Identifying State Highway Fund Expenditures - <br /> We do not believe that this is a necessary requirement and appears at odds with the <br /> recommendation F "To formalize the use of commingled funds." The local Highway fund as <br /> well as all local funds of a jurisdiction are subject to an annual audit. It appears that this <br /> recommendation would add another administrative record keeping exercise with no appreciable <br /> gain. <br /> C. Revise Requirements for Accumulation of State Highway Fund Monies. <br /> _ <br /> _ _ _ _ _ _ <br /> <br />