98 Local Agency Audit of Hwy Trust Funds

New Search

John Lattimer August 28, 1998 _ Page 3 - . , - ~ _ . _ . - We do not believe this is a necessary requirement. To implement this recommendation would require a major change to the chart of accounts of jurisdictions for no beneficial reason.` This recommendation also conflicts with the recommendation for commingling of funds. Reference is made to ORS 368.705 (2) which says the general road-fund _ ~ ' mentioned in sub-section (1) of this section shall be used: (a) In establishing, laying out, opening, surveying, altering, improving, constructing, ~ ~ maintaining and repairing county roads and bridges on county'roads; or _ ^ . , _ (b) _ ~ .r Additionally reference is made to Article IX Section 3a of the Oregon Constitution which provides the restrictions for using State Highway Funds exclusively for the construction,. reconstruction; im rovement, repair, maintenance, operation-.and use ,of public highways,- ' py.; roads, streets and roadside' rest areas in this 'state'and .further provides ui section"(2) (a) that-the State,Highway Funds may also be°used.for;the"cost of adm~nistrafion-and any refunds or credits authonzed by law ORS 294 055 in'part states that money~received from the Federal Govemment under the. Mineral Leasing Act shall be used =for the ~ _ - - 'construction and maintenance of ~publ~c roads ~n such ~count~es:~ ~~ORS 294.060 in' part ;r - states that the moneys;receNed by each county~from federal forest reserves shall be , divided 7b percent~to the_road .fund and, 25,percent to the school.fund of the county and, subject, toaubsections (2} and (3) of this section, the moneys shall be ezperided.as other moneys in those femds are:~expended. ~_ORS _294.065 states`that the moneys received from the Federal Government under'the Federal Flood Control act shall be used for the benefit of 'the public schools and public roads of the counties receiving the funds. ORS 272.085 says in part the funds received from the Federal Government as the funds from the five percent of proceeds of sales of public lands and materials on those lands shall be used for the benefit of the public roads and bridges of the recipient county. All of these funds as well as the State Highway Funds are used for the same purpose and we therefore do not 'see the necessity of specifically identifying the use of State Highway Funds. This recommendation also suggests an annual certification on use of State Highway Funds. ' As stated in the Overview of this audit OAR 162-10-295 requires the independent public accountant to comment in the annual audit report on compliance with Article IX, Section 3a of the Oregon Constitution pertaining to the use of monies from taxes on motor vehicle use fuel taxes and compliance with statutory requirements pertaining to the use of State Highway Fund monies. This additional certification is of no beneficial use and there is no need for duplication. _ D. Recommendation to Establish Administrative and Indirect (Overhead) Criterion. We agree with the first paragraph, particularly the statement that specific allocation percentages cannot be established and the reference to "reasonable". We agree that criteria and parameters (if they are different) should be established. The first step would be to agree on definitions for administration and indirect (overhead). In establishing criteria ;t for indirect costs reference could be made to guidelines of the Office of Management and Budget (OMB) covered in Circular A-87, Attachment A, "State and Local Indirect Cost Rate Proposals." Assistance in establishing criteria for administration may be available from other states accounting guidelines or from GAAP. 1 's