98 Local Agency Audit of Hwy Trust Funds

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Local Agencies' Use of Highway Funds Performance Audit INTRODUCTION ~ - -Talbot, Korvola & Warwick, ~~P (TK1N) and its subcontractor Coopers & Lybrand, LLP., under, contract - to .the ~ Oregon Secretary of State Audits -Division, conducted a performance audit of Local Agencies Use of State Highway Funds. This report outlines - findings and recommendations based on our work. i EXECUTIVE .SUMMARY , _ _ , . - _ The purpose of.this,audit is to provide the Oregon Legislative Assembly, governor,-local . - agency officials and the public with-summary information on local agencies" ,use of State Highway Fund monies received under ORS 366.524. To provide this, information the Secretary of State Audits Division in conjunction with TKW selected 10 counties and 15 cities for this audit. - ~ ~ - _ _ - Our audit procedures were designed to meet the following objectives: - _ 1. Test the adequacy of intemal control over State Highway Fund monies. 2. Test compliance with expenditure restrictions enumerated in the Oregon Constitution and state statues. ~ - - 3. Determine how Oregon cities and counties used State Highway Fund monies. 4. Determine the amount and proportion of State Highway Fund monies used for administrative and indirect (overhead) expenses. 5. Develop specific recommendations. - We found the intemal contro( systems established and maintained by these counties and cities were adequate to properly safeguard, record and report on monies received i and expended. We also found that counties and cities had substantially complied with statutory restrictions for the expenditure of State Highway Fund monies. Perhaps the key ftnding of our engagement was that cities and counties in the state tend to commingle State Highway Fund monies with monies from a variety of other Talbot, Korvo/a ~ Warwick, u~ 1