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Local Agencies' Use ofi Highway Funds <br /> Performance Audit <br /> EXECUTIVE SUMMARY (Continued) ~ - <br /> 5. One city recorded State Highway Fund monies in the general fund instead of <br /> state tax street or road fund. (See Intemal Controls Section D). <br /> 6. One county used commingled monies, which may -have included State <br /> Highway Fund monies, to construct an .office building. (See Compliance With <br /> Laws and Regulations Section). . <br /> We found that there are no established criteria to determine the economy and <br /> reasonableness of administrative and indirect (overhead) charges against commingled <br /> road fund monies. It is not possible to `arrive at.'direct ~ conclusions regarding the <br /> economy and efficiency of administrative and indirect (overhead) expenses against all <br /> - <br /> monies used to pay for road and street programs._ <br /> Appendix A provides other findings, .which we ,believe are not material to the <br /> compliance by the selected counties and cities with constitutional -and regulatory <br /> requirements. _ <br /> SCOPE AND METHODOLOGY <br /> Our scope and methodology were specifically designed to meet the requirements of the <br /> RFP. It focused on the folbwing: <br /> 1. Determining the definitions for the terms administrative and indirect <br /> (overhead) expense. (See Definitions Section). _ _ . <br /> 2. Utilizing the sample of counties and cities selected by the Audits Division and <br /> TKW to test Intemal control and compliance. (See Selection of Counties and <br /> Cities Section). <br /> 3. Providing an overview of (See Overview Sections A-F): <br /> <br /> j a. How State Highway Funds monies are distributed to counties and cities. <br /> b. The amount of State Highway Fund monies. distributed to counties and <br /> cities in fiscal 1996-97. <br /> i <br /> Talbot, Korvola & Warwick, u~ 3 <br /> <br />