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SUMMARY
The Auditor General has developed the following information
and, where appropriate, recommendations:
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Some Gila County Road Fund expenditures are
questionable—This audit questions the appropriateness of some expenditures
made from the County’s Road Fund, and found that some expenditures also
violated the Arizona Constitution. The County combines similarly restricted
transportation revenues, including the excise tax, into one fund known as
the Road Fund. Auditors reviewed a random sample of 80 Road Fund
transactions made during fiscal years 2000 and 2002 and a judgmental sample
of 89 Road Fund transactions made between January 1998 and December 2003 and
determined from the judgmental sample that the County has used more than
$46,000 of the Road Fund monies to pay for items that do not meet the
definition of street and highway purposes. For example, the County used Road
Fund monies to help finance the County’s rodeo and to make donations to
private charities. The samples auditors reviewed were designed to identify
the types and proportion of questionable expenditures, but were not designed
to determine the total dollar amount of inappropriate expenditures.
Therefore, the County should determine the magnitude of monies spent
inappropriately, and needs to essentially reimburse the Road Fund
accordingly with revenue from its General Fund or other unrestricted
sources. In addition, the County should work with the county attorney to
establish in policy the types of expenditures that are appropriate uses of
Road Fund monies.
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Gila County needs to take steps to better demonstrate the
impact of the tax—The excise tax provides nearly 37 percent of the County’s
road tax revenues; however, the precise impact of the tax is unclear because
the County lacks key documents that could help demonstrate impact. The
County is taking several steps that will allow it to more clearly
demonstrate impact and should continue its efforts. First, the County is
drafting a county-wide transportation plan that will identify and prioritize
all transportation improvement projects and help to formalize its
transportation project planning process. Second, the County is implementing
a recordkeeping policy that county officials indicate will help ensure it
has comprehensive records for contracted road projects. Finally, the County
is upgrading its computerized accounting system, which will enable it to
track excise tax expenditures separately from other Road Fund expenditures
so that it can document how excise tax revenues are spent.
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