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SUMMARY
The Office of the Auditor General has conducted a performance
audit of the Gila County Transportation Excise Tax (excise tax) in accordance
with and under the authority vested in the Auditor General by Arizona Revised
Statutes (A.R.S.) §41-1279.03. As required by statute, this audit reviewed past
and future planned expenditures and projects to determine their impact on
solving transportation problems and whether the excise tax revenues are used
only for highway and street purposes or transportation projects specified in
Gila County’s (County) regional transportation plan.
County has taken steps to better
demonstrate tax’s impact (see pages 5 through 7)
The County has taken some steps since the Auditor General’s
2004 audit (see Report No. 04-L2) to better demonstrate the impact of the
transportation excise tax and is taking additional steps to do so. Until March
2009, the County combined similarly restricted transportation revenues,
including the excise tax, into one fund, known as the Road Fund. The excise tax
revenues represent about 37 percent of the transportation revenues the County
receives, and according to a county official, since fiscal year 2004, the County
has used more than $6 million in Road Fund monies to complete nine road
projects. Since the last audit the County’s Public Works Division adopted a
project records policy designed to provide standardized recordkeeping for all
expenditures related to road construction and maintenance projects. In addition,
the County conducted a small area transportation study (study) designed to
develop a 20-year transportation plan, and in November 2006 the County adopted
the study as its long-term transportation plan. Further, in March 2009, the
County established a separate fund in its new accounting system so that it can
separately track excise tax expenditures and better demonstrate the impact of
the excise tax.
Last audit identified inappropriate expenditures,
but new county policy has largely corrected these
problems (see pages 9 through 13)
The 2004 audit found that the County had used Road Fund
monies to pay for items that did not meet the definition of highway and street
purposes, such as expenditures made to finance the county rodeo. The County’s
subsequent review of Road Fund transactions and supporting documentation for
fiscal years 1999 through 2004 determined that approximately $390,000 had been
spent inappropriately. Following the last audit, the County created a
Road-Fund-Use policy that has helped ensure that excise tax monies are spent
appropriately. However, this current audit found some other questionable
expenditures, mostly in the form of credit card purchases for food for employees
not in travel status. The Division should work with the County Attorney to
determine the appropriateness of the questionable expenditures, including
updating its Road-Fund-Use policy and how to repay any monies spent
inappropriately. In addition, the questionable credit card expenditures appear
to exist because the County has not been consistently following its own travel
policy, and the policy could provide greater direction to its employees.
Therefore, the County should work with the Country Attorney to revise its travel
policy to provide adequate guidance to employees in travel status.
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