This report provides the results of our audit of motor fuel tax moneys distributed to selected counties during the period October 1, 2002, through September 30, 2003.  Our audit disclosed the following:

Finding No. 1:  Nineteen of the 20 counties tested did not maintain, through the use of separate funds, separate general ledger codes, or some other means, accounting records to provide separate accountability for each type of fuel tax received and expended.

Finding No. 2:  Ten of the 20 counties tested used fuel taxes for unauthorized purposes, including $14.3 million for indirect costs.  The use of fuel taxes for indirect costs is questionable under current law.  Because there are legitimate indirect costs that may be associated with transportation functions specified in the various statutes that specify the authorized uses of fuel taxes, the Legislature should clarify the appropriateness of using fuel taxes for such costs.

Finding No. 3:  Simplification and clarification of the Legislature’s intent as to the proper use of fuel taxes, and consolidation of these laws, would simplify the recordkeeping requirements and provide greater assurance that fuel taxes are used by counties for authorized purposes.

All responses can be viewed in their entirety on the Auditor General Web site.