Accounting for Highway Expenditures

ARIZONA HIGHWAYS ACCOUNTING FOR HIGHWAY EXPENDITURES Showing What Portion of State Money Is Required to Match Federal Aid By JOSEPH M. KALLA, Assistant Accountant

The purpose of this article is to acquaint the general public with what is being done by the Arizona Highway Department with the different classes of funds or monies we receive and how it is being expended; what benefits the state of Arizona derives from taking advantage of Federal Aid allotted to Arizona each fiscal year by the fed-eral government and what proportion the state has to furnish to match the Federal Aid funds.

The following notes will explain the various plates exhibited herewith: Plate No. 1: Shows expenditures for a period of five years on all Federal Aid projects constructed or under con-struction, and percentage of Federal Aid monies and state monies applied against total amount expended for construction.

You will note that the percentage of Federal Aid received during fiscal years of 1927-28, 1928-29 and 1929-30 was not as great as the fiscal years 1930-31 1931-32. The reason for this was the Arizona Highway Department was not prepared to take advantage of all Fed eral Aid monies allotted, as we had not completed locating all our federal sys-tems. As we do not receive Federal Aid money on location projects the state has to stand the whole cost of location work.

However, during the period of 193081, 1931-32 our location program was almost completed, except for one or two location crews on small projects. Thus the percentage of Federal Aid funds increased as high as 81.4 per cent against state funds of 18.6 per cent, and the total average for the five year period was, Federal Aid funds 69.8 per cent, state funds 30.2 per cent, which shows that we cannot afford to lose one dollar of our Federal Aid funds. Our construction program may cease completely if we do not raise sufficient state funds to match Federal Aid monies allotted to us eachfiscal year by the federal government.Plate No. 2: Shows the various items which make up the total cost of constructing our state highways, both federal and state systems, for period of two years. (Plate on p. 14).

This plate gives you the overhead of our supervision cost of project under construction engineering construction. You will note that the overhead is only 9.10 per cent. The federal government allows 10 per cent of the total cost of a project, of which we receive an average of 79.62 per cent Federal Aid money. This only shows the average cost of supervision. We do not claim the percentage of supervision on every project constructed is the same, as we have some that will run as high as 11 per cent of the total cost of the project and some as low as 7 per cent.

"State Forces" means work performed by the Highway Department employees on various construction projects, both federal and state systems, on which no Federal Aid money is received and the state has to stand the entire cost of the project. The class of work performed by State forces is similar to work that is contracted, but on account of the smallness of the project and certain items that have to be done on regular Federal Aid projects in which the federal government will not participate, it is cheaper to do this, work by state forces than by contracting. The limit allowed by law for expenditures on this class of work is $50,-000 upon any one project. The same applies to rights-of-way, purchases, location engineering and plans, which are drawn and approved before a construction project can get under way.

Per cent is equipment rental, which is charged upon equipment used by the various maintenance sections, and the rental of that equipment pays for the cost of overhauling equipment whenever the occasion arises. Next is material and supplies, which consist of signs, fence-posts, road-oil, wire, jetties, and many other miscellaneous items. Next is equipment repairs and parts. Anything over one hundred dollars of this cost is paid by the Equipment Department, which receive the rental payments. Next is gasoline and oil used to operate various types of maintenance equipment, such as trucks, motor graders and caterpillars. (P. 17).

Plate No. 4: Shows how the Arizona Highway Department dollar was expended for a period of two years,July 1, 1930 to July 1, 1932. (P. 21). During these two years the expenditure of the Department was the largest in its history; it amounted to $14,-283,249.00, of which we received $7,-114,396.95 in Federal Aid monies, or .49 cents out of every dollar expended.

You may note that out of every dollar expended by the Department 55 cents went for the payment of con-tracts obligated by the Department for the construction of our highways. Our payrolls cost us 27 cents out of every dollar expended. Prior to the time that highway construction was done by con-tract the cost of our payrolls was 70 cents out of every dollar expended. Material and supplies cost us 9 cents of every dollar expended, which in-cluded all materials and supplies turned to the Highway maintenance shops, construction and all our clerical supplies. Gas, oil and grease cost us .02 cents out of every dollar, and this keeps moving the 496 pieces of equip-ment that the Department owns. The purchase of new equipment costs us Plate No. 3: Shows the various items that make up the total cost of main-taining our state highway system for a period of two years. Labor takes up the highest percentage of the mainten-ance dollar because practically all work done is labor. The next highest per0:2 cents out of every dollar expended. Right-of-way costs .01 cent of the dollar; we cannot build highways until we purchase the right-of-way.

Expense accounts, or travel, cost us .01 cent out of the dollar. This defrays the traveling expenses of all com-missioners, engineers, foremen, auditors and highway patrolmen, and is reimbursed to them for money actually expended in performing departmental business away from the point where they are established. The miscellaneous items cost us .0075 mills out of every dollar; these items include telephone, telegrams, freight and express, light, water power, license plates and office furniture and equipment.

ARIZONA HIGHWAYS

Plates No. 5 and 6: These two charts show a comparative statement as to earnings of Federal Aid monies on regular Federal Aid projects and Federal Aid projects carrying emergency Federal Aid. These two charts were drawn to compare the earnings of Federal Aid monies on ten regular Federal Aid projects and ten regular Federal Aid projects with emergency funds. As you may note by these two charts we gained almost 3 per cent in our Federal Aid on every emergency project over regular projects. The cost of these projects were taken fromthe time they began until completed, with the total of Federal Aid earned against each project. (Ps. 17 and 18). Plate No. 7: Shows the percentage of net gasoline taxes collected in each county and the portion of the total amount collected which the counties and state received. (P. 14). Maricopa County is the greatest con-tributor of gasoline taxes of any coun-ty; next is Pima, on account of denser population in these counties. The percentage received by the state amounted to 65.15 per cent. During

FEBRUARY, 1933

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FISCAL YEAR 1927-8 ARIZONA HIGHWAY DEPARTMENT

CHART SHOWING EXPENDITURES FROM FEDERAL AID FUNDS AND STATE FUNDS FOR CONSTRUCTION ON FEDERAL AID PROJECTS FROM JULY 1st 1927 TO JUNE 30 1932

FISCAL YEAR 1928-9 FISCAL YEAR 1929-30

FEDERAL AID FUNDS 55.8 % $ 422, 436.01

FEDERAL AID FUNDS 59. % $ 1,309,267.51

FEDERAL AID FUNDS 58.6 % $ 1,658,342.35

STATE FUNDS 44.2 % $ 334,105.21

STATE FUNDS 41 % $ 907, 373.99

STATE FUNDS 41.4 $ 1,167,545.94

TOTAL $ 756,541.22

TOTAL $ 2,216,641.50

TOTAL $2,825,888.29

FISCAL YEAR 1930-31 FISCAL YEAR 1931-2 JULY 1st, 1927 to JUNE 30, 1932

FEDERAL AID FUNDS 72.9% $3, 559, 701.51

REGULAR FEDERAL AID FUNDS 54.6 % $ 2,384,414.44

TOTAL FEDERAL AID FUNDS 69.8 $ 10,504,642.82

STATE FUNDS 27.1 % $1,321,852.80

STATE FUNDS 18.6% $807218.53

EMERGENCY FEDERAL AID FUNDS 26.8% $1,170,482.00

TOTAL STATE FUNDS 30.2 % $4,538,096.47

TOTAL $ 4,881,554.31

TOTAL $4,362,113.97

TOTAL $ 15,042,739.29