ORS 297.466¹
Auditor statement required
  • procedure for determining and correcting deficiencies
  • withholding of state funds

(1) In performing an audit and review required under ORS 297.425 (Annual audits required), the accountant under contract with the municipal corporation or the Secretary of State, whoever performs the audit and review, shall determine if the municipal corporation has, or has not, followed generally accepted accounting principles in reporting its financial condition and operations, established appropriate accounting systems and internal controls and substantially complied with legal requirements in conducting its financial affairs. The determination shall either be included in the signed expression of opinion or otherwise disclosed in the audit report required under ORS 297.465 (Standards for audits).

(2) Upon receipt of an audit report under ORS 297.465 (Standards for audits) the governing body of a county or city shall determine the measures it considers necessary to correct any deficiencies disclosed in the report. The governing body shall adopt a resolution setting forth the corrective measures it proposes and the period of time estimated to complete them.

(3) Within 30 days after a county or city files a copy of its audit report with the Secretary of State under ORS 297.465 (Standards for audits) a copy of the resolution prepared under subsection (2) of this section shall also be filed. Upon receipt of the audit report and the resolution, the Secretary of State shall either acknowledge the city or county’s plans to correct deficiencies cited in the audit report or notify the county or city of those deficiencies which, if not corrected, could result in withholding of funds under this section. At the request of the governing body of the city or county the Secretary of State shall make suggestions for correcting those deficiencies. If the governing body of the county or city does not agree with the notification by the Secretary of State, it shall be granted an opportunity for a conference regarding the notification, audit determinations or corrective measures to be taken.

(4) If the Secretary of State concurs with determinations made under subsection (1) of this section in two successive audits and reviews of the same county or city, and determines that the governing body of the county or city has not taken adequate action to correct the deficiencies cited in the notifications given under subsection (3) of this section, the Secretary of State may certify these facts to the State Treasurer, the Director of the Department of Revenue, the Director of Transportation and the Director of the Oregon Department of Administrative Services. The certificate of the Secretary of State shall only be issued after notice, opportunity to be heard and hearing pursuant to the provisions of ORS chapter 183, governing contested cases. The hearing shall be held within the jurisdiction of the county or city.

(5) Upon receipt of a certificate from the Secretary of State under subsection (4) of this section, the State Treasurer, the Director of the Department of Revenue, the Director of Transportation and the Director of the Oregon Department of Administrative Services shall withhold from distribution to the county or city 10 percent of the moneys otherwise to be distributed to it under ORS 221.770 (Revenue sharing to cities), 323.455 (Distribution of certain cigarette tax revenues), 366.762 (Appropriation from highway fund for counties) to 366.768 (Advances from highway fund to county), 366.785 (Definitions for ORS 366.785 to 366.820) to 366.820 (Limit to application of ORS 366.785 to 366.815), 471.805 (Disposition of moneys) and 471.810 (Distribution of available moneys in Oregon Liquor Control Commission Account). The moneys withheld shall be disbursed to the county or city only after the officer responsible for disbursement has received notice from the Secretary of State that the governing body of the county or city has taken action to follow generally accepted accounting principles in reporting financial condition and operations and establish appropriate accounting systems and internal controls and will substantially comply with legal requirements in conducting its financial affairs.

(6) The Secretary of State may not issue a certificate under subsection (4) of this section for failure to follow generally accepted accounting principles if a county or city has followed accounting practices authorized by state law.

(7) As used in this section, "generally accepted accounting principles" means those accounting principles sanctioned by recognized authoritative bodies such as the Governmental Accounting Standards Board, the American Institute of Certified Public Accountants, the Financial Accounting Standards Board or their successors. [1979 c.646 §2; 1981 c.245 §3; 1987 c.143 §8; 2007 c.184 §3]

Atty. Gen. Opinions

Authority of Secretary of State to audit Councils of Govern­ments, (1974) Vol 37, p 249; audits by Secretary of State of Oregon Parks Founda­tion, (1978) Vol 38, p 2105; county fair associa­tion as "state aided institu­tion," (1979) Vol 39, p 505; Secretary of State auditing state po­lit­i­cal parties' "dollar check-off" funds, (1979) Vol 40, p 101; Oregon Trade and Marketing Center, Inc. as subject to Municipal Audit Law or state audit law, (1988) Vol 46, p 97

Chapter 297

Atty. Gen. Opinions

Duty or authority of Secretary of State to con­duct performance audits, (1985) Vol. 44, p 381

1 Legislative Counsel Committee, CHAPTER 297—Audits of Public Funds and Financial Records, https://­www.­oregonlegislature.­gov/­bills_laws/­Archive/­2007ors297.­pdf (2007) (last ac­cessed Feb. 12, 2009).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 297, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­297ano.­htm (2007) (last ac­cessed Feb. 12, 2009).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information