2017 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 municipal corporation shall determine the measures it considers necessary to address any deficiencies disclosed in the report. The governing body shall adopt a plan of action to address the deficiencies. The plan must include the estimated period of time necessary to complete the planned actions.

(3)(a) Within 30 days after filing an audit report with the Secretary of State under ORS 297.465 (Standards for audits), a municipal corporation shall file with the secretary a copy of the plan of action adopted under subsection (2) of this section.

(b) At the request of the governing body of the municipal corporation, the secretary shall make suggestions for addressing the deficiencies cited in the audit report.

(c) For counties and cities, upon receipt by the secretary of the audit report and the plan of action adopted under subsection (2) of this section, the secretary shall either acknowledge the county or city’s plan of action to address the deficiencies cited in the audit report or notify the county or city of deficiencies that, if not addressed, could result in withholding of funds under this section. If the governing body of the county or city does not agree with the notification by the secretary, the secretary shall provide the governing body with an opportunity for a conference regarding the notification, audit determinations or corrective measures to be taken.

(4) If the Secretary of State determines that a county or city has not filed an audit report with the secretary as required under ORS 297.465 (Standards for audits), the secretary may certify the determination 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.

(5) 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 address the deficiencies cited in the notifications given under subsection (3) of this section, the secretary may certify the determination 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 under this subsection may be issued only 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.

(6) Upon receipt of a certificate from the Secretary of State under subsection (4) or (5) 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 that:

(a) The county or city has filed the audit report required under ORS 297.465 (Standards for audits) with the secretary; or

(b) 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.

(7) The Secretary of State may not issue a certificate under subsection (5) of this section for failure to follow generally accepted accounting principles if a county or city has followed accounting practices authorized by state law.

(8) 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; 2015 c.29 §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

  • Portland Mercury / Dirk Vanderhart, Dec 9, 2013
    “The Multnomah County Sheriff's Office, perpetually in the hot seat for millions in overtime expenditures, overshot its budget last fiscal year by more than half a million dollars, a breach of Oregon law. That overspending amounts to a sliver of the office's $120 million budget. But it also contravenes the normal process . . .”
1 Legislative Counsel Committee, CHAPTER 297—Audits of Public Funds and Financial Records, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors297.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 297, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano297.­html (2017) (last ac­cessed Mar. 30, 2018).
 
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.