The Governor signed into law House Bill 2174 on April 16, 2015 amending Oregon Municipal Audit Law.  The changes are significant and the law takes effect immediately, although as a practical matter, the amendments should be applied beginning with fiscal year ending June 30, 2015.  All municipal corporations are impacted at least in part. Highlights include the following provisions:

If a city or county does not file its audit report with the Secretary of State within one year of its fiscal year-end, except for extraordinary circumstances, the Secretary of State may take action to withhold 10% of state revenue distributions to the city or county until the report is filed.

Any municipal corporation must, within 30 days of filing its audit report, file with the Secretary a plan of action to address the deficiencies noted in the report. Deficiencies include modified audit opinions; violations of laws, rules, and regulations; and, other deficiencies communicated in writing to management and the governing body.

The Secretary of State is required to summarize the reporting activities of all municipal corporations required to have an audit.  The results will be presented in a report to the legislative assembly each biennial session for their review.

The law was amended making it the responsibility of the municipal corporation to request an extension of time to file its report. This was previously the responsibility of the audit firm.

Contracts between the municipal corporation and its independent auditor are no longer prescribed or subject to the approval of the Secretary. This law was enacted by the legislature several decades ago for the Secretary as a mechanism to provide guidance to municipal corporations at a time when contracts were oftentimes only verbal. Today, municipal corporations follow Public Contracting Code ORS Chapters 279A, 279B, and 279C for guidance.