2007 Oregon Code - Chapter 297 :: Chapter 297 - Audits of Public Funds and Financial Records
Chapter 297 —
Audits of Public Funds and Financial Records
2007 EDITION
AUDITS OF PUBLIC FUNDS AND FINANCIAL RECORDS
PUBLIC FINANCIAL ADMINISTRATION
DIVISION OF AUDITS OF THE SECRETARY OF STATEÂ’S
OFFICE
297.010Â Â Â Â Division
of Audits; director and staff
297.020Â Â Â Â Functions
and duties of Division of Audits; moneys available for use by division
297.030Â Â Â Â Audits,
reviews and investigations authorized to be made by the Secretary of State may
be assigned to Division of Audits
297.040Â Â Â Â Payment
of costs and expenses of audits authorized by ORS 297.030
297.050Â Â Â Â Copy
of audit reports to be supplied to Joint Legislative Audit Committee and
Legislative Fiscal Officer
297.060Â Â Â Â Confidentiality
of tax records; penalty for disclosure
LEGISLATIVE OVERSIGHT OF AUDITS
297.065Â Â Â Â Oversight
of program audits and evaluation by Joint Legislative Audit Committee
297.070Â Â Â Â Criteria
for audits; rules; contracts with private auditors; audit expenses
INVESTIGATION OF LOSS OF PUBLIC FUNDS OR
PROPERTY
297.110Â Â Â Â Definitions
for ORS 291.226 and 297.120
297.120Â Â Â Â Division
of Audits investigation of state agency loss of public funds or property;
report to Governor
AUDITS OF ACCOUNTS OF STATE AND STATE-AIDED
INSTITUTIONS AND AGENCIES
297.210Â Â Â Â Audits
of accounts of state agencies and state-aided institutions and agencies; audits
of school districts; subpoena; audits on retirement of executive head of
institution or department; terms and compensation of auditors
297.230Â Â Â Â Estimate
and payment of costs and expenses of audits; legislative report; crediting
moneys to Division of Audits Account
MUNICIPAL AUDIT LAW
297.405Â Â Â Â Definitions
for ORS 297.020, 297.230, 297.405 to 297.740 and 297.990
297.415Â Â Â Â Periodic
financial reports required
297.425Â Â Â Â Annual
audits required; contracts related to audits; compensation; expenses; subjects
of audits
297.435Â Â Â Â Exemption
from audit; financial statement and bonding required
297.445Â Â Â Â Petition
to audit municipal corporation exempt under ORS 297.435; notice to corporation;
audit
297.455Â Â Â Â Audits
by federal government; review and approval by Secretary of State
297.459Â Â Â Â Furnishing
county audit reports to Department of Revenue
297.465Â Â Â Â Standards
for audits; form; filing
297.466Â Â Â Â Auditor
statement required; procedure for determining and correcting deficiencies;
withholding of state funds
297.475Â Â Â Â Cancellation
of request for Secretary of State assistance
297.485Â Â Â Â Filing
fees
297.495Â Â Â Â Extraordinary
costs
297.505Â Â Â Â Rules
297.515Â Â Â Â County
audits include judicial and law enforcement agencies and officers
297.525Â Â Â Â Annual
audit of county road work
297.527Â Â Â Â City
utilities separate municipal corporations
297.530Â Â Â Â Subpoena
authority of Secretary of State; enforcement; costs
297.535Â Â Â Â Division
of Audits Account
297.545Â Â Â Â Disposition
of Municipal Audit Law filing fees
297.555Â Â Â Â Short
title
ROSTER OF AUTHORIZED ACCOUNTANTS
297.670Â Â Â Â Board
of Accountancy to prepare and maintain roster
297.680Â Â Â Â Rules
for establishing and maintaining roster
297.701Â Â Â Â Persons
on roster on August 5, 1959; removal
297.710Â Â Â Â Removal
of accountant from roster; reinstatement
297.720Â Â Â Â Biennial
fee of accountants included on roster
297.730Â Â Â Â Disposition
of fees of board
297.740Â Â Â Â Rules
of board
PENALTIES
297.990Â Â Â Â Penalties
DIVISION OF AUDITS OF THE SECRETARY OF STATEÂ’S
OFFICE
     297.010
Division of Audits; director and staff. There is established the Division of Audits to be maintained under the
supervision and control of the Secretary of State and operated as one of the
divisions of the secretaryÂ’s office. The Secretary of State shall assign or
appoint a director of the division and such other assistants, accountants,
auditors and clerks, upon such terms and for such compensation, as the
secretary deems advantageous and necessary to carry out the duties and
functions of the division. [1985 c.509 §1]
     297.020
Functions and duties of Division of Audits; moneys available for use by
division. (1) The Division
of Audits shall have the function and duty of carrying out the provisions of
ORS 297.210, 297.230, 297.405 to 297.555, 297.990 and this section.
     (2) All moneys received under authority of
the sections listed in subsection (1) of this section and moneys appropriated
for use by the Secretary of State in carrying out the provisions of those
sections hereby are made available for use by the Division of Audits. [Amended
by 1977 c.774 §19; 1979 c.286 §6]
     297.030
Audits, reviews and investigations authorized to be made by the Secretary of
State may be assigned to Division of Audits. The audits, reviews or investigations authorized to be made by the
Secretary of State may be assigned to the Division of Audits as a part of its
functions and duties. [Amended by 1955 c.287 §18; 1987 c.143 §1]
     297.040
Payment of costs and expenses of audits authorized by ORS 297.030. The costs and expenses of conducting audits
authorized by ORS 297.030 shall be paid from whatever funds are appropriated by
law for use in carrying out the provisions of the respective laws relating
thereto. The costs and expenses shall be charged and billed to such funds or
activities in the same manner as are costs and expenses charged and billed for
audits, reviews, investigations and system installations to municipal
corporations and the various state departments, boards and commissions. [Amended
by 1987 c.143 §2]
     297.050
Copy of audit reports to be supplied to Joint Legislative Audit Committee and Legislative
Fiscal Officer. The Division
of Audits of the office of the Secretary of State shall supply the Joint
Legislative Audit Committee and the Legislative Fiscal Officer with a copy of
each audit report made by or for the Division of Audits. [1959 c.70 §10; 1997
c.847 §5]
     297.060
Confidentiality of tax records; penalty for disclosure. Information furnished to the Secretary of
State by the Department of Revenue and made confidential by ORS 314.835 shall
be used by the Secretary of State and the officers and employees of the
Secretary of State solely for the purposes of performing the functions of the
office of Auditor of Public Accounts as required by section 2, Article VI of
the Oregon Constitution, and shall not be used or disclosed for any other
purpose. Any person who violates this prohibition against disclosure, upon
conviction, is punishable as provided by ORS 314.991 (2). [1979 c.690 §17]
LEGISLATIVE
OVERSIGHT OF AUDITS
     297.065
Oversight of program audits and evaluation by Joint Legislative Audit Committee. (1) It is the policy of this state that
state government services be delivered with the highest level of desired
effectiveness at the lowest possible cost.
     (2) The Joint Legislative Audit Committee
shall provide oversight of the conduct of performance and program audits and
program evaluations, that are outside the authority of the Secretary of State
under section 2, Article VI of the Oregon Constitution, of state departments,
boards, commissions, institutions and state-aided institutions and agencies.
The joint committee shall review the efforts of state departments, boards,
commissions, institutions and state-aided institutions and agencies to comply
with the recommendations of the audit or evaluation reports. [1997 c.847 §2]
     297.070
Criteria for audits; rules; contracts with private auditors; audit expenses. (1) Performance and program audits of all
state departments, boards, commissions, institutions and state-aided
institutions and agencies shall be conducted on the basis of risk assessment
and on standards established by national recognized entities including, but not
limited to, the United States General Accounting Office and the National
Association of State Auditors. The Secretary of State shall adopt and the Joint
Legislative Audit Committee shall approve rules specifying all criteria to be
considered for conducting a performance or program audit under this section.
The Secretary of State shall schedule the performance and program audits as
directed by the Joint Legislative Audit Committee.
     (2) The Secretary of State may subpoena
witnesses, may require the production of books and papers and rendering of
reports in such manner and form as the Secretary of State requires and may do
all things necessary to secure a full and thorough audit. The Secretary of
State shall report, in writing, to the Legislative Assembly as provided in ORS
192.245. The report shall include a copy of the report on each performance and
program audit.
     (3) The Secretary of State, as State
Auditor, shall contract with qualified private sector auditors to conduct
audits required by this section, unless the Secretary of State determines that
it is not practical or in the public interest to do so. If the Secretary of
State determines that it is not practical or in the public interest to contract
with qualified private sector auditors, after notifying the Joint Legislative
Audit Committee, the Secretary of State shall employ auditors for such purpose
and shall include in the written audit report the circumstances that rendered
it impractical or not in the public interest to contract with qualified private
sector auditors. All contracts for conducting performance and program audits
under this section shall be in a form prescribed or approved by the Secretary
of State. A copy of each completed contract shall be furnished to the Secretary
of State and the Joint Legislative Audit Committee. The Secretary of State
shall employ or contract with auditors upon terms and for compensation as the
Secretary of State determines are advantageous and advisable.
     (4) An audit conducted under contract as
provided in subsection (3) of this section shall be considered to be conducted
by the Division of Audits for purposes of ORS 297.020, 297.050 and 297.535.
     (5) If a person fails to comply with any
subpoena issued under subsection (2) of this section, a judge of the circuit
court of any county, on application of the Secretary of State, shall compel
obedience by proceedings for contempt as in the case of disobedience of the
requirements of a subpoena issued from the circuit court.
     (6) The Secretary of State may enter into
an agreement with the department, board, commission, institution, state-aided
institution or agency that is the subject of a performance or program audit for
payment of the expenses incurred by the Secretary of State in conducting the
audit. The Emergency Board may also make funds available to the Division of
Audits to reimburse it for expenses incurred under this section.
     (7) As used in this section:
     (a) “Performance audit” includes
determining:
     (A) Whether an entity described in
subsection (1) of this section that is the subject of the audit is acquiring,
protecting and using its resources economically and efficiently;
     (B) The causes of inefficiencies or
uneconomical practices; and
     (C) Whether the entity has complied with
laws and regulations concerning matters of economy and efficiency.
     (b) “Program audit” includes determining:
     (A) The extent to which the desired
results or benefits of a program established by the Legislative Assembly or
other authorizing body are being achieved;
     (B) The extent to which the need for or
objectives of an ongoing program are necessary or relevant;
     (C) Whether the program complements,
duplicates, overlaps or conflicts with other related programs;
     (D) The effectiveness of organizations,
programs, activities or functions; and
     (E) Whether the entity described in
subsection (1) of this section that is the subject of the audit has complied
with laws and regulations applicable to the program. [1997 c.847 §4]
INVESTIGATION
OF LOSS OF PUBLIC FUNDS OR PROPERTY
     297.110
Definitions for ORS 291.226 and 297.120. As used in this section and ORS 291.226 and 297.120:
     (1) “Public official” means any person who
is serving a state agency as an officer, employee, member, agent or otherwise,
regardless of whether the person is compensated for the personÂ’s services.
     (2) “State agency” means any state
department, division, bureau or other agency or body headed by an elected or
appointed state officer or member of a board or commission. [1963 c.617 §1;
1993 c.718 §1; 2007 c.219 §1]
     297.120
Division of Audits investigation of state agency loss of public funds or property;
report to Governor. (1) When
a state agency sustains a loss of $100 or more of public funds or property
under circumstances involving a public official who is entrusted with the
custody of the funds or property or who is charged with the duty to account for
the funds or property, the agency shall, within 30 days after discovery of the
loss, report the loss in writing to the Division of Audits.
     (2) Within 30 days after receiving the
report under subsection (1) of this section, the division shall determine
whether to investigate the loss.
     (3) If the division investigates a loss,
the division shall prepare a report regarding the accountability of the public
official for the loss. The report shall be presented to the Governor. [1963
c.617 §2; 1969 c.199 §48; 1991 c.219 §2; 1993 c.718 §2; 2007 c.219 §2]
AUDITS OF
ACCOUNTS OF STATE AND STATE-AIDED INSTITUTIONS AND AGENCIES
     297.210
Audits of accounts of state agencies and state-aided institutions and agencies;
audits of school districts; subpoena; audits on retirement of executive head of
institution or department; terms and compensation of auditors. (1)(a) The Secretary of State, as State
Auditor, shall have the accounts and financial affairs of state departments,
boards, commissions, institutions and state-aided institutions and agencies of
the state reviewed or audited as the Secretary of State considers advisable or
necessary.
     (b) The Secretary of State, as State
Auditor, may conduct audits of the business practices of school districts and
education service districts pursuant to a contract with the Department of Education
authorized by ORS 326.133.
     (c) The Secretary of State may subpoena
witnesses, require the production of books and papers and rendering of reports
in such manner and form as the Secretary of State requires and may do all
things necessary to secure a full and thorough investigation. The Secretary of
State shall report, in writing, to the Governor. The report shall include a
copy of the report on each audit.
     (2) The Secretary of State may audit or
review any institution or department of the state government at any time the
executive head of the institution or department, for any reason, retires from
the headÂ’s office or position. The secretary need not conduct an audit or
review under this subsection if:
     (a) The institution or department has been
the subject of an audit or review of financial controls within the six months
immediately preceding the retirement of the executive head of the institution
or department; or
     (b) The secretary has not received a
report within the 12 months immediately preceding the retirement of the
executive head of the institution or department indicating that the executive
head of the institution or department was unable or unwilling to follow state
law, rules, policies or procedures.
     (3) The Secretary of State shall employ auditors
upon such terms and for such compensation as the Secretary of State determines
are advantageous and advisable.
     (4) If a person fails to comply with any
subpoena issued under subsection (1) of this section, a judge of the circuit
court of any county, on application of the Secretary of State, shall compel
obedience by proceedings for contempt as in the case of disobedience of the
requirements of a subpoena issued from the circuit court. [Amended by 1969
c.135 §1; 1971 c.748 §3; 1983 c.154 §1; 1987 c.143 §3; 1993 c.718 §4; 1997
c.157 §1; 2007 c.218 §3; 2007 c.839 §14]
     297.220 [Repealed by 1969 c.135 §3]
     297.230
Estimate and payment of costs and expenses of audits; legislative report;
crediting moneys to Division of Audits Account. (1) The Division of Audits shall estimate in
advance the expenses that it will incur during the biennium in carrying out the
provisions of ORS 297.030, 297.120 and 297.210, and shall charge officers,
departments, boards and commissions of state government and other public bodies
for their share of such expenses for periods within the biennium and in
sufficient amounts to provide reasonable cash operating requirements for the
Division of Audits within the biennial period. Each officer, department, board
or commission or other public body shall pay to the credit of the Division of
Audits Account such charge as an administrative expense from funds or
appropriations available to it in the same manner as other claims against the
state or public body are paid.
     (2) Payments authorized under this section
shall be consistent with ORS 171.580 and 171.585. The Division of Audits shall
report to the Joint Legislative Audit Committee established under ORS 171.580
when estimated expenses for an audit authorized under subsection (1) of this
section exceed the estimated expenses for a biennium.
     (3) All moneys received from the various
state departments, boards, commissions, institutions and state-aided
institutions and agencies of the state in the payment of the costs of audits
and reviews under this section and ORS 297.210 shall be credited to the
Division of Audits Account. [Amended by 1977 c.774 §20; 1987 c.143 §4; 1993
c.724 §24; 1999 c.324 §1]
     297.240 [Repealed by 1977 c.774 §27]
MUNICIPAL
AUDIT LAW
     297.405
Definitions for ORS 297.020, 297.230, 297.405 to 297.740 and 297.990. As used in ORS 297.020, 297.230, 297.405 to
297.740 and 297.990:
     (1) “Accountants” means all accountants
whose names are included in the roster prepared and maintained by the Oregon
Board of Accountancy as required by ORS 297.670.
     (2) “Accounts” means all books, papers,
files, letters and records of any nature or in any form used in conducting the
affairs of the municipal corporation or in recording the transactions thereof.
     (3) “Board” means the Oregon Board of
Accountancy.
     (4) “Fiscal affairs” means and includes
all activities of any nature giving rise to or resulting from financial
transactions, including compliance with legal requirements applicable to the
operation of a municipal corporation.
     (5) “Municipal corporation” means a:
     (a) City;
     (b) County;
     (c) Special district;
     (d) Corporation, except a municipal
corporation established pursuant to ORS 441.525 to 441.595, upon which is
conferred powers of the state for the purpose of local government; or
     (e) Public corporation, including a
cooperative body formed between municipal corporations.
     (6) “Public corporation” means a
corporation the operation of which is subject to control by local government or
its officers and which, at least in part, is organized to serve a public
purpose of, and receives public funds or other support having monetary value
from, such government. [1977 c.774 §2; 1979 c.286 §7; 1987 c.423 §1; 2005 c.443
§15]
     297.410 [Repealed by 1977 c.774 §27]
     297.415
Periodic financial reports required. The Secretary of State shall require that periodic reports of
financial condition and financial operations be prepared and submitted to the
Secretary of State by municipal corporations in such form and at such times as
the Secretary of State considers necessary. The periodic reports may be
required of all municipal corporations. [1977 c.774 §3]
     297.420 [Repealed by 1977 c.774 §27]
     297.425
Annual audits required; contracts related to audits; compensation; expenses;
subjects of audits. (1)
Except as provided in ORS 297.435, the accounts and fiscal affairs of every
municipal corporation shall be audited and reviewed at least once each calendar
or fiscal year, and more often if considered advisable by the governing body or
managing or executive officer of the municipal corporation. The audits and
reviews shall be made by accountants pursuant to contracts entered into by the
governing body, or managing or executive officer, and accountants, or by the
Secretary of State pursuant to a duly adopted ordinance or resolution. Upon
request of the Secretary of State, the governing body, or managing or executive
officer, shall provide the secretary with a copy of the contract entered into
or an ordinance or resolution adopted under this section.
     (2) All contracts for conducting audits
and reviews shall be in a form prescribed or approved by the Secretary of
State.
     (3) The compensation for audits and
reviews performed by accountants shall be as agreed upon between the governing
body, or managing or executive officer of the municipal corporation, and the
accountant, and shall be paid in the same manner as other claims against the
municipal corporation are paid.
     (4) All expenses and costs incurred by the
Secretary of State in conducting audits and reviews for municipal corporations
shall be borne by the municipal corporation for which a particular audit or
review is made. The expenses and costs shall be paid to the Secretary of State
in the same manner as other claims against the municipal corporation are paid.
     (5) Audits and reviews required by this
section shall inquire into:
     (a) The principles of accounting and
methods followed by the municipal corporation in recording, summarizing and
reporting its financial transactions and financial condition;
     (b) The accuracy and legality of the
transactions, accounts, records, files and financial reports of the officers
and employees of the municipal corporation as they relate to its fiscal
affairs; and
     (c) Compliance with requirements, orders
and regulations of other public officials which pertain to the financial
condition or financial operations of the municipal corporation. [1977 c.774 §4;
1987 c.143 §5; 2001 c.26 §1; 2007 c.184 §1]
     297.430 [Repealed by 1977 c.774 §27]
     297.435
Exemption from audit; financial statement and bonding required. (1) Subject to ORS 297.445, ORS 297.425 does
not apply to any municipal corporation, except a county or a school district,
if, with respect to any one calendar year or fiscal year, the municipal
corporation meets all the conditions in either subsection (2) or (3) of this
section.
     (2)(a) Total expenditures for all
purposes, including moneys expended for debt retirement, did not exceed
$150,000 for the year;
     (b) The municipal corporation has
submitted financial statements for the year to the Secretary of State within 90
days following the end of the year; and
     (c) A certificate has been submitted with
the financial statements stating that the principal responsible official of the
municipal corporation was covered during the entire year by a fidelity or
faithful performance bond in an amount at least equal to the total amount of
moneys received by the municipal corporation during the year.
     (3)(a) Total expenditures for all
purposes, including moneys expended for debt retirement, exceeded $150,000 but
did not exceed $500,000 for the year;
     (b) The municipal corporation has
submitted financial statements for the year to the Secretary of State within
180 days following the end of the year, and the financial statements have been
reviewed by an accountant or the Secretary of State in accordance with
standards prescribed by the Secretary of State; and
     (c) A certificate has been submitted with
the financial statements stating that the official responsible for receiving
and disbursing moneys on behalf of the municipal corporation was covered during
the entire year by a fidelity or faithful performance bond in an amount at
least equal to 10 percent of the total receipts for the year, but not less than
$10,000.
     (4) The financial statements required by
this section shall be in a form prescribed by the Secretary of State and shall
be considered audit reports for the purpose of the filing fee required by ORS
297.485.
     (5) The provisions of ORS 297.466 apply to
financial statements for cities reviewed under subsection (3) of this section. [1977
c.774 §5; 1981 c.245 §1; 1997 c.401 §1; 2007 c.709 §1]
     297.440 [Repealed by 1977 c.774 §27]
     297.445
Petition to audit municipal corporation exempt under ORS 297.435; notice to
corporation; audit. (1) ORS
297.435 does not apply to a municipal corporation for any calendar or fiscal
year if a petition requesting an audit, signed by residents of the municipal
corporation who are subject to taxes, fees, assessments or other charges levied
by the municipal corporation, is filed with the Secretary of State within six
months of the end of the fiscal year for which the audit is requested. In a
municipal corporation with a population of 150 or less, the petition must be
signed by at least 10 residents. In a municipal corporation with a population
of more than 150, the petition must be signed by at least 30 residents.
     (2) The Secretary of State shall give
notice of the petition to the governing body of the municipal corporation
within 10 days of its receipt. Upon receipt of notice of the petition from the
Secretary of State, the governing body or managing or executive officer of the
municipal corporation shall immediately comply with the provisions of ORS
297.425. If a copy of a signed contract between the governing body or managing
or executive officer and an accountant, or a duly authorized ordinance or
resolution requesting an audit by the Secretary of State, is not received
within 30 days of the dispatch of notice of petition, the Secretary of State
shall cause an audit and review to be made of the accounts and fiscal affairs
of the municipal corporation designated in the petition.
     (3) The costs incurred by the Secretary of
State in making the audit and review shall be borne by the municipal
corporation, and shall be paid to the Secretary of State in the same manner as
other claims against the municipal corporation. [1977 c.774 §6; 1987 c.143 §6;
2003 c.326 §1]
     297.450 [Repealed by 1977 c.774 §27]
     297.455
Audits by federal government; review and approval by Secretary of State. If the accounts and fiscal affairs of a
municipal corporation are audited and reviewed for a calendar or fiscal year,
in accordance with the requirements of ORS 297.465, by auditors provided by the
federal government, the Secretary of State may accept for review and filing the
audit reports of such federal auditors if the reports also comply with the
requirements set forth in ORS 297.465. Any such audit reports filed with the
Secretary of State shall be subject to the filing fee required by ORS 297.485.
If the audits and reviews and resulting audit reports are found by the
Secretary of State to comply with ORS 297.465, the municipal corporation will
be considered in compliance with ORS 297.425. [1977 c.774 §7; 1987 c.143 §7]
     297.459
Furnishing county audit reports to Department of Revenue. An accountant who furnishes an audit report
to a county pursuant to ORS 297.465 shall, at the same time, furnish a copy of
the audit report to the Department of Revenue. [1989 c.796 §9]
     Note: 297.459 was added to and made a part of
297.405 to 297.740 by legislative action but was not added to any other series
in ORS chapter 297. See Preface to Oregon Revised Statutes for further
explanation.
     297.460 [Amended by 1977 c.774 §21; renumbered
297.535]
     297.465
Standards for audits; form; filing. (1) The Secretary of State, in cooperation with the Oregon Board of
Accountancy, and in consultation with the Oregon Society of Certified Public
Accountants, shall prescribe the minimum standards for conducting audits of
municipal corporations, preparing the resulting audit reports and expressing
opinions upon the financial condition and results of operation for the period
under audit. The expression of opinion shall be signed by the accountant
signing the contract, or in the case of a partnership or professional
corporation, by a partner or stockholder who is an accountant as defined in ORS
297.405, who has personally conducted the audit to an extent satisfactory to
the Secretary of State and to the municipal corporation.
     (2) The municipal corporation shall be
furnished with a written audit report, containing a signed expression of
opinion, in the form prescribed by the Secretary of State. A copy of the audit
report shall be furnished to each person who was a member of the governing body
at the end of the calendar or fiscal year and to each member of the current
governing body. Other copies shall be furnished the municipal corporation as
are requested by the chairperson of the governing body or the managing or executive
officer. The accountant shall furnish the audit report to the municipal
corporation within six months after the close of the calendar or fiscal year
under audit, except that the Secretary of State, for good cause shown, may
grant to the accountant a reasonable extension of time.
     (3) The municipal corporation shall file
one copy of its audit report with the Secretary of State. The report shall be
subject to review by the Secretary of State, who may also require submission of
the supporting documentation and audit programs of the accountant. If an audit,
audit report or expression of opinion is found by the Secretary of State not to
be in accordance with the prescribed standards, the Secretary of State shall
request compliance. If the accountant fails to comply with the request, the
Secretary of State shall so report to the Oregon Board of Accountancy, which
thereupon may remove or suspend the name of the accountant from the roster
required by ORS 297.670.
     (4) Audit reports or financial statements
filed with the Secretary of State as required by ORS 297.405 to 297.555 shall
include the names, mailing addresses and titles of the officers and members of
the governing board of the municipal corporation. The report or statement of a
special district shall include the name of its registered agent and the address
of its registered office as provided by ORS 198.335 to 198.365. [1977 c.774 §8;
1979 c.646 §3; 2007 c.184 §2]
     297.466
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, 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.
     (2) Upon receipt of an audit report under
ORS 297.465 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
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 countyÂ’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, 323.455, 366.762 to 366.768, 366.785 to
366.820, 471.805 and 471.810. 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]
     297.470 [Repealed by 1977 c.774 §27]
     297.475
Cancellation of request for Secretary of State assistance. Whenever any municipal corporation has made
a request to the Secretary of State, pursuant to ORS 297.425, for the audit of
its accounts and fiscal affairs, the municipal corporation may cancel that
request by ordinance or resolution adopted and furnished to the Secretary of
State at least 90 days prior to the end of a calendar or fiscal year. [1977
c.774 §9; 2007 c.184 §4]
     297.480 [Repealed by 1977 c.774 §27]
     297.485
Filing fees. (1) At the time
an audit report, prepared by an accountant, is filed with the Secretary of
State, as required by ORS 297.465, the municipal corporation shall pay to the
Secretary of State a filing fee. The filing fee shall be determined by the
total expenditures made by the municipal corporation for any and all purposes
during the calendar or fiscal year audited, except that expenditures for
principal of bonded debt, principal of short-term loans, principal of warrants
redeemed which were issued during prior audit periods, transfers or loans
between funds and turnovers of taxes or other trust moneys to other municipal
corporations shall not be included in the total expenditures upon which the
amount of the fee is based.
     (2) The filing fee to be paid shall be as
indicated for those municipal corporations whose total expenditures fall within
the classifications as follows:
______________________________________________________________________________
               Over        Not Over           Fee
                            $    50,000     $     20
     $    50,000         150,000            40
         150,000         500,000          150
         500,000      1,000,000          200
      1,000,000      5,000,000          250
      5,000,000     10,000,000          300
     10,000,000     50,000,000          350
     50,000,000                                  400
______________________________________________________________________________
     (3) Audit reports filed by the
administrative office of the county, under ORS 328.465 (2), for school
districts with less than 1,000 children according to the latest school census
in the county, shall be considered one report for purposes of the filing fee
required by this section. The filing fee shall be paid by the county
administrative office and deducted pro rata from moneys due to the several
school districts. [1977 c.774 §10; 1999 c.345 §1]
     297.490 [Repealed by 1977 c.774 §27]
     297.495
Extraordinary costs. Any
extraordinary work required to be performed by the Secretary of State in
connection with any of the audits or the reports thereon filed pursuant to ORS
297.465 shall be compensated by an additional payment to be agreed upon by the Secretary
of State and the municipal corporation for which the audit is made or to be
made. [1977 c.774 §11]
     297.500 [Repealed by 1977 c.774 §27]
     297.505
Rules. The Secretary of
State, subject to ORS chapter 183, may adopt, amend and repeal rules necessary
to carry out the provisions of ORS 297.020, 297.230, 297.405 to 297.555 and
297.990. [1977 c.774 §12; 1979 c.286 §9]
     297.515
County audits include judicial and law enforcement agencies and officers. The audits of counties required under ORS
297.425 shall include circuit and justice courts, their officers and employees,
district attorneys and their employees, sheriffs, constables and all other
officers and officials elected by the residents of a county or appointed by an
official elected by the residents of a county and transacting public business. [1977
c.774 §13]
     297.520 [1969 c.518 §3; repealed by 1977 c.774 §27]
     297.525
Annual audit of county road work. The annual audit required to be made of the accounts and fiscal
affairs of a county shall include a cost audit of the cost account for county
road work. [1977 c.774 §13a]
     297.527
City utilities separate municipal corporations. When a city, by charter, establishes a board
or commission that is elected by the people to operate a water utility or an
electric utility of the city, the city and the water utility or the electric
utility are separate municipal corporations for the purposes of ORS 297.405 to
297.555 and 297.990. [2005 c.443 §17]
     Note: 297.527 was added to and made a part of
297.405 to 297.740 by legislative action but was not added to any other series
in ORS chapter 297. See Preface to Oregon Revised Statutes for further
explanation.
     297.530
Subpoena authority of Secretary of State; enforcement; costs. (1) The Secretary of State may subpoena
witnesses, require the production of accounts and do all things necessary to
assure that the accounts and fiscal affairs of a municipal corporation are
subject to a complete audit. If an accountant is denied access to any of the
accounts or other information pertaining to the fiscal affairs of a municipal
corporation, the accountant may request the Secretary of State to subpoena the
accounts, or witnesses who may be able to furnish the necessary information.
The accountant shall furnish to the Secretary of State such information as the
Secretary of State determines necessary to carry out the provisions of
subsections (1) and (2) of this section.
     (2) If a person fails to comply with any
subpoena issued under subsection (1) of this section, a judge of the circuit
court of any county, on application of the Secretary of State, shall compel
obedience by proceedings for contempt as in the case of disobedience of the
requirements of a subpoena issued from the circuit court.
     (3) All costs necessarily incurred by the
Secretary of State or an accountant in carrying out subsections (1) and (2) of
this section shall be paid by the municipal corporation. [1983 c.794 §§2,3]
     297.535
Division of Audits Account.
(1) All moneys received by the Secretary of State under ORS 297.210, 297.230,
297.425 and 297.445 shall be immediately turned over to the State Treasurer,
who shall deposit the moneys in the General Fund to the credit of an account to
be known as the Division of Audits Account.
     (2) The moneys received under subsection
(1) of this section and deposited in the Division of Audits Account are
continuously appropriated to the Secretary of State for use in payment of
salaries and other expenses or costs of the Division of Audits.
     (3) The moneys received under ORS 297.545
and deposited in the Division of Audits Account are continuously appropriated
to the Secretary of State for use in payment of salaries and other expenses or
costs incurred by the Division of Audits of the Office of the Secretary of
State in connection with the carrying out of the provisions of ORS 297.020,
297.230, 297.405 to 297.740 and 297.990.
     (4) The Secretary of State may use moneys
in the Division of Audits Account for cash advances for travel expenses
necessary in carrying out the provisions of ORS 297.020 to 297.555 and 297.990.
Any moneys received in reimbursement of these cash advances shall be deposited
in the Division of Audits Account.
     (5) The Secretary of State shall keep a
record of all moneys deposited in the Division of Audits Account. The record
shall indicate by separate cumulative accounts the source from which the moneys
are derived and the individual activity or program against which each
withdrawal is charged. [Formerly 297.460; 1979 c.286 §10; 1995 c.144 §3; 2001
c.796 §20; 2005 c.755 §14]
     297.545
Disposition of Municipal Audit Law filing fees. All filing fees received by the Secretary of
State under ORS 297.405 to 297.555 shall be immediately turned over to the
State Treasurer who shall deposit the moneys in the Division of Audits Account
created under ORS 297.535. [Formerly 297.660; 1979 c.286 §11; 1995 c.144 §5]
     297.555
Short title. ORS 297.405 to
297.555 and 297.990 may be cited as the Municipal Audit Law. [1977 c.774 §1;
1979 c.286 §12]
     297.610 [Amended by 1959 c.238 §1; 1963 c.518 §1;
1965 c.332 §1; repealed by 1977 c.774 §27]
     297.620 [Amended by 1961 c.555 §1; 1963 c.301 §1;
repealed by 1977 c.774 §27]
     297.622 [1963 c.301 §3; 1975 c.450 §1; repealed by
1977 c.774 §27]
     297.624 [1963 c.301 §4; repealed by 1977 c.774 §27]
     297.626 [1965 c.332 §9; repealed by 1977 c.774 §27]
     297.630 [Amended by 1965 c.332 §2; repealed by 1977
c.774 §27]
     297.635 [1971 c.267 §2; repealed by 1977 c.774 §27]
     297.640 [Amended by 1961 c.555 §3; 1967 c.67 §2;
repealed by 1977 c.774 §27]
     297.650 [Repealed by 1977 c.774 §27]
     297.660 [Amended by 1977 c.774 §22; renumbered
297.545]
ROSTER OF AUTHORIZED
ACCOUNTANTS
     297.670
Board of Accountancy to prepare and maintain roster. The Oregon Board of Accountancy shall
prepare and maintain a roster of accountants authorized to conduct the
municipal audits required by ORS 297.425. [Amended by 1981 c.83 §1]
     297.680
Rules for establishing and maintaining roster. The Oregon Board of Accountancy shall adopt
by rule:
     (1) Procedures and qualifications for
admitting applicants to the roster of authorized accountants referred to in ORS
297.670;
     (2) Procedures for reviewing the
qualifications of accountants admitted to the roster for continuance on the
roster;
     (3) Fees payable upon application for
admission to the roster; and
     (4) Procedures for making the roster
available to municipal corporations described in ORS 297.405 (5) which are
subject to the Municipal Audit Law. [Amended by 1959 c.238 §2; 1965 c.332 §3;
1987 c.455 §1; 1999 c.309 §1; 1999 c.322 §34]
     297.690 [Amended by 1965 c.332 §4; 1973 c.832 §2;
repealed by 1987 c.455 §5]
     297.700 [Repealed by 1959 c.238 §4]
     297.701
Persons on roster on August 5, 1959; removal. Notwithstanding the repeal of ORS 297.700, any person who is on the roster
referred to in ORS 297.670 on August 5, 1959, shall remain thereon subject only
to removal under ORS 297.710. [1959 c.238 §5]
     297.710
Removal of accountant from roster; reinstatement. (1) The Oregon Board of Accountancy, for
cause, may remove from the roster the name of any person appearing thereon and
may provide for the reinstatement thereof.
     (2) The board shall remove from the roster
the name of any person appearing thereon if the person ceases to possess the
qualifications described in ORS 297.680. If after such removal the board
determines that such person later possesses such qualifications, the board may
provide for the reinstatement of that personÂ’s name on the roster without an
examination. [Amended by 1965 c.332 §5]
     297.720
Biennial fee of accountants included on roster. Every auditor or accountant whose name is
included on the roster of authorized accountants referred to in ORS 297.670
shall pay to the Oregon Board of Accountancy biennially a fee for continuance
thereon. The fee shall be in an amount not to exceed $100 as determined by the
board by rule. [Amended by 1971 c.217 §1; 1981 c.89 §13; 1987 c.455 §2]
     297.730
Disposition of fees of board.
The fees collected by the Oregon Board of Accountancy under ORS 297.670 to
297.740 shall be turned over to the State Treasurer who shall deposit the
moneys in the General Fund to be credited to the Oregon Board of Accountancy
for its use in carrying out the provisions of ORS 297.405 to 297.555 and
297.670 to 297.740. [Amended by 1981 c.83 §2]
     297.740
Rules of board. The Oregon
Board of Accountancy may adopt rules necessary to exercise its powers and
duties provided in ORS 297.405 to 297.555 and 297.670 to 297.740. [Amended by
1981 c.83 §3; 1999 c.322 §35]
     297.750 [Repealed by 1977 c.774 §27]
     297.810 [Repealed by 1967 c.359 §704]
     297.820 [Repealed by 1967 c.359 §704]
     297.830 [Repealed by 1967 c.359 §704]
     297.910 [Formerly 190.120; repealed by 1965 c.351 §4]
     297.920 [1961 c.108 §§6,7; renumbered 190.260]
PENALTIES
     297.990
Penalties. In addition to
all other penalties, any county court, board of county commissioners or
managing or executive officers of any municipal corporation, who violate any of
the provisions of ORS 297.405 to 297.555 or fail to have the audits and
examinations required by those sections made, upon such violation or failure
shall forfeit to the county or other municipality their salaries and fees due
them from the county or other municipality; and it shall be unlawful for any
officer of such county or municipality to draw any warrant in favor of the
members of such court, or such commissioners, or managing or executive officers
of such corporation, in payment of such salaries or fees, or to pay the same in
any manner. [Amended by 1977 c.774 §23; 1979 c.286 §13]
_______________
CHAPTERS 298 TO 304
[Reserved for expansion]
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