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SECRETARY OF STATE, AUDITS DIVISION
SECRETARY OF STATE, AUDITS DIVISION
DIVISION 10
MINIMUM STANDARDS FOR AUDITS OF OREGON MUNICIPAL CORPORATIONS
Minimum Standards
162-010-0000
Preface
(1) Pursuant to the provisions of ORS 297.465, there is presented herewith the Minimum Standards for Audits of Oregon Municipal Corporations.
(2) These Standards have been approved by the Oregon Board of Accountancy (the Board), and have been adopted by the Secretary of State as Administrative Rules under the provisions of ORS Chapter 183.
(3) All audits of municipal corporations shall be made in accordance with these Standards, and all audit reports shall be in the form prescribed herein. The Standards are effective for audits of fiscal years ending after March 31, 2010.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: DOA 3-1986, f. & ef. 5-29-86; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-91; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0010
Definitions
(1) "Accountants" means and indicates all accountants whose names are included in the roster prepared and maintained by the Board, as required by ORS 297.465.
(2) "Accountant's Report". See: "Auditor's Opinion".
(3) "Accounting Principle". A general law, or rule, adopted or professed as a guide to action; a settled ground or basis of conduct or practice.
(4) "Accrual basis" means the recording of the financial effects on a municipal corporation of transactions and other events and circumstances that have cash consequences for the municipal corporation in the periods in which those transactions, events and circumstances occur, rather than only in the periods in which cash is received or paid by the municipal corporation. (ORS 294.311)
(5) "Appropriation" means an authorization granted by the governing body to make expenditures and to incur obligations for specific purposes. It shall be limited to a single fiscal year or to the budget period for municipal corporations preparing biennial budgets. (ORS 294.311)
(6) "Audit". An independent, objective examination of the accounts, financial affairs, and performance of a government municipality for the purpose of determining the results of operation for the period under review and the financial position at the end of the period. The examination includes an evaluation of the system of internal control, a review of the accounting records and procedures and a gathering of appropriate evidence from external sources.
(7) "Auditor's Opinion". A statement signed by an auditor in which he/she states that the financial statements have been examined in accordance with generally accepted auditing standards (with exceptions, if any) and in which he/she expresses an opinion on the financial condition and results of operations of the governmental unit.
(8) "Board" means the Oregon Board of Accountancy. (ORS 297.670)
(9) "Budget" means a plan of financial operation embodying an estimate of expenditures for a given period or purpose and the proposed means of financing the estimated expenditures. (ORS 294.311)
(10) "Cash Basis" means a basis of accounting under which transactions are recognized only in the period during which cash is received or disbursed. (ORS 294.311)
(11) "Encumbrances" means obligations in the form of purchase orders, contracts, or salary commitments which are chargeable to an appropriation and for which a part of the appropriation is reserved. Obligations cease to be encumbrances when paid or when the actual liability is set up. (ORS 294.311)
(12) "Expenditure" means if the accounts are kept on the accrual basis, the total charge incurred, whether paid or unpaid, including expense, provision for retirement of debt not reported as a liability of the fund from which retired, and capital outlay. If the accounts are kept on the cash basis, the term covers only actual disbursement, the drawing of the check or warrant for these purposes and not encumbrances.
(13) "Fiscal Year" means for municipal corporations with the power to impose ad valorem property taxes, the fiscal year commencing on July 1 and closing on June 30, and for all other municipal corporations, an accounting period of 12 months ending on the last day of any month. (ORS 294.311)
(14) Generally Accepted Auditing Standards address the conduct of the audit. They measure the quality of the performance of auditing procedures and the objectives to be obtained by the use of the procedures undertaken. There are ten general, field work and reporting standards approved and adopted by the AICPA membership and they are defined in the Statements on Auditing Standards.
(15) "Internal Control" means a process effected by an entity's governing body, management, and other personnel-designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
(a) Reliability in financial reporting;
(b) Effectiveness and efficiency of operations; and
(c) Compliance with applicable laws and regulations.
(16) "Modified Accrual Basis" means revenues should be recognized in the accounting period in which they become available and measurable. Expenditures should be recognized in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on long-term general long-term debt, which should be recognized when due.
(17) "Municipal Audit Law" means the provisions of ORS 297.405 to 297.555 and 297.990.
(18) "Municipal Corporation" means a county, city, district, or other municipal corporation or public corporation organized for a public purpose within the meaning of the Municipal Audit Law. (ORS 297.405)
(19) "Officers" means elected officials and the chief administrative officer if he is appointed by any or all of the elected officials.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0665; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-91; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07
162-010-0020
Introduction
(1) All municipal corporations, as defined in ORS 297.405, are required to have their accounts and fiscal affairs audited annually in accordance with generally accepted auditing standards as promulgated by the American Institute of Certified Public Accountants (AICPA), unless they qualify under ORS 297.435 to be reviewed in accordance with Statements on Standards for Accounting and Review Standards (SSARS), or file financial reports in lieu of having an audit. The accounts to be audited and examined may include financial statements, or they may consist solely of books, records, and other financial data. Fiscal affairs are all activities of a municipal corporation relating to the collection, receipt, custody, handling, expenditure, or disbursement of public funds.
(2) The accountant who contracts to conduct an audit of a municipal corporation must personally conduct the audit to an extent satisfactory to the Secretary of State, prepare an audit report and express an opinion on the accounts in accordance with these rules. The expression of opinion must be signed by the accountant. The audit report and expression of opinion are to be issued to the municipal corporation within six months after the close of the calendar or fiscal year unless an extension of time has been granted by the Secretary of State.
(3) Management (of the municipal corporation) has the responsibility for adopting sound accounting policies, for maintaining an adequate and effective system of accounts, for the safeguarding of assets, and for devising a system of internal control that will, among other things, help assure the production of proper financial statements. The transactions which should be reflected in the accounts and in the financial statements are matters within the direct knowledge and control of management. The independent auditor's knowledge of such transactions is limited to that acquired through the examination. Accordingly, the fairness of the representations made through financial statements is an implicit and integral part of management's responsibility. The independent auditor may make suggestions as to the form or content of financial statements or he/she may draft them in whole or in part, based on management's accounts and records. However, responsibility for the statements examined is confined to the expression of opinion on them. The financial statements remain the representations of management.
(4) Since the functions and forms of government, as well as the accounting, internal control, and management information systems, will vary greatly among municipal corporations, the independent auditor must be familiar with legal provisions applicable to municipal corporations and the accounting principles promulgated by GASB and other accounting principles considered to be generally acceptable for governmental organizations. The auditor shall review the information systems of accounting and internal control, develop audit programs to adequately test those systems, and form an opinion with respect to the accounts of the municipal corporation.
(5) Officials of the municipal corporation should make an accounting of all resources for which they are responsible. Preparation of the financial statements and notes thereto and the supplementary schedules considered necessary for full disclosure of financial position and results of operations as set forth in OAR 162-010-0050 through 162-010-0170 will be considered an appropriate accounting.
(6) The independent auditor is expected to determine if the accounts and records are maintained in a manner that will permit the preparation of financial statements which will fairly present the financial position and results of operations of the municipal corporation in accordance with legal provisions and in accordance with generally accepted accounting principles. The accounting principles contemplated are those contained in the pronouncements of authoritative bodies including, but not necessarily limited to, the Governmental Accounting Standards Board (GASB), the AICPA and the Financial Accounting Standards Board (FASB). If the municipal corporation fails to prepare and present the financial statements specified in OAR 162-010-0050 through 162-010-0170, the auditor must make a reasonable attempt to draft them for the municipal corporation from the accounts and records made available for audit. If the financial statements cannot be drafted with reasonable effort, appropriate comments must be included in the audit report, together with recommendations for improvements necessary to permit their preparation in the future. Wherever there is a conflict between legal provisions and generally accepted accounting principles, legal provisions are to take precedence. The auditor shall make appropriate disclosure of such conflicts and shall be aware that a qualification of the opinion may be necessary.
(7) In addition to auditing the accounts and financial statements of a municipal corporation, the independent auditor is required to review its fiscal affairs. The review shall include, but not necessarily be limited to, determining if financial operations have been carried out in accordance with appropriate legal provisions including federal and state laws, charter provisions, court orders, ordinances, resolutions, and rules and regulations issued by other governmental agencies. It is the auditor's responsibility to disclose in the audit report material instances of noncompliance with such legal provisions.
(8) The audit report of a municipal corporation shall contain financial statements with appropriate notes, an accountant's report containing the independent auditor's expression of opinion on the financial statements, or an assertion that an opinion cannot be expressed, and the auditor's comments relating to the review of fiscal affairs and compliance with legal requirements:
(a) The auditor shall express an “in relation to” opinion on combining and individual fund statements and schedules required by OAR 162-010-0050 through 162-010-0190.;
(b) The auditor shall also express an “in relation to” opinion on budgetary schedules presented as required supplementary information.
(c) The auditor's opinion must be prepared in accordance with the Statements on Auditing Standards issued by the AICPA.
(d) The report should include either an opinion on whether the accompanying financial information is fairly presented in all material respects in relation to the basic financial statements taken as a whole or a disclaimer of opinion, depending on whether the information has been subjected to the auditing procedures applied in the audit of the basic financial statements.
(e) The auditor's comments relating to the review of fiscal affairs, including compliance with legal requirements, shall be in accordance with the provisions of OAR 162-010-200 through 162-010-320.
(9) Audit reports are required to contain, immediately inside the front cover, the names and mailing addresses of officers of the municipal corporation and members of its governing body. In addition, audit reports of special districts, as defined by law, shall contain the name of the district's registered agent and its registered address. If a special district has not designated a registered agent or registered address, then the audit report shall so indicate.
(10) It is the responsibility of the municipal corporation to file a copy of its audit report with the Secretary of State. The reports are subject to review for compliance with these rules, and the Secretary of State may call for submission by the independent auditor of the work papers and audit programs covering an engagement. The work papers and audit programs must contain satisfactory written evidence of compliance with these rules.
(11) Within 30 days after delivering the audit report, as required by law, the independent auditor shall submit a summary of the revenues and expenditures of the municipal corporation for the period covered by the audit. The summary shall be made in the manner and on forms prescribed by the Secretary of State. One copy of the summary shall be delivered to the municipal corporation. A supply of the forms will be furnished to accountants upon request. Instructions are as follows:
(a) General: The summary shall include the revenues and expenditures or receipts and disbursements presented in the government-wide statement of activities.
(b) The amounts shall also include fiduciary fund additions and deductions.
(c) Revenues and expenditures of component units and turnovers to other governments should be identified in the summary as reductions in arriving at the net totals. Those amounts are included in separately issued financial statements.
Stat. Auth.: ORS 297
Stats Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0015; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-91; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0030
General Requirements
(1) Audits are to be undertaken in accordance with a contract executed by the independent auditor and the municipal corporation. The contract shall set forth clearly the scope of work to be conducted by the auditor and must include provision for an expression of opinion on the financial statements of the municipal corporation and for a determination of compliance with finance related legal provisions. If the municipal corporation does not prepare the financial statements set forth in OAR 162-010-0050 through 162-010-0190, the contract must provide for the auditor to make a reasonable attempt to draft them for and on behalf of the municipal corporation. Standard Form of Contract is as follows:
THIS CONTRACT, made this __________ day of ________, 20___, in accordance with the requirements of Oregon Revised Statutes 297.405 through 297.555 between __(Auditor)_, Certified Public Accountant(s) of _______, Oregon, and the ____(Client)____, Oregon, provides as follows:
It hereby is agreed that ___(Auditor)___ shall conduct an audit of the accounts and fiscal affairs of ____(Client)____, Oregon, for the period beginning _________, and ending __________, (and annually thereafter) in accordance with the Minimum Standards for Audits of Municipal Corporations as prescribed by law. The audit shall be undertaken in order to express an opinion upon the financial statement of ___(Client)___, Oregon, and to determine if the ___(Client)___ has complied substantially with appropriate legal provisions.
____(Auditor)____ agree(s) that the services contracted to perform under this contract shall be rendered by or under personal supervision and that the work will be faithfully performed with care and diligence.
It is understood and agreed that, should unusual conditions arise or be encountered during the course of the audit whereby the services of ____(Auditor)____ are necessary beyond the extent of the work contemplated, written notification of such unusual conditions shall be delivered to the _(Client)_, Oregon, who shall instruct in writing __(Auditor)__ concerning such additional services, and that a signed copy of each such notification and instruction shall be delivered immediately to the Secretary of State by the party issuing the same.
The audit shall be started as soon after this contract is executed as is agreeable to the parties hereto and shall be completed and a written report thereon delivered within a reasonable time, but not later than six months, after the close of the audit period covered by this contract. Adequate copies of such report shall be delivered to the __(Client)__, Oregon, and its form and content shall be in accordance with and not less than that required by the Minimum Standards for Audits of Oregon Municipal Corporations.
It is understood and agreed that the _____(Client)____, Oregon, is responsible for such financial statements as may be necessary to fully disclose and fairly present the results of operations for the period under audit and the financial condition at the end of that period. Should such financial statements not be prepared and presented within a reasonable period of time, it is understood that ____(Auditor)____ shall draft them for ____(Client)____, Oregon. The cost of preparing such financial statements shall be [(in addition to) (included in)] the fee for conducting the audit as set forth in Paragraph 7 below.
It is understood and agreed that either party may cancel this contract by giving notice in writing to the other party at least (ninety days) prior to July 1 of any year.
In consideration of the faithful performance of the conditions, covenants, and undertakings herein set forth the ____(Client)____, Oregon, hereby agrees to pay ___(Auditor)___ the sum of ____(a reasonable fee)____ and the ___(Client)____, Oregon, hereby affirms that proper provision for the payment of such fee has been or will be duly made and that funds for the payment thereof are or will be made legally available.
___________________________
(Auditor)
by
___________________________
___________________________
(Client)
by
___________________________
(2) Audits are to be conducted in accordance with the standards set forth in OAR 162-10-020.
(3) The scope of the audit of a municipal corporation shall include programs wholly or partially funded by other federal, state, or local governmental agencies. In determining the audit procedures to be applied to such programs, the independent auditor shall consider any specific audit procedures which may have been developed for those programs by appropriate governmental agencies. The auditor shall also determine if financial reporting requirements applicable to such programs have been complied with.
(4) If the municipal corporation requests the scope of the audit to be expanded to include a performance audit, a separate contract covering the expanded scope audit should be executed. Performance audits should be conducted in accordance with Government Auditing Standards published by the Comptroller General or the United States.
Stat. Auth.: ORS 297.465
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renum?bered from 165-030-0020; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-91; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10; AUDIT 1-2011, f. & cert. ef. 1-27-11
162-010-0050
Financial Statements
(1) In 1984, the Financial Accounting Foundation created the Governmental Accounting Standards Board. The GASB is recognized as the standard-setting authority of GAAP for state and local governments. As such, fair presentation of financial position and results of operations in conformity with GAAP for Oregon municipal corporations are those financial statements consistent with GASB Statements and Interpretations and the hierarchy of GAAP applicable to state and local governments established by the AICPA and adopted in GASB Statement Number 55 -- The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments.
(2) Since the focus of accounting in a governmental unit is the individual fund, the financial statements to be presented in the municipal corporation's annual report must also include nonmajor fund combining statements.
(3) Compliance with municipal audit law includes financial statements prepared on a basis of cash receipts and disbursements.
(4) In the event information necessary to prepare the financial statements or any of them individually, is not readily available, or is not maintained by the municipal corporation, then appropriate disclosure must be made in the accountant's report.
Stat. Auth.: ORS 297
Stats Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0100; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-91; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0115
Required Supplementary Financial Information (RSI)
In addition to financial statements, the Governmental Accounting Standards Board has determined that certain statements, schedules, statistical data, or other information are necessary to supplement, although not required to be a part of, the basic financial statements. These standards do not place any additional responsibilities upon the independent auditor beyond those required by generally accepted auditing standards and OAR 162-10-0020(8)(b).
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07
162-010-0120
Other Supplementary Financial Information
In addition to financial statements, notes and required supplementary information thereto, certain other financial information is considered necessary for full disclosure of the fiscal affairs of Oregon municipal corporations. Whenever appropriate, audit reports must contain the other financial information set forth in OAR 162-010-0130 through 162-010-0190 or reasonable combinations thereof. In the event information necessary to prepare these schedules, or any of them individually, is not readily available or is not maintained by the municipal corporation, then appropriate comments to that effect shall be included in the audit report. If appropriate, these schedules may be included in the notes to the financial statements.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0135; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01
162-010-0130
Schedule of Revenues, Expenditures/Expenses, and Changes in Fund Balances/Net Assets, Budget and Actual (Each Fund)
An individual schedule of revenues, expenditures/expenses, and changes in fund balances/net assets, budget and actual, must be prepared for each fund of any municipal corporation for which budgets are legally required. They must compare estimated with actual revenues or receipts, transfers in, expenditures or disbursements, transfers out and ending balances on the basis of the legally adopted budget. If the municipal corporation has made appropriations in a manner which differs materially from the presentation of estimated expenditures in the budget document, a separate schedule must be included which compares actual expenditures/expenses with the legally adopted appropriations.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0125; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0140
Schedule of Accountability for Independently Elected Officials
A schedule of accountability must be prepared for each independently elected official collecting or receiving money in the municipal corporation. This schedule is to present, at a minimum, beginning balances, receipts, disbursements, refunds, and turnovers to the appropriate governmental official, reconciled to cash on hand at the beginning and end of the audit period.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0140; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-9; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07
162-010-0150
Schedule of Property Tax Transactions or Acreage Assessments
A schedule of property tax transactions or acreage assessments is required which presents the current year and each of the previous five years, separately, and all prior years in the aggregate. The schedule should include beginning of year balances, current year levy, adjustments, and end of year balances. The schedule may include such statistical information as may be desirable in order to fully and adequately disclose the property tax or acreage assessment transactions of the municipal corporation.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0145; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0160
Schedule of Bonded or Long-Term Debt Transactions
At a minimum, this schedule is to include the total outstanding matured and unmatured principal and matured interest obligations at the beginning of the period, the maturities and redemptions during the period, and the outstanding matured and unmatured principal and matured interest at the end of the period.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0150; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95
162-010-0170
Schedule of Future Requirements for Retirement of Bonded or Long-Term Debt
At a minimum, this schedule is to present, by fund and by bond or other type of issue, in the aggregate and for each of the five succeeding years, and in five-year increments thereafter, the amount required for the retirement of bonded or other long-term debt, both principal and interest.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0155; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07
162-010-0190
Other Financial or Statistical Information
The report may include such other financial or statistical information as desired by the municipal corporation, including financial statements relating specifically to programs funded wholly or partially by other governmental agencies.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0195; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07
162-010-0200
Required Disclosures and Independent Auditors Comments
Each audit report shall contain appropriate comments and disclosures relating to the independent auditor’s review of fiscal affairs and compliance with legal requirements. These comments and disclosures shall, at a minimum, reference the subjects set forth in OAR 162-010-0210 through 162-010-0320. The auditor is required to prepare working papers that provide a clear understanding of the work performed, the evidence obtained and its source, and the conclusions reached to support each disclosure.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 328.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0200; AUDIT 1-1998, f. 2-2-98, cert. ef. 2-15-98; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0230
Accounting Records and Internal Control
The auditor shall state either here or in a separately issued report, that in planning the audit, he or she followed generally accepted auditing standards in obtaining an understanding of the entity and its internal control over financial reporting. If significant deficiencies, material weaknesses or other recommendations for improvements have been communicated in a separate letter to management or in a report issued in accordance with Government Auditing Standards, reference to it should be made.
Stat. Auth.: ORS 297.465
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0215; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-91; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0240
Public Fund Deposits
There shall be comments regarding the municipal corporation's compliance with ORS Chapter 295 — Depositories of Public Funds and Securities.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renum?bered from 165-030-0220; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0250
Indebtedness
There shall be comments regarding the municipal corporation’s compliance relating to short-term and long-term debt. These comments shall include limitations on the amount of debt which may be incurred, liquidation of debt within the prescribed period of time, and compliance with provisions of bond indentures or other agreements, including any restrictions on the use of moneys available to retire indebtedness.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0225
162-010-0260
Budget
Compliance with legal requirements relating to the preparation, adoption, and execution of the annual or biennial budget for the year being audited, and the preparation and adoption of the budget for the next succeeding year shall be disclosed. Also, the auditor shall disclose the financial or organizational level at which the governing body makes the annual appropriations. The minimum levels of legal appropriation are established in ORS 294.435.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0230; DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07
162-010-0270
Insurance and Fidelity Bonds
Compliance with legal requirements and the government’s policies relating to insurance and fidelity bond coverage shall be disclosed. Recommendations for further review of coverage by qualified individuals may be included, if appropriate.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renum?bered from 165-030-0235; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0280
Programs Funded from Outside Sources
(1) Compliance with appropriate laws, rules, and regulations pertaining to programs funded wholly or partially by other governmental agencies shall be disclosed. This would include, but not necessarily be limited to, state and federal governmental agencies. Material instances of noncompliance must be sufficiently disclosed to enable the municipal corporation and the appropriate governmental agencies to initiate corrective action.
(2) If separate reports have been issued to disclose compliance with federal financial assistance programs under the Single Audit Act Amendments of 1996 (the Single Audit Act), then reference to those reports is required in this disclosure.
Stat. Auth.: ORS 297.465
Stats. Implemented: ORS 297.465
Hist.: SD 104, f. 2-20-76, ef. 7-1-76; DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0240; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-91; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07
162-010-0295
Highway Funds
Compliance with legal requirements, (as contained in Article IX, section 3a of the Oregon Constitution), pertaining to the use of revenue from taxes on motor vehicle use and fuel shall be disclosed. Also, compliance with statutory requirements pertaining to the use of road funds (as contained in ORS 294, 368, and 373) shall be disclosed.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: DOA 2-1995, f. 3-1-95, cert. ef. 7-1-95; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07
162-010-0300
Investments
Compliance with legal requirements, (as contained in ORS Chapter 294), pertaining to the investment of public funds shall be disclosed.
Stat. Auth.: ORS 297.465
Stats. Implemented: ORS 297.465
Hist.: DOA 3-1986, f. & ef. 5-29-86; DOA 1-1991, f. 3-8-91, cert. ef. 7-1-91
162-010-0310
Public Contracts and Purchasing
Compliance with Public Contracting Code, ORS Chapters 279A, 279B and 279C pertaining to: The awarding of public contracts; and the construction of public improvements shall be disclosed.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: DOA 3-1986, f. & ef. 5-29-86; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0315
State School Fund
There shall be comments regarding the school district’s compliance with legal requirements as stated in ORS 327.013 and as further defined by the Oregon State Department of Education pertaining to the district’s calculation and reporting of the factors used to compute the State School Fund distribution.
Stat. Auth.: ORS 297
Stats. Implemented ORS 328.465
Hist.: AUDIT 1-1998, f. 2-2-98, cert. ef. 2-15-98
162-010-0316
Public Charter Schools
Public charter schools created under ORS Chapter 338 are subject to review and compliance with the following:
(1) Insurance and Fidelity Bonds -- OAR 162-010-0270;
(2) Programs Funded from Outside Sources -- OAR 162-010-0280; and
(3) Public Contracts and Purchasing -- OAR 162-010-0310.
Stat. Auth.: ORS 297
Stats. Implemented ORS 328.465
Hist.: AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
162-010-0320
Other Comments and Disclosures
The accountant shall include such other comments or disclosures with respect to the review of fiscal affairs and compliance with legal requirements as may be appropriate in the circumstances.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: DOA 3-1986, f. & ef. 5-29-86, Renumbered from 165-030-0295
162-010-0330
Extensions of Time to Deliver Audit Reports
If the required report is not filed with the Secretary of State within 180 days following the end of the fiscal year, the municipal corporation shall file a written request for extension of time. The request shall state the reasons for the delay and the expected filing date of the report. The Secretary of State, for good cause shown, may grant the request for a reasonable period of time.
(1) Requests for extensions of time to deliver audit reports must be submitted on forms provided by the Secretary of State. The request must contain the following information:
(a) The name and registered or mailing address of the municipal corporation;
(b) The name, address, and signature of the accountant or firm, if known, conducting the audit;
(c) The accounting period under audit;
(d) A statement setting forth the reasons for the delay in delivering the audit report;
(e) The signed approval or disapproval of the request by the chair of the governing body, or managing or executive officer, of the municipal corporation. Reasons for disapproval must be included;
(f) Requests applicable to school districts and community colleges must also contain the signed approval or disapproval of the local district superintendent or the superintendent's designee.
(2) Three copies of the extension request shall be submitted to the Secretary of State. After acting upon the request, one copy will be returned to the accountant and one copy will be furnished to the municipal corporation. The local district superintendent will also be furnished a copy of requests applicable to school districts and community colleges. If a request is disapproved by the Secretary of State, reasons therefore shall be given in writing to the accountant and to the municipal corporation.
Stat. Auth.: ORS 297
Stats. Implemented: ORS 297.465
Hist.: SD 115, f. & ef. 10-1-77; DOA 3-1986, f. & ef. 5-29-86; Renumbered from 165-030-0670; AUDIT 2-2001, f. 4-26-01, cert. ef. 7-1-01; AUDIT 1-2007, f. 6-7-07, cert. ef. 6-30-07; AUDIT 1-2010, f. 3-23-10, cert. ef. 4-1-10
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