Audit Release: Keeping the State of Oregon Accountable, Fiscal Year 2015

Every year the Audits Division of the Secretary of State’s Office audits the State of Oregon’s financial statements to determine whether the information reported is reliable and accurate. This annual audit provides the state with our professional opinion about the completeness, accuracy, and validity of the state’s accounting information. See the Financial Statement Audit section of this report for more discussion of Oregon’s financial status.

In addition, we annually perform compliance audits of programs funded by the federal government to determine if they meet federal requirements for tracking and using federal dollars. These programs provide billions of federal dollars to Oregon citizens for important social, economic, and environmental missions. See the Federal Compliance Audits section of this report for more discussion of Oregon’s compliance with the requirements of federal programs.

The division communicates errors identified in financial reporting, financial processes, and non-compliance to state agencies and provides recommendations for correction to assure the integrity of financial information provided to the public. This report, “Keeping the State of Oregon Accountable,” reflects the findings of those annual audits of publicly funded programs. Important conclusions in this report are:

Audit of the State of Oregon’s Financial Statements

  • We concluded that the state’s financial statements, as corrected, are fairly presented in conformance with Generally Accepted Accounting Principles.
  • We reported fewer internal control weaknesses this year and found that management corrected several of the prior year findings.
  • Three major changes impacted Oregon’s financial statements for fiscal year 2015:  a $1.6 billion increase in Medicaid expenditures, a change in the reporting of three major universities, and new reporting standards that changed how pension information is presented.

Federal Compliance Audits

  • Because of ongoing internal control and compliance weaknesses, auditors were required to audit an increased percentage of the state’s federal expenditures.
  • Our audit included 35 findings related to 14 audited federal programs at seven state agencies. We issued “qualified” opinions on five programs, which indicate a department’s internal controls are inadequate to prevent or detect significant noncompliance in a timely manner.

Read full report here

 

For more information about audit results, you can also see the official reports on our website:

Oregon’s Financial Statements:

http://sos.oregon.gov/audits/Documents/2016-03.pdf

Single Audit (including Federal Compliance) Results:

http://sos.oregon.gov/audits/Documents/2016-09post.pdf

 

Featured Financial Audit New Audit Release Noteworthy

A new approach in financial accountability

Portland just released its biennial financial condition report, which is a great tool that auditors in our region use. Auditors for Portland, Metro, the State of Oregon, and Multnomah County all regularly issue financial condition reports. These reports follow the same method of looking at key financial indicators over a ten year period to spot trends. These trends may show the recovery from a problem, or could be a warning that a problem is creeping up, year by year.

They use graphics in creative ways to simply tell these stories. The reports are a great way to inform the public about the sources of a government’s money, and where that money is spent.

Featured Financial Audit

2014 Oregon Financial Condition


Oregon Financial Condition Report


The impact of the Great Recession and the beginnings of recovery are told in this report about Oregon’s finances. The report covers the period ending June 30, 2014.

Oregon was hard hit, forcing difficult budget decisions to bring spending in line with revenues. The state’s biggest challenge was meeting the increased need for state services without enough state revenues, though extra federal funding helped.

As the economy recovers, and Oregonians get back to work, it is a good time to examine the state’s financial health for areas that need attention.

  • The state borrowed to build infrastructure and create jobs but the debt payments continue after the money is spent, leaving less money for future maintenance.

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  • Health and human services spending grows year after year, reflecting the continued needs of the Oregonians whose income hasn’t rebounded enough from the recovery.
  • Oregon also relied on its Rainy Day Fund during the recession but has not yet begun to rebuild it.

It’s important to note areas of success and we should be pleased to see some encouraging longer-term trends.

  • State health care costs for employees have leveled off in the past four years, and declined slightly in 2014 as a result of employee contributions.

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  • Crime rates for violent crimes continue their long decline though property crimes recently increased slightly.
  • With federal assistance, Oregon had sufficient unemployment insurance reserves to provide benefits through the recession, and has already made great progress rebuilding the reserves.

Sound financial condition is vital for sustainable government services. The state needs to continue rebuilding, and prepare for the next economic storm.

Read the report

Financial Audit

Three Fundamental Challenges for Oregon


Oregon Challenges: An Audits Overview


This report focuses on three fundamental areas of state government that pose critical challenges to Oregon’s progress:

  • Educating Oregon’s workforce
  • Developing Oregon’s infrastructure
  • Strengthening Oregon’s Finances.
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Executive Summary


This report focuses on three fundamental areas of state government that pose critical challenges to Oregon’s progress.  Each area has been the subject of multiple audits, and this report synthesizes past Secretary of State Audits Division reports and related research on each area.  The three areas are:

  • Educating Oregon’s Workforce: Oregon must have an educational system organized for student success, and we must identify ways to help Oregonians enter the workforce.  Our audits shed light on how Oregon might better educate and mobilize its workforce.
  • Developing Oregon’s Infrastructure: Oregon faces critical infrastructure needs, including the need to upgrade state information technology systems and to fund future transportation projects.  Our audits have identified strategies to address these critical infrastructure needs.
  • Strengthening Oregon’s Finances: Oregon faces critical issues with state and local government financing.  Our audits have addressed the financial strain faced by our struggling county partners, ways to collect more debt owed to the state, and ways to build sustainable finances for state government.

We highlight these challenges because they affect important fundamentals of state government – educating its workforce, infrastructure, and finances. We also highlight them because the challenges are large and difficult. While we have seen some progress and small successes, they need more attention and committed efforts from state leaders. More challenges exist and we will periodically report on them as we complete future audits, highlighting key recommendations and agency efforts underway that could address those challenges.

Read the full report

New Audit Release