Chapter 3.05 City Auditor's Audit Services Division

(Amended by Ordinance No. 188842, effective March 30, 2018.) 

1. The Audit Services Division is established within the City Auditor’s Office, answerable directly to the City Auditor in accordance with City Charter.
    
2. The Audit Services Division will adhere to generally accepted government auditing standards in conducting its work and will be considered independent as defined by those standards.
    
3. If the Audit Services Division conducts an audit of an activity for which the City Auditor is or was responsible, the audit scope will state that the auditors are not organizationally independent with regard to the entity being audited.

(Amended by Ordinance No. 188842, effective March 30, 2018.) 

1. The Auditor shall conduct financial and performance audits of all departments, bureaus, offices, boards, activities, functions and administrative agencies of the City of Portland to independently determine whether:
    
   1. Activities and programs being implemented have been authorized by City Charter or Code, state law or applicable federal law or regulations;
       
   2. Activities and programs are being conducted in a manner contemplated to accomplish the objectives intended by City Charter or Code, state law or applicable federal law or regulations;
       
   3. The activities or programs efficiently and effectively serve the purpose intended by City Charter, Code, state law or applicable federal law or regulations;
       
   4. Activities and programs are being conducted and funds expended in compliance with applicable laws;
       
   5. Revenues are being properly collected, deposited and accounted for;
       
   6. Resources, including funds, property and personnel, are adequately safeguarded, controlled and used in a faithful, effective and efficient manner;
       
   7. Financial and other reports are being provided that disclose fairly and fully all information that is required by law, that is necessary to ascertain the nature and scope of programs and activities and that is necessary to establish a proper basis for evaluating the programs and activities;
       
   8. There are adequate operating and administrative procedures and practices, systems or accounting internal control systems and internal management controls which have been established by management; or
       
   9. Indications of fraud, abuse or illegal acts are identified for further investigation.
       
2. Audits shall be conducted in accordance with Government Auditing Standards for financial and performance audits issued by the Comptroller General of the United States.

(Amended by Ordinance No. 188842, effective March 30, 2018.) 

1. By the beginning of each fiscal year, the Auditor shall submit an annual audit plan to Council for review and comment.  The plan shall include the departments, bureaus, offices, boards, activities, functions and administrative agencies scheduled for audit during the year.  This plan may be amended during the year after review with Council members affected by the change.  Additionally, the Auditor may spontaneously initiate and conduct any other audit deemed necessary to undertake.
    
2. In accordance with independence provisions of generally accepted government auditing standards, the authority for selection of audit areas shall reside solely with the City Auditor.

1. Council members may request that the Auditor perform special audits that are not included in the annual audit plan. After consultation with Council members whose work would need to be postponed, special audits may become amendments to the annual audit plan.
    
2. Special audit reports will be handled the same as regular audit reports, except that in personnel matters of a confidential nature, reporting of results may be limited to the Commissioner in Charge and the Mayor.

(Amended by Ordinance No. 188842, effective March 30, 2018.)  In accordance with City Charter, subject to collective bargaining obligations to the City’s recognized bargaining units, the Auditor shall have timely access to all employees, information and records required to conduct an audit or otherwise perform audit duties, including confidential and legally privileged information and records so long as privilege is not waived as to third parties.  All officers and employees of the City of Portland shall timely furnish the Auditor with requested information and records within their custody regarding powers, duties, activities, organization, property, financial transactions and methods of business required to conduct an audit or otherwise perform audit duties.  In addition, they shall provide timely access for the Auditor to inspect all property, equipment and facilities within their custody.  If such officers or employees fail to timely produce the aforementioned information, then the Auditor, subject to Council approval, may, without fee, cause a search to be made and exhibits to be taken from any book, paper or record of any such official or employee, excepting personal information, and every office having the custody of such records shall make a search and forward such requested exhibits to the Auditor.

(Added by Ordinance No. 183217; amended by Ordinance No. 188842, effective March 30, 2018.)  The Auditor shall not disclose confidential or legally privileged information and records and shall be subject to the same penalties as the legal custodian of records for any unlawful or unauthorized disclosure. The Auditor shall maintain the confidentiality of information submitted in confidence and the identity of the provider of such information to the extent allowed by law, except as the Auditor deems necessary to discharge the Auditor's duties or as directed by the District Attorney pursuant to a public records request or by a court of competent jurisdiction.

(Amended by Ordinance No. 188842, effective March 30, 2018.)  A final draft of each audit report will be forwarded to the auditee and the Commissioner in Charge for review and comment before it is released.  The auditee must respond in writing specifying agreement with audit findings and recommendations or reasons for disagreement with findings and/or recommendations, plans for implementing solutions to identified problems and a timetable to complete such activities.  The response must be forwarded to the Auditor within the time frame specified by the Auditor.  The Auditor will include the full text of auditee and Commissioner responses in the report.

(Amended by Ordinance No. 188842, effective March 30, 2018.)

1. Each audit will result in a written report.
    
2. Reports are to be issued promptly so as to make information available for timely use by Council, management and other interested parties.
    
3. The Auditor will submit each audit report to the Council and will retain a copy as a permanent record.
    
4. If appropriate, the audit report shall contain the professional opinion of the Auditor or the contract auditor concerning the financial statements issued by the auditee or if the audit is a performance audit, the report will contain the professional conclusions of the audit regarding the management activities audited.
    
5. Audit reports issued by the Auditor shall contain:
    
   1. A statement of audit objectives and a description of the audit scope and methodology;
       
   2. A statement that the audit was performed in accordance with generally accepted government auditing standards;
       
   3. A description of all significant instances of non‑compliance and abuse and all instances of illegal acts found during or in connection with the audit;
       
   4. A full discussion of audit findings and conclusions, including the cause of problem areas and recommendations for necessary or desirable action;
       
   5. A statement of all significant management controls that were assessed and any significant weaknesses found;
       
   6. Pertinent views of responsible officials concerning audit findings, conclusions and recommendations;
       
   7. A listing of any significant issues needing further study and consideration;
       
   8. A description of noteworthy accomplishments of the auditee.

If the Auditor detects apparent violations of law or apparent instances of malfeasance or nonfeasance by an officer or employee or information that indicates derelictions may be reasonably anticipated, the Auditor shall report the irregularities to the Commissioner in Charge and the Mayor. If the irregularity is criminal in nature, the Auditor shall immediately notify the City Attorney and the District Attorney in addition to those previously cited.

(Amended by Ordinance No. 188842, effective March 30, 2018.)  Within budget limitations, the Audit Services Division may obtain the services of certified public accountants, qualified management consultants, or other professional experts necessary to perform audit services.  An audit that is performed by contract must be conducted by persons who have no financial interests in the affairs of the governmental unit or its officers.  The Auditor’s Audit Services Division will coordinate and monitor auditing performed by public accounting or other organizations employed under contract by the City of Portland to assist with audit related activities.

In choosing the outside independent auditors to conduct the City’s annual financial statement audit, the Auditor will convene a committee of at least three City bureau managers, including the Auditor or the Auditor’s representative to prepare a request for proposal and to screen applicants.  The Auditor’s selection of a certified public accounting firm for the annual financial audit must be approved by Council.  Normally, this contract will be for a three to five year period.

The Audit Services Division of the City Auditor’s Office shall be subject to peer review at least once every three years by a professional, non-partisan objective group utilizing guidelines adopted by the National Association of Local Government Auditors. The review will evaluate compliance with generally accepted government auditing standards. A copy of the written report of any such independent review shall be furnished to each member of the City Council.