We are excited to share that HB 2110 has been signed by Governor Kotek!

HB 2110 is the Secretary of State’s legislation which makes several changes to the statutes governing municipal audits.  The bill increases the threshold for the municipal audit exemption from $500,000 to $1,000,000 and the review threshold from $150,000 to $250,000.  These thresholds have not been increased since 2005; SB 837 (2005), which enacted the increase, was passed in 2005 when SDAO spearheaded the legislation.  

Over the past few years, the cost of doing business has gone up exponentially causing small districts to exceed the $150,000 threshold provided for in ORS 297.435. A municipal audit review can cost a district between $7,000 to $10,000 which can cause financial hardship for many of our small districts.  As an example, one of our small districts reported to SDAO during the interim that they were on the verge of going over the $150,000 threshold last fiscal year by roughly $35,000 (the total budget was $185,000).  After many calls to auditors approved by the Secretary of State, the district received a handful of calls/emails in response.  The auditors all had the same answer, “we aren’t taking new clients.”  There is a shortage of auditors who are willing to do this work. 

In addition, it doesn’t make sense to spend $10,000 because a district exceeds a threshold by several thousand dollars.  Spending $10,000 for audit purposes does not make good fiscal sense and can amount to a few months of payroll, typical monthly expenditures or elimination of a small project that requires funding. 

HB 2110 will benefit a large number (nearly 400) of small districts who are having difficulty, not only finding a municipal auditor to serve the district but affording the cost of a municipal audit. SDAO introduced HB 2254 to accomplish the same provisions contained in HB 2110. SDAO is grateful that the Secretary of State’s Office included our suggested language in HB 2110.