According to Keep Oregon Accountable, multiple programs in Oregon require enhancements to meet federal regulations.
Every year, the Audits Division of the Oregon Secretary of State conducts two significant financial audits. These audits include the Annual Comprehensive Financial Report and the Statewide Single Audit.
This week, the Audits Division unveiled its annual report titled “Keeping Oregon Accountable” for the fiscal year 2023. The report provides a summary of the results of the two audits conducted by the division.
According to the Oregon Secretary of State’s office, the summary report stands out as it marks the first time in over 20 years that the Audits Division has issued an adverse opinion and disclaimer of opinion.
The auditors from the state conducted a follow-up on the previous findings that led to unmodified opinions and concluded that the agency has taken the essential measures to rectify the adverse opinion.
In a recent release, Audits Director Kip Memmott expressed both positive and negative aspects of this year’s Single Audit. While he was satisfied with the significant corrective action taken to tackle the adverse opinion from last year, there are still some serious control weaknesses in other crucial programs that require attention. It’s worth noting that some of these weaknesses have persisted for a decade or more, highlighting the need for swift action.
To continue receiving federal assistance, states are mandated by the federal government to conduct audits on both their financial statements and their compliance with federal program requirements.
During the pre-pandemic times, Oregon usually received an estimated amount of $11 billion to $12 billion every year. However, due to the impact of the coronavirus pandemic, the funding increased significantly, surpassing $20 billion annually.
During the fiscal year 2023, auditors discovered control weaknesses that had persisted for several years. As a result, they issued a total of six qualified opinions and one disclaimer of opinion. Fortunately, none of the programs received an adverse opinion.
According to the release, if an audit reveals that the controls are satisfactory and the program is adhering to the federal requirements, auditors will issue an unmodified or ‘clean’ opinion. However, if the auditors have any concerns about the quality of internal controls, they may issue modified opinions such as qualified or disclaimer of opinions.
Oregon Housing and Community Services (OHCS) has received a disclaimer of opinion for the Emergency Solutions Grant Program for the second consecutive time.
According to the release, when auditors are unable to provide an opinion on program compliance due to a lack of adequate evidence, it results in a disclaimer of opinion.
In the meantime, experts have shared their qualified opinions, which are less critical, but still highlight the fact that the programs are lacking sufficient internal controls to prevent or identify major non-compliance issues.
Qualified opinions were given to a total of six programs across three agencies, namely OHCS, the Oregon Department of Human Services, and the Oregon Health Authority.
For several years, both the Temporary Assistance for Needy Families and the Low-Income Home Energy Assistance program have received qualified opinions.
It is crucial for federal granting agencies to take action on the results of these audits, as they have the power to ensure compliance with grant regulations.
According to the release, not addressing crucial control weaknesses may result in punitive measures such as sanctions or a modification in forthcoming funding. Alternatively, it could be a chance for the granting agency to explain its prerequisites.
