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Oregon Secretary of State Gives Portland Until Month’s End to Clean Up ‘Material Weaknesses’ in Its Annual Budget Top Stories By Lucille McNamara On Jan 5, 2026 FILE - Portlandia Statue on the Portland Building | Photo by Seth Smigelski The Oregon Secretary of State has granted the City of Portland an extension to January 31, 2026, to file a corrective Plan of Action for its 2024-25 Financial Report, after auditors uncovered “material weaknesses” in the original report. The city received a clean bill of health for its financial report, but will have to file a corrective Plan of Action because of weaknesses in controls flagged by Portland City auditors. Baker Tilly . Here is what a corrective Plan of Action must include and when it is due under Oregon audit rules: Requirement What it means File within 30 days Plan must be filed with the Secretary of State within 30 days after the audit report is filed. Adopted by the governing body Council or board must formally adopt it, not just staff. Signed by an elected or appointed official Unsigned plans, or plans signed only by management, are not accepted as meeting the requirement. Address audit deficiencies At minimum, include actions for any deficiency the auditor classifies as a material weakness or significant deficiency. Include timeline Plan should list corrective steps and the estimated time needed to complete them. Budgetary Flaws Amount to More Than $235 Million Material weaknesses amounting to $235.4 million that were pinpointed by the auditors include: Parks and Recreation failed to close $159 million of completed capital projects and transfer them to fixed assets for several years, as well as to expense (reduce revenue) $6.7 million in missed depreciation expense. Prosper Portland failed to record a liability of $32.4 million for pollution remediation costs and is now required to expense that overhead. City Fleet failed to close $30 million of completed capital projects and transfer them to fixed assets for several years, resulting in an expensed depreciation expense of $232,807. Bureau of Transport failed to close $14 million of capital projects and to transfer them to fixed assets. Tidings Data Snapshot Biggest audit adjustments flagged in Portland FY ended June 30 2025 $200.2M Reclassified completed projects from construction work in process to assets in service $6.8M Missed depreciation expense recognized on projects that were not closed out timely $0.74M Expenses removed that were incorrectly included in construction work in process $32.4M Prosper Portland pollution remediation adjustment added to liability and expense Source: City of Portland Council audit materials / Baker Tilly audit results slides for FY ended June 30 2025 Dailytidings.com The financial impact of these oversights will cost the City of Portland an additional $223,278 annually to hire a Financial Analyst to focus on the City Fleet, and the additional cost to Central Accounting to assist bureaus by prioritizing resources. Previously, the City of Portland also had to submit a Plan of Action for a material weakness in its 2023-24 Financial Report. On that occasion, the Bureau of Transport failed to transfer $262 million in capital projects as fixed assets and $12 million as depreciation expenses. Multnomah County Portland Share Twitter Facebook ReddIt WhatsApp Pinterest Email