Building Official Audit

Senate Bill 866 (2021) requires any city or county using a contracted building official to undergo an audit and ensure the results of that audit are made available. (OAR 918-020-0090(1)(o)

If:
A city or county uses a contracted building official,

THEN:

Periodically an independent audit is required of the funds and compliance of that program.
The audit report is to be made available, including an internet posting.

ORS 455.202(6)

(6)(a) A city that procures services from a contract building official shall have an independent auditor examine the finances of the city’s building inspection program at least once every two years. The city may have the audit performed in conjunction with an audit under ORS 297.425. A county that procures services from a contract building official shall have an audit performed that covers the period of time during which the contract building official performed services for the county.

(b) At a minimum, an audit under this subsection must examine all collections and usage of permit fees and all expenditures of moneys that have occurred from the proceeds of the fees since the last audit or since a municipality began procuring services from the contract building official, whichever period is shorter, and must verify that the municipality dedicates all fees the municipality collects for plan review, permit issuance or administering and enforcing specialty codes only to the purposes specified in ORS 455.210 and 479.845.

(c) A municipality shall make the results of each audit available to the public by easily accessible electronic means, including by posting the results on the municipality’s website.

Clarification from the Department of Consumer and Business Services (DCBS) is helpful for auditors and municipalities navigating these requirements.

Statute uses the terms including “examine” and “audit” interchangeably. What type of engagement is required?︿

DCBS doesn’t intend to regulate the type of engagement or format of reporting. Municipalities can engage an auditor to perform any of the following engagement types to satisfy the requirements of this statute:

Include the work as part of a financial statement audit performed in accordance with Municipal Audit Law (ORS 297.425) and generally accepted auditing standards promulgated by the American Institute of Certified Public Accountants (AIPCA).
Perform an examination in accordance with AT-C Section 205A – Examination Engagements Promulgated by the AICPA
Perform agreed upon procedures in accordance with Statement on Standards for Attestation Engagements 19 - Agreed Upon Procedures Engagements, issued by the Auditing Standards Board.

Where are engagement results and reports filed?︿

The engagement reports must be easily available to the public and should also be posted to the city or county website. It is expected the reports will be made available to DCBS during periodic renewal and certification of the program, as requested.

DCBS is not requiring engagement reports be filed with their office. Reports also do not need to be filed with the Secretary of State Audits Division as part of the annual financial report required by ORS 297.425.

What are the objectives of the engagement?︿

Per ORS 455.202(6)(b), the minimum objectives of the engagement are to (1) examine the collections and usage (expenditures) of permit fees and other proceeds during the period, and (2) verify they were used only for allowed purposes, as specified in ORS 455.210 and 479.845. Are the amounts reported complete and accurate, and were expenditures made in compliance with laws and rules.

Amendments and new provision found codified in ORS Chapter 455. For additional clarification you may contact DCBS rules coordinators in the Building Codes Division at BCD.Jurisdictionsupport@DCBS.oregon.gov.

Questions?

Call our office at 503-986-2255 or email municipalfilings.sos@sos.oregon.gov.