​​​​​Impact of HB 2110

​​​​​​​​​​​During the 2023 legislative session, House Bill 2110 amended Municipal Audit Law (ORS 297.405-297.990); these changes become effective January 1, 2024. Key changes include:

• Updated thresholds: Audits are required for counties and school districts and are now required for entities spending more than $1 million annually — an increase from $500,000. All other entities may be eligible for an audit exemption. Entities spending less than $250,000 may be eligible to file a self-prepared report in lieu of audit. 

​ ​

​​Report Type	Threshold as of January 1, 2024​
​​Audit	​> $1,000,000​
​AUP	​$250,001 - $1,000,000
​Self-Prepared	​≤ $250,000

​​ ​

• Agreed Upon Procedures (AUP) reporting: Replacing review reports, AUP reporting directs auditors to perform and report results of procedures specified in the Oregon Minimum Standards (OAR 162-040). The procedures will address certain components of financial reporting, operations, and compliance. 
  
  
• Filing fees: As determined by entity spending, increased fees will range from $40 to $500. 

​ ​Spending Over	​ ​Spending Not Over	​​ ​Annual Fee​
​​$0	​$50,00	​$40
​$50,000	​$150,000	​$80
​$150,000	​$250,000	​$150
​$250,000	​$500,000	​$250
​$500,000	​$1,000,000	​$300
​$1,000,000	​$5,000,000	​$350
​$5,000,000	​$10,000,000	​$400
​$10,000,000	​$50,000,000	​$450
​$50,000,000	​-	​$500

​​​​ ​

• Definitions: The definition of expenditures is removed from statute and will be developed in Oregon Administrative Rulemaking. The new definition will be used consistently in determining the reporting threshold and annual filing fee. The definition of cost audits for counties that perform road work will be developed in Oregon Administrative Rulemaking.
  
  
• ​Withholdings: The withholdings provision for cities and counties that don’t file on time is removed. 

Oregon Administrative Rulemaking 

The Oregon Administrative Rules and Minimum Standards for Audits and Reviews are being revised to reflect changes in law. Specifically, rules are being revised to (1) include a definition of expenditures that will be consistently used to determine the filing threshold and fee, and (2) replace review report guidance with AUP guidance. Rules are being developed in cooperation with the municipalities, CPAs, and membership organizations. Upcoming notices of permanent rulemaking will include information on public comment period(s) and/or public hearing(s). Sign up for noti​ces here​.