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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 2025Source: City of Portland Council audit materials / Baker Tilly audit results slides for FY ended June 30 2025DailyTidings.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.
The government is always asking of more money, more money but does not know how to account for the money it actually has. Material weakness is a serious situation and this is not the 1st time it has happened. Now it will cost an additional $250K to fix this. Not OK!! Very disappointed in our city leaders.