Budget and Finance and 1 more...
ACCOUNTING AND FINANCIAL REPORTING QUALITY: Number of Audit Deficiencies (Material Weaknesses) Reported in the Annual Comprehensive Financial Report (ACFR)
Current Value
1
Definition
Reviewed all the Comprehensive Annual Financial Reports from this City website: Annual Financial Reporting | Portland.gov
***There is data in BFM, but no one can remember what exactly that data was measuring because there are different levels of deficiencies. So we are not using it.
Why Is This Important?
The City's Annual Comprehensive Financial Report (ACFR) is a detailed document that provides a comprehensive overview of the city's financial condition for a specific fiscal year. It includes financial statements, management's discussion and analysis, and statistical data.
An independent auditor reviews the City’s ACFR to ensure accuracy and thoroughness and reports any significant errors, if any are found. The most serious deficiency that the auditors can report in the ACFR is called a material weakness; which is a deficiency, or a combination of deficiencies, that represent a significant error.
What Do The Numbers Show?
The numbers show a material weakness was found for the last fiscal year (FY 2023-24). This is the first time one has been found in the last seven years. The City has put new financial controls in place and hired additional accounting staff to address this finding, this gives the City the opportunity to get back to zero material weaknesses in future years.
A material weakness comment highlights areas where the organization may not be complying with financial reporting standards, or where there is a risk that errors or fraud could occur and go undetected (this does not mean that fraud has occurred, just that there is an increase risk that if it did happen it wouldn’t be detected as quickly as it should be if all accounting standards were being followed).
A material weakness comment is meant to help an organization improve their financial processes and controls, ensuring greater accuracy and reliability in financial reporting. The number of deficiencies helps outside stakeholders assess the City's financial health and management of public funds, ideally there will be zero each fiscal year.
How Did We Arrive at These Numbers?
The numbers come from the annual analysis of the ACFRs that are conducted by an independent and local accounting firm, Moss Adams LLP. Their auditing team reviews the City’s ACFR each fiscal year and reports on what they find, looking for areas where reporting and accounting standards were not followed.
Where Can I Find More Information?
To review the full financial reports view the City’s Annual Financial Reporting Page.
For more information about the independent organization doing the review check out Moss Adams LLP.
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