162-040-0005 General Requirements (1) All municipal corporations, as defined in ORS 297.405, are required to have their accounts and fiscal affairs audited annually, unless they are exempt from audit under ORS 297.435. The following administrative rules apply to agreed-upon procedures (AUP) engagements and reports prepared under 297.435(3). AUP reports must be prepared in accordance with Statements on Standards for Attestation Engagements (SSAE), which contain professional requirements, together with related guidance, in the form of explanatory material. Accountants performing AUP engagements have a responsibility to consider the entire text of SSAE in carrying out their work on an engagement and in understanding and applying the professional requirements of the relevant Standards. If applicable, accountants performing compilation engagements have a responsibility to consider the entire text of Statements on Standards for Accounting and Review Services (SSARS) in carrying out their work. (2) The objective of an AUP differs significantly from the objective of an audit of financial statements in accordance with generally accepted auditing standards. An AUP does not contemplate obtaining an understanding of the municipal corporation’s internal control; assessing fraud risk; testing and examining accounting records to obtain sufficient appropriate evidence to form an opinion or conclusions through inspection, observation, confirmation, or the examination of source documents; or other procedures ordinarily performed during an audit. The procedures determined to be minimum standards for AUP engagements are designed to report on a municipal corporation’s financial information and presentation, operations and controls, and compliance with certain requirements. The report is limited to the results of specific procedures performed and does not provide an opinion or conclusions. (3) The accountant who performs an AUP for a municipal corporation in compliance with these rules must: (a) Be licensed by the Oregon Board of Accountancy to conduct municipal audits; (b) Personally perform the AUP in accordance with these rules to an extent satisfactory to the Secretary of State; and (c) Prepare a report of procedures and results in accordance with these rules. The report must be signed by the accountant. The report is to be issued to the municipal corporation within six months after the close of the fiscal year. (d) Make AUP engagement documentation available for review upon request by the Secretary of State. (4) Officials of the municipal corporation must account for all resources for which they are responsible. An appropriate accounting by officials of the municipal corporation will include financial statements, notes to the financial statements, and the supplementary information required by these rules. (5) Officials of the municipal corporation are responsible for the financial information and the existence of appropriate internal controls over financial information and compliance. (6) The municipal corporation must ensure financial statements are prepared that fairly present its financial position and results of operations in accordance with legal provisions, and in accordance with generally accepted accounting principles or other financial reporting framework permitted by law. The accounting principles contemplated are those contained in pronouncements of authoritative bodies including, but not necessarily limited to, the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, and the Governmental Accounting Standards Board. The cash basis and modified cash basis of accounting are special purpose frameworks permitted under Municipal Audit Law. (7) The complete annual filing of the municipal corporation shall include financial statements with appropriate notes and management's representations of compliance, filing fee, summary information, and the accountant's AUP report containing the procedures performed, results thereof, and the elements prescribed by the Statements on Standards for Attestation Engagements issued by the American Institute of Certified Public Accountants. (8) The municipal corporation must file its financial report with the Secretary of State. The financial report must include the financial statements and management’s representations of compliance. The report and supporting documentation are subject to review by the Secretary of State for compliance with these rules. (9) The accountant shall submit summary information including total revenues/receipts and expenditures/disbursements of the municipal corporation within 30 days after delivering the AUP report to the municipality. The summary information shall encompass the period covered by the financial and AUP report and shall be prepared and submitted in a manner and on forms prescribed by the Secretary of State. Statutory/Other Authority: ORS 297.465 Statutes/Other Implemented: ORS 297.465 History: AUDIT 1-2023, amend filed 10/31/2023, effective 01/01/2024 AUDIT 3-2015, f. & cert. ef. 8-19-15 AUDIT 1-2012, f. 2-9-12, cert. ef. 4-1-12 AUDIT 2-2007, f. 6-7-07, cert. ef. 6-30-07 DOA 1-1996, f. 4-10-96, cert. ef. 6-1-96 DOA 2-1991, f. 3-8-91, cert. ef. 7-1-91, Renumbered from 165-040-0005 SD 6-1981, f. & ef. 9-1-81