Klamath County requires triennial audit of economic development partner 'Casita', agrees to cover audit costs

After an extended discussion about transparency, audit scope and non-disclosure agreements, the Klamath County Board of Commissioners on July 8 voted to require the county's economic development partner, identified in the meeting as "Casita," to submit to a full financial audit no later than 180 days after the close of fiscal year 2026 (FY26). The board also voted that Klamath County will pay for the audit and reimburse any reasonable staff costs associated with the audit.

Commissioners debated what type of review or audit would meet the county's needs. Participants discussed financial-statement audits, reviews and single-audit requirements tied to federal funding. County officials and the organization's representatives raised concerns about the lack of a clear scope in the contract, potential findings that often accompany audits, the burden on a small staff, and possible conflicts with nondisclosure agreements (NDAs) Casita has with private partners.

During the discussion, a commissioner noted the county has provided “nearly $5,000,000” to the organization over several years using a mixture of general funds, tourism dollars, ARPA grants and economic development funds; a representative for the organization described the entity as a small staff of three with volunteers and emphasized some funding and activities are private. Auditors and finance staff advised the board on differences among compilations, reviews and full audits; one auditor said comparable local-government audits can cost in the mid-single‑thousand-dollar range, while a full audit or an audit after a long interval can be more expensive.

Commissioners directed staff to draft contract language requiring the audit, to seek input from county auditors about how an audit would handle NDAs, and to work toward parity in audit requirements across similar county contracts such as Discover Klamath. The board’s motion requiring a full audit within 180 days after the close of FY26 passed, and a separate motion that Klamath County pay for reasonable staff costs associated with the audit also passed. Both motions were recorded as passing by voice vote at the meeting.

The record shows the board discussed using an initial financial review or compilation as a preliminary step, and asked the county’s auditors and outside firms to advise on the appropriate scope and any implications for confidential business information. The board also discussed seeking consistent audit requirements across similar contracts going forward.