Board accepts annual financial report after audit finds internal control deficiencies

The Portland Public Schools Board of Education voted to accept the district’s annual comprehensive financial report (ACFR) and single audit and to approve the accompanying corrective action plan (Resolution 7,248). The audit, conducted by the district’s external auditor, identified six significant internal control findings and three areas of noncompliance with Oregon Revised Statutes; the audit committee attributed the findings primarily to staff turnover in the finance team and confirmed that staffing has since stabilized.

Director Sullivan, presenting the audit committee’s recommendation, said the committee reviewed the findings and corrective action plan in detail and recommended the board approve the plan, including a time frame for implementation. The corrective action plan addressing all six findings and the three compliance issues is posted with the ACFR materials. One of the six findings rose to the level requiring a required notification letter to the Secretary of State; that disclosure was included as required in the meeting packet.

CFO Michelle Morrison and audit committee members said no findings represented loss or misuse of funds; they described them as procedural and internal control weaknesses tied to transitions in finance staff. The audit committee will monitor implementation of the corrective action plan; staff reported corrective steps are already underway and implementation is effective immediately according to the memo referenced by the audit committee.

The board voted to accept the ACFR and corrective action plan by a 7–0 recorded vote (Student Representative Retorto unofficially recorded as yes). The board also asked staff to ensure timely follow‑up and to provide the committee documented progress on remediation.