Due to unclassified audit reports, the fate of the Lake Chinook Fire District may be in the hands of Jefferson County

CULVER, Ore. (KTVZ) — What would Central Oregon do if a fire district disbands? Although unlikely, the fate of the Chinook Lake Fire and Rescue District could be in question, due to an issue of not reporting required annual audits to the state.

Located above Billy Chinook Lake, the Chinook Lake Fire Protection and Rescue District protects a population of approximately 250 year-round residents. A popular year-round destination for hunting, fishing, camping and water sports, this conservation district has over 4,000 visitors each weekend during the summer. LCF&R provides fire, rescue and EMS services in a 105 square mile area.

To hold entities accountable for their finances, the State of Oregon requires all local governments to file annual audit reports. If an entity has a budget of less than $150,000, they do not need to hire a CPA or accounting firm to complete the report – they can submit the report themselves.

In 2015, the Lake Chinook Fire & Rescue Protection District’s budget increased and it exceeded the $150,000 cap for self-reporting, subsequently requiring it to prepare and file audits through a “certified municipal auditor”, a CPA with a special designation from Oregon. Board of Accountancy that allows them to perform audits and reviews for local governments, according to the Oregon Division of Audits.

If a district fails to do so, the state sends notification letters each year, and if the district fails to submit audit reports for three consecutive years, the state notifies the corresponding county.

Amy John, municipal audit manager for the state’s audit division, told NewsChannel 21 that the Lake Chinook Fire and Rescue District hasn’t submitted an audit since 2018. She says the district has received several late notices over the years.

As a result, the Jefferson County Board of Commissioners was notified of the fire district’s failure to submit audits. At Wednesday’s county commission meeting, Fire Chief Don Colfels updated the county on the status of the audits. He said the matter will be resolved in 45 days as the district has found a new municipal auditor to complete the reports.

Chief Colfels said that between 2015 and 2018, the fire district hired someone to do the audits. He said that unbeknownst to the district, they had lost their audit license. After that, the challenges created by the pandemic, staffing shortages and the difficulty in finding a municipal auditor who would work for a small district all contributed to the reports not being filed.

John said if the district spends more than $150,000 but not more than $500,000, it may be eligible to have the Certified City Auditor perform a review rather than an audit. It’s less detailed in scope and often less expensive, but involves an independent CPA and meets state law requirements, she said.

However, if the reports are not submitted, then it is up to the county to decide what happens. John said disbanding a district is rare because the law is designed as an incentive to help districts comply. John said his expectation, and likely that of the county, is that “the district provides an important service, and we are best served by helping them comply, rather than shutting them down.”

Carly Keenan is investigating the situation. His report is forthcoming on NewsChannel 21 at Five.

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