SALEM — At least 20 cities and districts in Lincoln and Tillamook County are part of a growing statewide financial scandal involving missing audits and other important financial records, according to a new report by the Oregon Secretary of State.

Annual audits provide a system of checks and balances to safeguard taxpayer money and ensure it is spent according to legal mandates. But the latest roster of delinquent filers included 238 government entities — a record number — that failed to submit documents required by state law ORS 297.425. Some cities, such as Depoe Bay and Waldport, have not filed audits for several years while the Salmon River Park Special Road District northeast of Lincoln City is so far in arrears state officials want it dissolved.

“These financial reports are a critical way we hold local governments accountable to the public,” said Secretary of State Tobias Read. “When municipalities fail to submit these reports on time, it hurts public trust in their ability to be effective stewards of public funds.”

Among those government entities in the December 2025 delinquency report are:

• City of Depoe Bay — missing 2022, 2023, 2024 audits
• City of Waldport — missing 2022, 2023, 2024 audits
• City of Garibaldi — missing 2023, 2024 audits
• City of Florence — missing 2024 audit
• Community Services Consortium (serves Lincoln Co.) — missing 2024 audit
• NW Oregon Economic Alliance (Lincoln Co. a member) — missing 2023, 2024 In Lieu
• Lincoln Co. Consortium for Solid Waste Management — missing 2024 In Lieu
• Tillamook Drainage Dist. — missing 2023, 2024 In Lieu
• Tillamook Co. Transportation Dist. — missing 2024 audit
• Central Oregon Coast Fire & Rescue — missing 2024 In Lieu
• East Lincoln Co. Fire & Rescue — missing 2023 Report, 2024 audit
• Pacific City Joint Water-Sanitary Authority — missing 2024 audit
• Depoe Bay Urban Renewal Agency — missing 2023 review, 2024 audit
• Florence Urban Renewal Agency — missing 2024 audit
• Garibaldi Urban Renewal Agency — missing 2022, 2023, 2024 In Lieu
• Waldport Urban Renewal Agency — missing 2024 In Lieu
• Panther Creek Water Dist. — missing 2024 In Lieu
• Devils Lake Water Improvement Dist. — missing 2023 review, 2024 audit
• The Salmon River Park Special Road District — missing 2022, 2023, 2024 In Lieu, slated for dissolution at request of state to Lincoln County

*Entities with expenditures of $250,000 or less may submit a mandatory summary of financial transactions ‘in lieu’ of an audit.

The state legislature in 2023 passed HB 2110, which removed provisions for withholding funds from delinquent cities and counties. The bill passed 59-1 in the House and 22-5 in the Senate, leaving the state toothless to enforce the law.

“Our role is to essentially gather up reports and make sure cities are in compliance,” acknowledged Tess Seger of the secretary of state’s office. “We don’t have a ton of options for enforcement. At the end of the day the responsibility is with these local entities.”

There are still consequences for municipalities that are delinquent, however. Entities that don’t file a report may jeopardize their ability to service loans, obtain new debt, comply with grant requirements, or obtain new grants. School districts may have state school funds withheld by the Oregon Department of Education. Also, special districts may be subject to dissolution if they don’t file reports for three consecutive years, such as the Salmon River Park road district.

State Rep. David Gomberg, who represents Lincoln County’s House Dist. 10, said delinquencies have been growing since 2017, confirming the penalty structure wasn’t working.

“I’m committed to working with Secretary Read and my colleagues in Salem to figure out a path forward,” Gomberg told the Beacon. “This is clearly a problem that needs to be addressed, whether that be incentives to bolster auditor availability for these small governments or streamlining the systems local governments use to interface with the Secretary’s office. Either way, we need a fix, and I’ll be eagerly awaiting the March municipal audits report from Secretary Read’s office to help guide next steps.”

One city that has been removed from the list is Siletz, where an award-winning city employee who took over the town’s books in 2023 brought a three-year backlog plus the current year’s audit up-to-date. City Recorder Barbara Chestler, later awarded for her community service, described how the city solved its audit puzzle.

“When I got here there hadn’t been an audit since 2019,” she recalled. “We rolled up our sleeves, budgeted the money — because it’s expensive to catch up — and brought an auditor on board. We completed four years of audits in two years, got new finance software and now we have a CPA look at our books every three months.”

Chestler said audits reveal the health of a city and also help to expose malfeasance, such as misspending or even embezzlement.

“It’s a transparency tool we use to see if you’re doing your job right,” she said. “It lets the citizens and the city council know where you stand, and if you’re doing what you say you’re doing with the money.”