Deputy Secretary of State Michael Kaplan and Steve Bergman, the audits division director, briefed the House Rules Committee on Feb. 26 on the division’s mission, staffing, planned FY26 work and a new risk-model effort intended to steer future audits.

Kaplan said the division is operating under “three pillars” set by Secretary Reed: “integrity, accountability, and competence.” He described audits as a nonpartisan function “laser focused on identifying risks, finding solutions, and making actionable recommendations to state government, to the legislature, to the governor, to state agencies.”

Steve Bergman described the audits division’s twin mission: “to protect the public interest and the next is to improve Oregon government.” He told the committee the office performs financial statement and compliance audits (including the state’s annual financial statement audit, known as the annual comprehensive financial report), federal single-audit compliance work, performance audits, IT audits and municipal audit oversight for more than 1,800 municipalities.

The division reported a budget “just under $29,000,000” and roughly 702 employees. Bergman emphasized the financial-audit work supports the state’s bond rating and federal funding eligibility, saying compliance audits help preserve the roughly $20,000,000,000 in federal funds the state receives each year.

Several FY26 performance audits were listed as planned, including adult protective services at the Department of Human Services, state cloud-security practices, an assessment of the Medicaid program for cost and fraud risks, and a review of the Workday payroll system. The division also highlighted administration of the government waste hotline and said it will publish an annual report about that work.

Kaplan and Bergman said they will develop a new, transparent, data-driven risk model during FY26 to inform the FY27 audit plan, with the goal of submitting that plan to the Legislature in February 2026. Bergman said the model aims to identify “leading indicators of risk” so the division can act earlier rather than reacting after problems reach the news cycle.

On responsiveness, the division told the committee audits are planned through a multi-month process and that scope and objectives are set during an audit’s planning phase. Representative Drazen asked whether external reports or sudden events (for example, news-driven investigations at state hospitals or corrections facilities) could “shift” the division’s work in real time. Bergman and Kaplan said that while planning is where scope is finalized and adjustments can be made, audits in fieldwork and reporting are harder to pivot because of the resources and planning required. They said a risk model with better leading indicators is intended to address that gap.

Committee members also asked how the division engages with the Legislature. Kaplan said the primary mechanism of engagement is the Joint Legislative Audit Committee (JLAC) and that the division is seeking to improve how audit findings and follow-up are shared with policy committees and Ways and Means to ensure recommendations are implemented.

The presentation noted the audits division undergoes external peer review (the office cited having passed peer review with “exceptional results” in recent history) and affirmed the division will conform with applicable professional auditing standards. Bergman and Kaplan highlighted recent leadership changes in the Reed administration, including Bergman’s appointment, and said the division is focused on culture change, refining risk methodology and maximizing the return-on-investment of audit work.

The briefing closed with an offer to take committee questions and an acknowledgement from the division that there is “a lot of work ahead.”