STAFF REPORT
IN CONSIDERATION OF ORDINANCE NO. 04-1035, FOR THE PURPOSE OF AMENDING
METRO CODE CHAPTER 2.04 TO REQUIRE RETENTION OF CONTRACT RECORDS BY
METRO CONTRACTORS AND TO ASSURE THE ABILITY OF METRO TO AUDIT
CONTRACT RECORDS
Date: January 28, 2004
Prepared by: Metro Auditor
Alexis Dow
BACKGROUND
Metro does not currently have the right to inspect and review contractor records. This ordinance would
require contractors to retain all fiscal records relating to such contracts in accordance with generally
accepted accounting principles fiscal records and make them available to Metro departments and the
Metro Auditor.
ANALYSIS/INFORMATION
1.
Known Opposition
None
2. Legal Antecedents
City of Portland Code section 5.33.410 - See Attachment A
3.
Anticipated Effects
Adoption of Ordinance 04-1035 will ensure:
•
the ability to assure that Metro’s public contracts, personal services contracts and public
improvement contracts are performed in accordance with the terms upon which the parties to
those contracts have agreed
•
the ability to inspect, audit and review all of the records related to such contracts.
4.
Budget Impacts
None
RECOMMENDED ACTION
The Metro Auditor recommends the adoption of Odinance 04-1035.
Ordinance No. 04-1035
Attachment 1
Portland City Code
5.33.410 Records Maintenance; Right to Audit Records.
(Amended by Ordinance No. 176675, effective July 3, 2002.)
A.
Contractors and subcontractors shall maintain all fiscal records relating to a contract executed with
the City in accordance with generally accepted accounting principles. In addition, contractors and
subcontractors shall maintain any other records necessary to clearly document:
1.
Their performance. Performance includes, but is not limited to, compliance with plans and
specifications, compliance with fair contracting and employment programs, compliance with
Oregon law on payment of wages and accelerated payment provisions, and any and all
requirements imposed on the contractor or subcontractor under the contract or subcontract;
2.
Any claims arising from or relating to their performance under a public contract;
3.
Any cost and pricing data; and,
4.
Payment to suppliers and subcontractors.
B.
Such records shall be maintained for a period of six years from the date of final completion of the
contract or until the conclusion of any audit, controversy or litigation arising out of or related to a
contract, whichever is longer, unless a shorter period of time is authorized in writing by the City.
C.
Contractors and subcontractors shall make all their records available to the City within the
boundaries of the City of Portland, Oregon, at reasonable times and places regardless of whether litigation
has been filed on any claims. If the records are not made available within the boundaries of the City, the
contractor or subcontractor shall pay all costs for City employees, and any necessary consultants hired by
the City, including travel, per diem costs, salary, and any other expenses incurred by City in sending its
employees or consultants to examine, audit, inspect, and copy those records. If the contractor elects to
have such records outside these boundaries, the costs paid by the contractor to the City for inspection,
auditing, examining and copying those records are not recoverable costs in any legal proceeding.
D.
The City and its authorized representatives shall be entitled to inspect, examine, copy and audit the
books and records of any contractor or subcontractor upon request by the City for any reason, including
any documents that may be placed in escrow according to any contract requirements. The records that
may be inspected and copied include financial documents of the contractor, including tax returns and
financial statements. The City will keep such documents confidential to the extent permitted by Oregon
law, subject to Paragraph E below.
E.
Contractors and subcontractors agree to disclose the records requested by the City and agree to their
admission as evidence in any proceeding between the parties, including, but not limited to a court
proceeding, arbitration, mediation or other alternative dispute resolution process.
F.
In the event that the records disclose that the City is owed money or establishes that any portion of
any claim made against the City is not warranted, the contractor or subcontractor shall pay all costs
incurred by the City in conducting the audit and inspection. Such costs may be withheld from any sum
due or that becomes due to the contractor by the City.
G.
Failure of the contractor or subcontractor to keep or disclose records as required by PCC 5.33.410 or
a solicitation document may result in disqualification as a bidder or proposer for future City contracts as
provided in PCC 5.33.330 B.4, or may result in a finding that the contractor or subcontractor is not a
responsible bidder or proposer as provided in PCC 5.33.300 B.4.
