Revenue and Financial Services Bureau 2021 Audit Status Report

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We are tracking five audit reports and 30 recommendations at the Bureau of Revenue and Financial Services.
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Elected-in-charge: Mayor Ted Wheeler
Bureau or Office Director: Michelle Kirby


We are tracking five reports and 30 recommendations

The audits assessed risk management, short-term rental regulation, Enhanced Service Districts, contracting equity programs, and use of purchase cards. Revenue and Financial Services had five implemented recommendations, 15 in process recommendations, three not implemented recommendation, and seven pending recommendations that we have not yet followed-up on because they were less than a year old.

Revenue had five recommendations implemented, 15 in process, three recommendations not implemented, and seven recommendations pending a follow-up by Audit Services.

Highlight from Last Year

The Bureau began enforcing short-term rental regulations. It now uses data from Airbnb, the Short-Term Rental Registry, and other sources to assess compliance with City Code. If listings appear out of compliance, the Bureau advises agents to remove the listing and can impose penalties.

To Do

We recommended that Procurement Services take steps to improve its contracting equity programs, but progress was slow. An equity grants program still had not confirmed its funding sources or reported on the program’s effects. Another program still did not follow City rules and had not worked to eliminate barriers to working with diverse contractors.


Risk Management: City loss prevention needs a proactive approach

Report published June 22, 2017 | Follow-up report | Contact Elizabeth Pape

Our 2017 audit of Risk Management found that the Division did not have a proactive approach to helping City bureaus reduce injuries and loss and did not follow City Code requirements for information sharing and annual reporting. In addition, Risk Management had an inconsistent approach to managing liability claims against the City. Progress to strengthen the City’s safety and loss prevention programs or improve liability claims management has been slow. At year one all action on recommendations was stalled and the Risk Manager had retired. Under a new Risk Manager, the Division implemented a key data-sharing recommendation and updated the Loss Prevention Code, but significant work remains.

On this audit there were two recommendations implemented, three in process, and one not implemented.

A bar graph showing two recommendations have been implemented, three are in process, and one recommendation has not been implemented.

Short-Term Rental Regulation: Enforcement is lax and effect on housing is unknown

Report published August 8, 2018| Follow-up report | Contact KC Jones

Our 2018 audit of Portland’s short-term rental regulation found that only about 22 percent of units were registered, and the effect on housing availability and affordability was unknown. We made recommendations to improve data collection and enforcement and monitor the effect of short-term rentals on the housing market. In 2019 the City reported that it reached a data-sharing and registration agreement with a key rental agent and passed an ordinance requiring compliance from all agents. In 2020, the City made progress using publicly available rental data to enforce restrictions on hosts with multiple listings and hosts in commercial areas. However, the Bureau of Development Services was still developing software that will be used to analyze the data and enforce the rental registrations. The bureau did not prioritize enforcement during the pandemic. The Housing Bureau started reporting on short-term rental activity but still needs to work on measuring its impact on the housing market.

On this audit there was one recommendation implemented.

A bar graph showing one recommendation has been implemented.

Enhanced Service Districts: City provides little oversight of privately funded public services

Report published August 13, 2020 | Contact: Bob MacKay

The City of Portland’s hands-off approach to overseeing enhanced services districts prioritizes the interests of some over the costs to others. Portland has three Enhanced Services Districts, which are privately funded zones authorized by the City to pay for services that supplement those already provided by the City. Once authorized, the City provides little oversight of the services delivered or how they may affect people. We recommend the City review the districts’ purpose and the City’s responsibility for them and revisit the district agreements. If the districts continue to provide services in public spaces, the City should develop guidelines for district formation, governance, and management that ensures public input, transparency and accountability by the districts and their service providers.

This is a new audit with three recommendations pending follow-up.

Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship

Report published September 2, 2020| Follow-up report | Contact Elizabeth Pape

The Procurement Division of the Bureau of Revenue and Financial Services made little progress toward implementing the audit’s recommendations. Management said its progress was slowed while a new Chief Procurement Officer was hired and its intention to solicit community input on how to implement the audit recommendations. The issues identified in the audit are long standing and have persisted for years through numerous Bureau and Procurement leadership changes. Most recommendations were in progress but Procurement decided not to pursue two that were intended to shore up the integrity of the programs. Two recommendations have been implemented: one related to advertising upcoming projects and one to report progress toward equity goals.

On this audit there were two recommendations implemented, 12 in process, and two not implemented.

A bar graph showing two recommendations have been implemented, 12 are in process, and two recommendations have not been implemented.

City credit card use slowed during pandemic but exposed underlying risks

Report published April 14, 2021 | Contact: Jenny Scott

New risks for City-issued credit card misuse emerged when employees began working from home due to COVID-19. We asked: How did compliance with rules, management, and card spending change? We found some issues the City should shore up to prevent misuse.

This is a new audit with two recommendations pending follow-up.


Not Implemented Recommendation Details

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We recommended providing bureau access and training for the Risk Management Information System. Risk Management does not intend to provide access to bureaus. Instead it reports claims information monthly in the liability claims dashboard and provides special reports to bureaus on request. System access was a priority for bureau safety managers we interviewed in 2017; we encourage Risk Management to confirm with bureaus that this access is no longer needed before we close this recommendation. (Risk Management: City loss prevention needs a proactive approach)

We recommended that Procurement collect data on prices submitted for bid items to protect against collusion and bid-rigging. This risk is higher when equity programs limit the eligible pool of potential contractors. Instead of collecting data on prices, the Chief Procurement Officer said he will develop an accountability system and report issues to the Chief Financial Officer. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement appoint a procurement inspector to monitor, investigate, report on, and make recommendations to the authorities about (a) the sufficiency of procurement regulations, (b) project-specific or citywide compliance with procurement regulations, (c) bid collusion, (d) questionable certifications, or (e) other procurement matters as appropriate, based on self-initiation or complaint. We made this recommendation because we observed potential issues, such as problematic certifications, that staff said they could not investigate. Instead of dedicating staff to monitor the integrity of equity programs, the Chief Procurement Officer said he will develop an accountability system and report issues to the Chief Financial Officer. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

In Process Recommendation Details

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We recommended either re-introducing biennial service agreements with the eight bureaus with the most claims or more clearly defining the services Risk Management will provide and how they will be provided. The Risk Manager said they do not plan to reintroduce service agreements, but that the City Code and policy revisions they are currently developing should help better define and communicate Risk’s role. (Risk Management: City loss prevention needs a proactive approach)

We recommended updating the general and fleet liability claims policies and procedures manual. Risk Management made minimal progress improving and documenting the claims management process. Staff is still in the process of drafting a proposal. (Risk Management: City loss prevention needs a proactive approach)

We recommended requesting the next City Charter Review Commission consider raising the dollar limit for Council approval of claims. In the meantime, document and get Council approval for the current split-payment approach. The Risk Manager said they are committed to developing proposed limits for the next Commission review in 2021. (Risk Management: City loss prevention needs a proactive approach)

We recommended that Procurement evaluate the results of grants associated with construction on growth in the construction market. The office said that because the program has only been in place for one year, not enough time has passed to evaluate its effect on the construction market. It said that it will be assessing the grant program but did not provide an evaluation plan. Instead, it provided documentation that it required grantees to develop performance criteria for individual grants. Evaluation of individual grant performance does not replace management’s responsibility for overall program evaluation. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement set a goal for the use of certified prime contractors on construction projects. Procurement added this to a list of program changes to consider but is behind schedule in prioritizing options and making recommendations to Council. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement eliminate barriers by awarding all small contracts to certified firms without requiring participation in the Prime Contractor Development Program. Procurement added this to a list of program changes to consider but is behind schedule in prioritizing options and making recommendations to Council. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement eliminate technical assistance offerings, which we found to be disorganized, wasteful, and in conflict with Procurement’s role. Procurement said it was working with stakeholders and the Fair Contracting Forum to develop a strategy to respond to this recommendation and address it in a future workplan. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement create criteria to prevent project bundling, which can negatively affect minority- and women-owned firms if it is used to group projects to exceed the threshold that qualifies projects for the Prime Contractor Development Program. Procurement added this to a list of program changes to consider but is behind schedule in prioritizing options and making recommendations to Council. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement implement the oversight processes outlined in the agreement with Prosper Portland to administer the Community Opportunities and Enhancement Program.  Procurement said Prosper Portland is completing its assessment of data collected as a part of the oversight process. Prosper’s initial reports describe the businesses and workers that received technical assistance. The reports include details such as participant demographics, success stories, and challenges. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement confirm funding sources for the Community Opportunities and Enhancement Program. The City has asked the Multnomah County Circuit Court to confirm it can use ratepayer funds for this program and expects a decision from the court before the end of 2021 that will inform the Fiscal Year 2022-23 budget. In the meantime, Procurement said it will not spend ratepayer funds. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement follow rules for documenting exemptions to the Prime Contractor Development Program. Procurement began tracking exemptions and said it is following applicable rules. It did not follow the rule, however, that exemptions be requested by bureaus – not Procurement – and be signed by the director of the requesting bureau. Procurement said that it would revise its procedures to comply with the rule. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement centralize and formalize outreach to ensure fairness. The Bureau moved the role of the Supplier Diversity Officer back to Procurement from the Grants Office. It also created a new Inclusive Contracting Manager position that will be responsible for ensuring supplier diversity and inclusion. Procurement said that it would develop additional strategies to implement the recommendation. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement formalize tracking of communications between staff and vendors. Procurement said that the new Inclusive Contracting Manager would develop an outreach strategy to ensure fairness, increase opportunities, and remove barriers. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement use post-project reports to identify trends and lessons learned. Procurement continued to conduct post-project assessments as part of the contract close-out process. Staff considered the evaluation information during the subsequent contractor pre-qualification process. Procurement said that it would develop a workplan to examine the need for a new policy to use the information to identify overall trends and lessons learned. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

Implemented Recommendation Details

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We recommended providing routine trend information on losses to bureaus, both bureau-specific and Citywide. Risk Management created a liability claims dashboard that is updated monthly. Bureau staff can sort data by bureau, by claim type, and by the cause of the injury or accident. (Risk Management: City loss prevention needs a proactive approach)

We recommended either following the City Code and Loss Prevention Policy or developing and follow an alternative. Risk Management proposed and City Council approved changes to the City’s Loss Control and Prevention Code Chapter 3.54 in October 2020. (Risk Management: City loss prevention needs a proactive approach)

We recommended that the Revenue Division use short-term rental host data to enforce booking agents’ compliance with City Code. Revenue uses the Airbnb and Short-Term Rental Registry and other data to determine whether booking agents comply with City Code. When listings appear that are not on the City’s Short-Term Rental Registry but are included in the booking agents’ data, Revenue advises the agents to remove the listing. Penalties may be imposed if the listing is not removed. (Short-Term Rental Regulation: Enforcement is lax and effect on housing is unknown)

We recommended that Procurement post upcoming projects on its website. Procurement has since posted quarterly construction project forecasts for Transportation, Environmental Services, Parks, and Water on the Fair Contracting Forum section of its website. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

We recommended that Procurement produce reports on the City’s progress toward contracting equity goals. Procurement’s Fiscal Year 2019-2020 annual report and contracting data dashboards fulfilled this recommendation. The annual report includes narratives and data that explain outcomes on equity goals. The dashboards allow users to explore disaggregated contracting equity data. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)

Pending Recommendation Details

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We recommended that Revenue review the status of districts, their purposes, and City's responsibility for them. If the review determines that districts continue to provide services in public spaces, propose City Code for Council approval governing: a. District formation; b. Scope of allowed services in public spaces; c. Inclusive district governance; d. Accountable and transparent reporting. (Enhanced Service Districts: City provides little oversight of privately funded public services)

We recommended that Revenue revise agreements between the City and each district to align them with the City Code related to enhanced service districts. (Enhanced Service Districts: City provides little oversight of privately funded public services)

We recommended that Revenue develop a process for effective City oversight of district agreements. It should include a project manager or a liaison over the districts and reporting of district activities to Council and the public, including reporting of security and law enforcement activities. (Enhanced Service Districts: City provides little oversight of privately funded public services)

We recommended that Procurement Services update the manual to ensure that the rules about payment cards are are accurate and enforceable. (City credit card use slowed during pandemic but exposed underlying risks)

We recommended that Procurement Services implement certification and recertification testing to ensure cardholders can demonstrate knowledge of rules. (City credit card use slowed during pandemic but exposed underlying risks)

We recommended that Procurement Services ensure that the Bureau of Technology Services has direct access to Citywide procurement card transaction data so it can use the data to identify violations of technology purchasing rules and opportunities to maximize savings. (City credit card use slowed during pandemic but exposed underlying risks)

We recommended that Procurement Services update its manuals to incorporate the responsible parties. (City credit card use slowed during pandemic but exposed underlying risks)


Data Notes

At the end of every audit report, we issue a series of recommendations intended to make programs work even better. This report includes the status of Bureau recommendations since 2018, which was the beginning of our new follow-up process. We prepared it with a few audiences in mind:

  • City Council can use it to identify bureaus that may need additional resources or support in order to implement recommendations.
  • Bureau directors can use it to assess bureau performance and to determine if any changes in policy or procedure are necessary.
  • Bureau management and staff can use it to track recommendation status across audits to develop work plans and priorities.
  • General public can use it to monitor the status of recommendations related to topics of interest and to compare performance across bureaus.

This report includes recommendation status as of December 31, 2021.


Translated reports
Reports from this year and most of 2021 are available in four languages: Spanish, Vietnamese, Chinese, and Russian. We are translating new reports as they’re released, but older reports may not be available in a language other than English. If you would like to request a translated version of a report, please contact Leslie Chaires.


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