Chief Administrator 2022 Audit Status Report

Cleanups of Homeless Camps: Improved communications and data needed

Report published March 31, 2019| Follow-up report | Contact Minh Dan Vuong

The City’s Homelessness and Urban Camping Impact Reduction Program is responsible for coordinating clean up and abatement of areas where people live in tents and makeshift shelters on City property. It takes complaints, assesses campsites, removes trash, and sometimes displaces camp residents. Our 2019 audit found that the City’s program needed to improve public information, data analysis, and some internal policies. In the first year after the audit, the program improved how it takes care of the property of people displaced from camps and began to build a web application to better track its work. The Program implemented recommendations related to improving communication with people living outside, contractors, and people submitting complaints, storage procedures, data systems and analysis, and risk assessments for clean-up sites. In late 2022, the Program created an online dashboard to provide real time information on site clean-up status.

On this audit there were seven recommendations implemented.

Portland Building Contract: Costs reviewed were consistent with contract, although required cost classification and calculations for final payment need to start now

Report published October 3, 2019 | Follow-up report | Contact: Tenzin Gonta

Our 2019 report found the Portland Building renovation costs reviewed were consistent with the construction contract, although key tasks remained to prepare for final payment. The City Auditor hired construction audit experts to review the City’s compliance with the Portland Building construction contract. That audit focused on how the contractor was compensated for costs, submitted contract changes, and selected subcontractors. The City approved final payment of $159.7 million to the contractor in November 2021. The final value of the construction contract was $161 million, which reflects a $2.5 million increase from what we reported last year. The final payment included a City-approved $1.7 million performance incentive. The City has implemented all but one of the recommendations. The exception is delivery of a report documenting lessons learned throughout the project.

On this audit there were five recommendations implemented and one not implemented.

City credit card use slowed during pandemic but exposed underlying risks

Report published April 14, 2021 | Follow-up Report | Contact: Jenny Scott

We identified risks during the pandemic when employees began working from home and using City-issued credit cards outside of the usual safeguards. Procurement Services is on track to address most of the risks by updating its manual and initiating cardholder testing later this year. A Citywide policy on gift cards and volunteer compensation still needs to be developed.

On this audit there was one recommendation not implemented and one in process.

Not Implemented Recommendation Details

We recommended that the Chief Administrative Officer present budget-to-actual reports that reflect the complete Portland Building renovation costs that tied to the original $195 million budget for the main project as well as approved side projects that in 2019 were expected to collectively total $214 million, less financing costs. The City did not implement this recommendation during the project. Reports to Council and the Oversight Committee focused only on the main project. Other public reports presented this information in piecemeal. As a result, the total renovation costs were not clear or transparent to decision-makers or the public. As of November 2022, the new Chief Administrative Officer intends to provide Council with the final accounting of all projects related to the Portland Building reconstruction by February 2023. (Portland Building Reconstruction: City faced with important post-planning decisions to ensure project success)

We recommended the City identify lessons learned and distribute this information to bureaus that manage large-scale capital construction projects. The City created a project playbook with lessons learned but it did not address the areas of concern mentioned in the recommendation including the need for clear and specific contract language, better cost identification and linkages to project documents, preventive controls to ensure timely billing, monthly contractor billings in a sortable electronic format to allow for in-depth review, written procedures for bill approval for specific cost types, formal project management procedures to best control cost/scope/schedule, and an audit function early in the project to allow for detailed testing of cost allowability. (Portland Building Contract: Costs reviewed were consistent with contract, although required cost classification and calculations for final payment need to start now)

We recommended the Office of Management and Finance develop a Citywide policy to address the purchase, documentation, safeguarding, and appropriate use of gift cards, including guidance specific to rewarding volunteers.  The Office of Management and Finance had not dedicated the resources to develop a policy about gift cards. A Procurement Services manager agreed a policy is necessary to address inconsistency and improve understanding of sound financial practices across the City. In the absence of a Citywide policy, the Bureau of Financial Services has prohibited bureaus from purchasing gift cards without the approval of the Accounting Division. It has directed bureaus to work with the City Treasurer to buy them. The manager acknowledged this practice is allowing the continued inconsistent use of gift-cards. (City credit card use slowed during pandemic but exposed underlying risks)

We recommended grant reporting to Council as required by the original Portland Building Resolution and informing applicants of City's grantmaking status. Council's direction to disburse these funds in a timely manner during the Portland Building project was not met. Planned grants to support disadvantaged workers and businesses were not disbursed prior to construction completion. However, after our audit report, City Council adopted a January 2020 ordinance that supersedes the 2016 resolution about the Portland Building grants and transfers responsibilities to Prosper Portland for grant administration. Prosper Portland and a nonprofit partner made the first awards to grant recipients in July 2020. The Chief Administrative Officer reported to City Council in August 2019 and June 2020 with updates about grant administration preparations. While the timeliness requirement was not met, our recommendation - based on Council's 2016 resolution - to disburse and report on grants is now implemented. Applicants that applied for grants in August 2018 were notified in July 2019 that the City had cancelled those planned awards. (Portland Building Reconstruction: City faced with important post-planning decisions to ensure project success)

We recommended removing ratepayer funds from the Portland Building project community benefits budget if future grants are not reasonably related to the provision of water and sewer services. The project team reports it removed about $364,000 in ratepayer funds from the community benefits budget. To make up the difference, tenant bureaus that use other City funding will increase their contributions to keep the budget at $1 million. The increase impacts bureaus funded by General and Transportation Funds most significantly. (Portland Building Reconstruction: City faced with important post-planning decisions to ensure project success)

We recommended that the Chief Administrative Officer complete the remaining State and local historic preservation requirements for the Portland Building. The City and the State Historic Preservation Office signed a mitigation agreement in March 2021 that is in effect through June 2025. As part of that agreement, the City completed mitigation tasks including an exterior interpretive display, interior history wall, a monograph, and a web-based panel discussion. (Portland Building Reconstruction: City faced with important post-planning decisions to ensure project success)

We recommended the Chief Administrative Officer report on the status of accessibility barriers at the Portland Building. The project team has continued to consult with City staff with expertise with the Americans with Disabilities Act. The project team said that that it has an approach to address reasonable accommodations for the public as well as City employees. The City plans to finish this work now that the building is open to the public and occupied by employees. (Portland Building Reconstruction: City faced with important post-planning decisions to ensure project success)

We recommended improving communication to people experiencing homelessness about when crews will most likely clear the camp and improving the durability of the notices. In addition to posting notices, crews go to cleanup locations one day ahead to tell people of the upcoming cleanup. Crews also give people at least one hour to pack their belongings. (Cleanups of Homeless Camps: Improved communications and data needed)

We recommended ensuring that contractors have a common understanding of what the City considers personal property. Crews changed their processes. Crews pack property in clear plastic bags and warehouse staff photograph and inventory property. Crews receive on-going training. The program website describes what property will be stored and what will be discarded. (Cleanups of Homeless Camps: Improved communications and data needed)

We recommended ensuring that contractors improve storage policies and procedures, including extra safeguards for sensitive property. The program uses a larger warehouse and has eased access for people picking up their property. Sensitive property, such as identification cards, are now stored indefinitely in a secure room. (Cleanups of Homeless Camps: Improved communications and data needed)

We recommended clarifying the assessment risk factors and scoring, identifying what risk factors require photographic documentation, and establishing a common understanding of the criteria among the crews who carry out the assessments. The program said it improved the consistency of assessments and put quality controls in place. Photos are required of all materials and debris at campsites. (Cleanups of Homeless Camps: Improved communications and data needed)

We recommended that the program use data to analyze and improve the effectiveness of cleanups. The program is now using system data to adapt to changing conditions caused by the pandemic. Improved data allows the program to be more responsive to requests for information from policy makers. (Cleanups of Homeless Camps: Improved communications and data needed)

We recommended the program establish data systems to improve data quality and reduce manual processes. In 2022, the program began using a new system which automates many processes. (Cleanups of Homeless Camps: Improved communications and data needed)

We recommended that the program give status updates to people making complaints. The program resumed developing a web application in spring 2022 after an interruption due to the COVID-19 pandemic. In late 2022, the program published a public dashboard for community members to see real-time status updates. (Cleanups of Homeless Camps: Improved communications and data needed)

We recommended that the City classify costs into categories that determined which documentation the City could review. The classification was a missing piece of information needed by the City to assess contract compliance, evaluate reasonableness of costs, and help calculate final payment to its contractor. The City completed the cost classification that aligned with the contract amount as of December 2020. The completed classification confirmed estimates in the 2019 audit report that the City had the right to audit detailed invoices and actual costs for about half of the contract amount. The remainder of the costs were not eligible to be audited because, for example, the price was fixed for an agreed upon scope of work. (Portland Building Contract: Costs reviewed were consistent with contract, although required cost classification and calculations for final payment need to start now)

We recommended the City use a construction auditor to assist with cost reconciliations and help identify any questionable costs or potential cost savings. The City used an owner’s representative to help manage the Portland Building renovation. The owner’s representative contract included a provision for audit services and an audit subconsultant started working for the City’s owner team in January 2020. (Portland Building Contract: Costs reviewed were consistent with contract, although required cost classification and calculations for final payment need to start now)

We recommended that the City develop a plan for the work leading up to the calculation of final payment to the contractor. This is because cost reconciliations for large construction projects can be time consuming. For example, it is critical for the City to compare estimates billed to actual costs paid by the contractor. The City developed a two-part audit plan and identified the parties involved, role, responsibilities, and timeframes for completion. (Portland Building Contract: Costs reviewed were consistent with contract, although required cost classification and calculations for final payment need to start now)

We recommended the City reconcile costs in phases during the project rather than wait until construction closeout. The construction auditor reviewed billed costs through August 2020 when the project was about 97 percent complete. The City has since addressed the items identified by the construction audits, published in July and December 2020. For example, the City pursued credits for instances when it was overcharged. (Portland Building Contract: Costs reviewed were consistent with contract, although required cost classification and calculations for final payment need to start now)

We recommended that the City scrutinize contractor rates for personnel costs other than salary or wages, such as health benefits and unemployment taxes. Personnel costs is one of the largest areas for potential cost savings during construction audits. During last year’s audit, the construction auditor hired by the City found the contractor accurately calculated rates for their personnel costs and did not recommend more work. The construction auditor did recommend more work after their initial examination of subcontractor personnel costs. The project team has since addressed those items the City decided to pursue. (Portland Building Contract: Costs reviewed were consistent with contract, although required cost classification and calculations for final payment need to start now)