Elected-in-charge: Mayor Ted Wheeler
Bureau or Office Director: Michelle Kirby
We are tracking six reports and 32 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 11 implemented recommendations, 14 in process recommendations, five not implemented recommendations, and two pending recommendations that we have not yet followed-up on because they were less than a year old.
Highlight from Last Year
We recommended that Procurement centralize and formalize outreach to contractors, certified firms, and suppliers to ensure consistency and fairness. Procurement created a new position, the Inclusive Contracting Manager, to build relationships with vendors and identify sourcing opportunities for equitable contracting.
To Do
We recommended that Procurement evaluate the results of grant awards on growth in the construction market and whether the City’s costs to administer them were justified. Procurement collected anecdotal information about successful businesses from Prosper Portland’s progress reports but did not understand the effect of the grants on the overall construction market. Procurement said it planned to conduct a disparity study to measure baseline participation by certified contractors in the market.
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. The Division implemented all of our recommendations including a key data-sharing recommendation, an updated Loss Prevention Code, and a recommendation to better define the services it offers other City programs.
On this audit there were six recommendations 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.
Enhanced Service Districts: City provides little oversight of privately funded public services
Report published August 13, 2020 | Follow-up | Contact: Bob MacKay
This is our first follow-up on the recommendations from our 2020 audit Enhanced Services Districts: City provides little oversight of privately funded public services. In that report we assessed the City's role in creating the districts and monitoring their activities. We found its hands-off approach may contribute to disparate law enforcement outcomes within districts and limits community members' ability to influence activities and monitor the results. We found limited City oversight of services in the districts and no guidelines for their formation or governance. We recommended the Office of Management and Finance work with City Council to review the purpose and the City's responsibility for the districts and revisit the agreements. If the districts continue to provide services in public spaces, the City should develop guidelines for formation, governance, and management that ensures public input, transparency and accountability by the districts and their service providers. The Office of Management and Finance hired a coordinator to review governance and oversight. The coordinator expected to complete the review by September 2022 and make recommendations for changes to City Code and district agreements.
On this audit there was one recommendation in process and two not implemented.
Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship
Report published September 2, 2020| Follow-up report | Contact Elizabeth Pape
Contracting opportunities for private firms are one of Portland’s fundamental tools to achieve its goal of ending racial disparities in City government. Our 2020 audit found that Portland’s contracting initiatives reduced disparities, but also suffered from design flaws and mismanagement, and were vulnerable to gamesmanship. We made 16 recommendations to improve program design, oversight, transparency, and accountability. Procurement Services has begun implementing some recommendations but not others, notably two intended to shore up the integrity of the initiatives. It also continued using the Prime Contractor Development Program, which we found disorganized, wasteful, and beneficial to few contractors. Procurement is implementing ten recommendations, including developing and reporting on program goals and conducting a disparity study to gather baseline data on the number of construction firms owned by women and people of color in Portland. Procurement implemented recommendations to confirm that programs could use ratepayer funds, centralize communications with contractors, and post project forecasts online.
On this audit there were three recommendations implemented, 10 in process, and three not implemented.
City credit card use slowed during pandemic but exposed underlying risks
Report published April 14, 2021 | Follow-up | 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 implemented, and three in process.
Taxes, fines, and fees: Customers who owe caught in a maze of inconsistent and uncoordinated collection strategies
Report published February 2, 2022 | Contact Martha Prinz
The City’s decentralized way of collecting taxes, fines, and fees requires Portlanders to navigate different approaches that may cause harm, especially to people with limited English proficiency or means. We recommend improvements to this disjointed experience for City residents and businesses.
This is a new audit with two recommendations pending follow-up
Not Implemented Recommendation Details
We recommended the City revise district agreements between the City and each district to align them with revisions to Code. Implementation of this recommendations is dependent on the results of the review scheduled for completion in September. (Enhanced Service Districts: City provides little oversight of privately funded public services)
We recommended the City 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. Implementation of this recommendations is dependent on the results of the review scheduled for completion in September. (Enhanced Service Districts: City provides little oversight of privately funded public services)
We recommended that Procurement appoint a procurement inspector to monitor, investigate, report on, and make recommendations about: (a) the sufficiency of procurement regulations; (b) project-specific or citywide compliance with procurement regulations; (c) bid collusion; (d) questionable certifications; and (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 Procurement staff said it did not have the authority to investigate. Procurement said it instead works with the City Attorney’s Office and contracting bureaus to monitor and investigate non-compliant activity. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
We recommended that Procurement eliminate the Prime Contractor Development Program’s technical assistance offerings, which we found to be disorganized, wasteful, and in conflict with Procurement’s role. These were long-standing problems, some of which were addressed in a 2010 audit. Procurement continued to offer technical assistance by contracting the work out to trade organizations. That may have addressed the conflict involved with Procurement both enforcing contract compliance and providing technical assistance, but a Procurement project manager continued to oversee and support the participating firms. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
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 and monitoring for collusion, Procurement said it provides a list of prices to bureaus after project bids are submitted. This method does not allow for analysis to identify collusion across projects or bureaus, so the risk remains unaddressed. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
In Process Recommendation Details
We recommended the City review the status of districts, their purposes, and the City’s responsibility for them. If the review determines that districts continue to provide services in public spaces, then propose City Code for Council approval governing: (a) District formation; (b) Scope of allowed services in public spaces; (c) Inclusive district governance; and (d) Accountable and transparent reporting. Revenue and Financial Services hired a coordinator in August 2021 to review the oversight and structure of enhanced services districts. Its goal is to bring recommended Code changes to Council by September 2022.(Enhanced Service Districts: City provides little oversight of privately funded public services)
We recommended that the City implement oversight steps for the workforce and contractor diversity grant program. These were outlined in its agreement with Prosper Portland and included obtaining all required performance evaluations and progress reports. During our 2021 progress report, we noted that Prosper was reporting data, such as the businesses and workers who received technical assistance, including demographics, success stories, and challenges. These reports continued into the following year, but the reports did not include goals to define success. The initial agreement outlining the program required Prosper to report on the achievement of measurable outcomes. According to the most recent update to the agreement, August 2022, Prosper and the City were still working to identify performance goals and a plan to track and measure them. (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 included the goals in its 2020 annual report but not in its 2021 report. Staff said the omission was an oversight and Procurement plans to include the goals in next year’s document. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
We recommended that Procurement recognize firms and bureaus that were successful at meeting goals. Procurement said it was working with stakeholders to create an online dashboard that would highlight bureau and contractor success. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
We recommended that Procurement evaluate the results of grant awards on growth in the construction market and whether the City’s costs to administer them were justified. Procurement collected anecdotal information about successful businesses from Prosper Portland’s progress reports but did not understand the effect of the grants on the overall construction market. Procurement said it planned to conduct a disparity study to measure baseline participation by certified contractors in the market. (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 said that it could not set a goal until it commissioned a study to measure the number of available contractors in the construction market and whether there were demographic disparities present. Procurement’s 2021 annual report included data on prime contractors participation but did not include a goal. (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 requiring bureau directors to sign exemption forms but did not report how many there were. We recommended disclosure because our 2020 report found that more than half of eligible contracts were exempted from the program. Procurement said it was in the process of redesigning the program and would consider reporting the number of waivers as a part of the redesign. (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. As was the case last year, Procurement staff said it continued to engage with the contracting community to develop plans for the future of the program. (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. As was the case at the last update, Procurement said that it continues to discuss this issue with stakeholders. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
We recommended that Procurement formalize tracking of communication between staff and vendors. Procurement said that the new Inclusive Contracting Manager would develop an outreach strategy to ensure fairness, increase awareness of 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 said it plans to use post-project reports to inform future decisions, such as which resources to devote to workforce development, technical assistance, and a new contractor bonding program. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
We recommended Procurement Services update the Procurement Card manual to ensure that the rules it references are accurate and enforceable. Procurement Services drafted an update to its Procurement Card Policy manual with the goal of making rules clearer, accurate, and enforceable. The manager anticipated implementing the manual when the City transitions to a new procurement card provider in August 2022. (City credit card use slowed during pandemic but exposed underlying risks)
We recommended Procurement Services implement certification and recertification testing to ensure cardholders can demonstrate knowledge of rules. Procurement Services is working on a training for card holders to improve understanding of recent program changes, roles and responsibilities, and consequences for policy violations. It also drafted a test for existing and new cardholders to verify their understanding of rules and responsibilities. The manager anticipated rolling out the training and testing with the transition to the new card provider. (City credit card use slowed during pandemic but exposed underlying risks)
We recommended Procurement Services update its manuals to incorporate the parties responsible for compliance. The draft manual includes information about the positions responsible for monitoring compliance. (City credit card use slowed during pandemic but exposed underlying risks)
Implemented Recommendation Details
We recommended either following the City Code and Loss Prevention Policy or developing and following 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 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 that Risk Management provide access and training on the Risk Management Information system to employees in other bureaus with risk management responsibilities. Risk Management said that they could not provide access because allowing more access would increase the risk of improperly disclosing confidential information and that the system was difficult to use and understand. Instead of allowing access, Risk Management shares quarterly reports with bureaus to identify claims and trends. Risk Management staff said that they would be purchasing a new information system which might be more capable of allowing access to staff in other bureaus. (Risk Management: City loss prevention needs a proactive approach)
We recommended that Risk Management either re-introduce biennial service agreements with the eight bureaus with the most claims or more clearly define the services it will provide and how they will be provided. Risk Management worked with bureau staff to revise the loss prevention code and policy to more clearly define the services it provides. (Risk Management: City loss prevention needs a proactive approach)
We recommended that Risk Management update the general and fleet liability claims manual. Risk Management said that it conducted a full review of all policies and procedures for worker’s compensation and general liability claims. Risk Management published new versions of the manuals. (Risk Management: City loss prevention needs a proactive approach)
We recommended that Risk Management ask the next Charter Review Commission to raise the dollar limit for Council approval of claims. Risk Management requested that the Commission raise the threshold from $5,000 to $25,000. (Risk Management: City loss prevention needs a proactive approach)
We recommended that the Revenue Division use 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 centralize and formalize outreach to contractors, certified firms, and suppliers to ensure consistency and fairness. Procurement created a new position, the Inclusive Contracting Manager, to build relationships with vendors and identify sourcing opportunities for equitable contracting. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
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 confirm funding sources for its workforce and contractor diversity grant programs. A Multnomah County judge ruled in March 2022 that the City could use utility ratepayer funds for the initiatives in accordance with criteria that links them to water or sewer services. (Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship)
We recommended Procurement Services ensure the Bureau of Technology Services has direct access to Citywide procurement card transaction data so it can use it to identify violations of technology purchasing rules and opportunities to maximize savings. Procurement Services provided Technology Services with direct access to procurement card transaction data. Technology Services said it has used the data to identify and address some violations of technology purchasing rules. (City credit card use slowed during pandemic but exposed underlying risks)
Pending Recommendation Details
We recommended that the Chief Financial Officer develop Citywide standards for collections by convening a City Council work session or other collective effort. The standards should, at a minimum, include: (a) a consistent collections process, including timing and content of collection letters, how additional charges are handled, availability of payment plans and waivers, timeframe for sending accounts to a collection agency, and how long the collection agency should pursue payment; (b) a requirement and review process to write documents in plain English and translate them into other languages or provide translation information in every document; and (c) a hardship process that makes accommodations more explicit, consistent, and easier to access, while preserving flexibility where necessary. One advocate suggested the City develop a consumer protection office for people to contact with questions about their bills. The Council work session should include discussion of whether improved collections practices could best be accomplished by consolidating City collections. (Taxes, fines, and fees: Customers who owe caught in a maze of inconsistent and uncoordinated collection strategies)
The Chief Financial Officer should post a summary of citywide progress toward meeting collection standards until all bureaus are in compliance. (Taxes, fines, and fees: Customers who owe caught in a maze of inconsistent and uncoordinated collection strategies)
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, 2022.
Translated reports
Most reports 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 KC Jones.
Links
Risk Management: City loss prevention needs a proactive approach
Short-Term Rental Regulation: Enforcement is lax and effect on housing is unknown
Report Link https://www.portlandoregon.gov/auditservices/article/693466
Follow-up Link https://www.portland.gov/year2shorttermrentals
Enhanced Service Districts: City provides little oversight of privately funded public services
Report Link https://www.portlandoregon.gov/auditservices/article/764910
Follow-up Link http://www.portland.gov/year1-ESD
Equity In Construction Contracting: Some goals achieved despite mismanagement, waste, and gamesmanship
City credit card use slowed during pandemic but exposed underlying risks:
Report Linkhttps://www.portland.gov/pcard-audit
Follow-up Link http://www.portland.gov/year1pcard
Taxes, fines, and fees: Customers who owe caught in a maze of inconsistent and uncoordinated collection strategies