Arts Tax: City needs to make improvements to deliver on voter approved arts education and grants commitments

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Summary

Portland voters approved a $35 income tax in 2012 to pay for arts teachers and provide grants to arts organizations. Each year, an average of $11.2 million from the Arts Tax flows into the Arts Education and Access Fund. 

The tax has expanded arts education for elementary school students, but the City did not establish goals or metrics until recently. As a result, the City has not been able to effectively monitor school district performance or assess differences in students' experiences across and within districts.

Grants from the Fund have provided valuable support for arts organizations, but the amount available for grants is shrinking. Grants are provided only after collection costs and payments to districts are made. Because those costs are rising and the tax is not adjusted for inflation, the Fund's purchasing power is eroding. We found the City's method for calculating payments to districts either further limits the amount available for grants or does not fully compensate districts. 

Despite promises to voters, the City has not ensured that these grants improve access to arts and culture for students and underserved communities. Portland City Code and the way the City distributes funding do not prioritize improving access. And the City cannot determine or demonstrate that most grants improved access because it is not holding grantees to specific outcomes. 

We also found that the City's monitoring responsibilities and the Oversight Committee's role and authority are not well defined, increasing the risk that the Arts Access Fund is not used as intended. 

We make recommendations to strengthen the City's monitoring and coordination of arts education, maximize funding available for grants, ensure grants improve arts access and advance program goals, and improve financial monitoring and oversight.

Background

The City promised to improve arts education and access for students and underserved communities with the Arts Tax

In November 2012, Portland voters approved a tax to create a dedicated source of money for arts education and arts organizations. The ballot asked voters if they should restore arts and music for schools, and provide money for the arts through an income tax of $35 a year. Ballot materials said the tax would pay for one arts teacher for every 500 Portland elementary students and that remaining money would be granted to nonprofit arts organizations and schools to improve arts access for students and underserved communities.

City Council created the Arts Education and Access Fund through City Code, and the Revenue Division began collecting the tax the year after it was approved. As of Fiscal Year 2024-25, the tax had generated a total of about $146 million.

Money from the tax flows into the Arts Access Fund. The City uses the money in an order specified in Code. Of the $11.9 million that Portlanders paid and $300,000 the Fund earned in investments in FY 2024-25:

1. First, $2 million went to cover the Revenue Division's tax collection and administration costs.
2. Second, $7.8 million went to six Portland-area school districts to hire elementary school arts teachers.
3. Third, $2.1 million went to the Office of Arts & Culture, where up to 3% of total revenue can go to arts education coordination staff and activities. Any remaining money and overdue tax payments for prior years are awarded as grants to local arts organizations by the Office of Arts & Culture, in coordination with the Grants Management Division.
4. Fourth, $330,000 went to the Fund's reserve. According to a Revenue Division manager, collections in excess of allocations go to the reserve.

Figure 1. The City distributes money from the Arts Tax to pay for tax collection, elementary arts teachers, City coordination, and grants

View full size image of Flow diagram showing Arts Tax funds from collection to the Arts Access Fund, then distributed to the City’s Revenue Division for collection costs, Portland area school districts for K–5 arts teachers, and the City’s Office of Arts & Culture for grants and coordination.

The Fund is overseen by a voter approved public committee. The Arts Access Fund Oversight Committee is comprised of volunteers who are responsible for reviewing spending and reporting on the impact of the Arts Access Fund to the public and City Council.

The City has recently taken on responsibilities for Fund administration it had previously outsourced

Initially, the City outsourced administrative duties to the Regional Arts & Culture Council (RACC), a nonprofit organization contracted by the City from 1995 to 2024 to provide arts and culture services. In 2012, the City amended the arts and culture services contract to give RACC responsibility for coordinating arts education and managing Arts Access Fund grants. In 2018, we audited RACC's operations under its contract with the City and found the City was not providing thorough contract administration, oversight, or performance monitoring.

The City took on more administrative responsibilities related to the Arts Access Fund between 2018 and 2025. First, in July 2018, the City assigned a project manager to administer the RACC contract. In November 2018, the City hired its first City Arts Program Manager to develop the City Arts Program, which was intended to align and coordinate the City's arts and culture initiatives. Then, the City took over arts education coordination responsibilities from RACC in November 2022. In May 2023, the City hired its first Arts Education Program Manager. In October 2023, the City withdrew from the Intergovernmental Agreement with Metro, Multnomah, Clackamas, and Washington counties that designated RACC as the region's arts and culture agency. And in June 2024, the City let its arts and culture services contract with RACC expire and replaced the City Arts Program with the Office of Arts & Culture. Now the City administers the larger grant program, General Operating Support, and has a contract with RACC to administer the Small Grants program.

Figure 2. The City took on more administrative responsibilities related to the Arts Access Fund since 2018

View full size image of Timeline showing key actions the City took between 2018 and 2024 as it assumed administrative responsibilities from RACC.

Results

The objective of our audit was to determine if the City has managed the Arts Access Fund to assure high-quality arts education and arts access for students and underserved communities. 

We found that arts education is different for students depending on their school and district. The City could not assess if this is a problem or otherwise effectively monitor arts education supported by the Fund because it had not established metrics or goals for high-quality arts education until 2024.

We also found that less grant money is available for arts organizations partly because the City allocates more to districts than they need to hire the required arts teachers.

We found that the City has not ensured that grants improve arts and culture access for students and underserved communities, and has not held organizations to specific outcomes. 

We also found that City monitoring responsibilities and the Oversight Committee's role and authority are not well defined, increasing the risk that the Fund is not used as intended. 

The Office of Arts & Culture should continue to establish goals and metrics for high-quality arts education 

Each year, the City distributes an average of about $7.2 million in Arts Access Funds to Portland area school districts to hire certified arts teachers. According to the Office of Arts & Culture, the Fund helped increase arts instruction in kindergarten through fifth grade (K-5) across the districts from 31 full-time equivalent positions before the Arts Tax, to 111 positions during the 2023-24 school year.

The Revenue Division calculates districts' disbursements in order to fund one teacher for every 500 Portland K-5 student enrolled in eligible schools. Schools are eligible if they serve Portland students and their attendance boundaries overlap with the City's geographical boundaries.

In 2012, the City entered into agreements with school districts requiring them to provide arts education to all K-5 students. The agreements and Code state that districts should provide high-quality arts education, and that every K-5 student in Portland should have access to arts education. Despite this, the agreements and Code do not define "high-quality arts education." They also lack specific goals or metrics for high-quality arts education, such as school level targets for the number of students that arts teachers see a week and instructional minutes.

In the absence of goals and metrics, we found that students had different arts education experiences across districts and even among schools within the same district. During the 2023-24 school year, we found wide variation across schools in average weekly arts instruction time, arts teacher-to-student ratios, types of arts classes offered, the number of students arts teachers see a week, and the portion of arts teachers paid with district money. The Office's Arts Education Program Manager said they do not expect consistency across districts because each district is diverse and has different resources and priorities. The Manager agreed that clear goals and metrics are important. Without them, the City cannot determine or demonstrate whether this variation is expected or problematic. This limits the City's ability to assess performance, make informed adjustments, and communicate results to the public.

Figure 3. Arts education experiences varied across schools

Source: Audit Services' analysis of 2023-24 school level data reported by six school districts that receive Arts Access Funds to the Office of Arts & Culture. *Full-time equivalent positions, not individuals.

School districts determine how to provide arts education and meet state standards, and per Code, the City is responsible for monitoring district performance and reporting compliance concerns to the Oversight Committee. Guidance from the National State Auditors Association on performance metrics recommends that program goals and objectives be clear and measurable. Despite this, the City outsourced arts education coordination to RACC until November 2022 without requiring RACC to set goals or define metrics. As a result, neither RACC nor the City have been able to effectively monitor or evaluate districts' provision of arts education, identify potential problems, or address them.

The City is working to establish goals and metrics for a high-quality arts education. The Office of Arts & Culture began working with Portland State University's Regional Research Institute in October 2024 to develop a framework to assess the conditions needed for a high-quality arts education. According to the Arts Education Program Manager, the framework will help create a common definition and metrics to evaluate arts education. The Office began piloting the framework with schools in the spring of 2025 and managers anticipate the framework will be fully implemented with a public dashboard in the 2026-27 school year.

The City should pay districts to cover the average arts teachers' salary to maximize money for grants

After covering its collections costs, the City first distributes the Arts Access Fund to school districts to meet the voter approved teacher-to-student ratio. The amount available for grants to local arts organizations is whatever remains after district allocations and the City's arts education coordination costs are paid. These costs are rising, but the tax is not adjusted for inflation, so the Fund's purchasing power is eroding. Under its agreements with districts, the City calculates allocations to districts based on the average salary of all teachers, not arts teachers. As a result, there was less money available for grants in the fiscal year we reviewed because the City paid most districts more than the cost of hiring arts teachers. In some cases, the City also paid districts for benefits in excess of what districts were required to provide.

Arts Tax ballot materials, Code, and agreements with school districts state that a primary purpose of the Arts Access Fund is to hire arts teachers. The ballot materials and agreements specify that the Fund should be allocated to achieve a ratio of one arts teacher for every 500 students.

The City's agreements with districts also say the City will cover employer-paid payroll costs for the required arts teachers. The agreements and separate instructions for districts list taxes, insurance, and pension as examples, but do not specify the types of taxes and insurance that districts should include in the salary data they provide the City.

We found the City paid districts more than it cost to hire the required number of teachers and sometimes paid for overstated and inconsistent payroll costs. For example, in the fiscal year we reviewed:

• The City overpaid five of six districts between $8,000 and $1.3 million and underpaid one district $18,000 because disbursements were calculated using the average salary of all teachers rather than arts teachers.
• The City's disbursements to two districts included health insurance premiums for part-time teachers that were $1,900 greater than premiums the districts were contractually obligated to pay.
• One district's salary data included early retirement costs, and the City included those costs in its disbursement. Another district specifically stated that it did not include such costs. Because the agreements and instructions do not specify which types of taxes and insurance are allowed, we cannot tell whether this resulted in overpayment or underpayment.

The City's allocations did not reflect the cost to hire or retain arts teachers because its agreements with districts require the Revenue Division to calculate district allocations using the average salary of all teachers at eligible schools, rather than the salaries of arts teachers alone. In the fiscal year we reviewed, the average teacher salary exceeded the average arts teacher salary in five of six districts, while the opposite was true in one district.

Figure 4. The average teacher salary exceeded the average arts teacher salary in most districts

View full size image of Bar chart showing average teacher and arts teacher salaries in Centennial, David Douglas, Parkrose, Portland Public, Reynolds, and Riverdale districts. In all districts except Parkrose, teachers earn more than arts teachers; in Parkrose, arts teachers earn more.

According to a Revenue Division manager, the calculation was designed this way by City and school district leaders in 2012 because it was administratively easier for school districts. However, we found that each district provided the Revenue Division with salaries for each teacher's position, which could be used to calculate average arts teacher salaries and district allocations that more accurately reflect actual costs.

Staff from the Revenue Division reviewed salary data from districts and adjusted the averages so that only K-5 classroom teachers from eligible schools were included. They did not scrutinize the employer-paid payroll costs that districts included.

If the City's payments to districts reflected the cost of hiring arts teachers and the health insurance premiums districts are required to pay, it could have disbursed $1.3 million (36%) more in grants to arts organizations in FY 2023-24.

Figure 5. The City could have disbursed $1.3 million more in grants in FY 2023-24 if it used average arts teacher salary and actual insurance premiums 

View full size image of Additional funds the City could have granted to arts organizations in FY 2023-24 if average teacher salary and actual insurance premiums were used: $1.3 million.

Because the City calculates Arts Access Fund disbursements using the average of all teacher salaries, districts with arts teacher salaries below that average receive more than needed, while districts with salaries above the average are not fully reimbursed. Either way, the amount available for grants to arts organizations is affected. At a time when arts organizations and school districts face significant financial pressures, the City should align district payments more closely with actual costs either to maximize the amount available for grants or ensure that districts can fully cover the cost of hiring the required arts teachers.

The City should develop plans to ensure grants improve access for students and underserved communities 

We found that the City has not consistently fulfilled its commitment to voters to improve arts access for students and underserved communities through two grant programs supported by the Arts Access Fund. This is because the City never identified which communities were underserved with respect to arts access or developed a plan for how grants should improve access. Code specifies that the majority of money can go to grants without goals or requirements to improve access. Council accepted a regional arts plan with strategies to improve funding to underserved communities in May 2024. However, progress on the City's implementation plan has been on hold since the Mayor issued an Executive Order at the end of July 2025 requiring the City to provide services without regard to or preference for protected-class status, consistent with federal civil rights and nondiscrimination laws as interpreted by the courts.

The Arts Access Fund supports two grant programs—General Operating Support to provide support to arts organizations, and Small Grants to improve arts access for Portlanders, with a focus on students and underserved communities. As of FY 2024-25, the City distributed approximately $30 million in Arts Access Funds through the Operating Support program, and $3 million through the Small Grants program since FY 2013-14.

Figure 6. Most grant money went to General Operating Support for arts organizations

View full size image of Grants distributed between FY 2013-24 and FY 2024-25: $3 million in Small Grants and $30 million in General Operating support.

The City committed to voters that it would improve arts access for students and underserved communities through grants. Those commitments are consistent with the City's core values of anti-racism and equity as well as a regional arts plan called "Our Creative Future" that City staff helped develop and Council accepted in May 2024.

Despite its 2012 commitment to voters, the City has not identified which groups were underserved in terms of arts access or developed a definition. 

In July 2025, before the impact of the Mayor's Executive Order on City programs was known, we surveyed arts organizations that receive Operating Support grants. For this survey, because the City had no definition of "underserved" with respect to arts access, we defined groups that "Our Creative Future" aims to support as underserved communities: 

• Black, Indigenous, and other people of color;
• Other communities, including immigrants, LGBTQIA+ people, people with disabilities, the unhoused, neurodiverse people, seniors, and youth who are disconnected from education and work. 

In response to our survey, some organizations self-reported that they did not serve students.

Most representatives reported that their organizations provide services to the communities "Our Creative Future" considers underserved, but the degree of focus on these groups varies. For example, some organizations primarily offer culturally specific programming, whereas most include these communities as part of a broader audience.

Community engagement and research conducted for "Our Creative Future" found that most arts grant funding in the region already goes to a small number of larger-budget organizations, and many smaller-budget organizations directly benefit the communities that "Our Creative Future" considers "underserved."

We found that on average, Operating Support awards granted the first fiscal year the Office of Arts & Culture administered the program continued these funding disparities, resulting in greater gains for organizations with larger budgets. The City's FY 2024-25 Operating Support awards for the five organizations in the top three income tiers grew by an average of 98% to 159%. In contrast, the awards for the 61 organizations in the bottom three income tiers declined by an average of 12% to 39%. 

Figure 7. Average Operating Support awards for organizations with higher eligible incomes increased more than awards for organizations with lower eligible incomes between the last two fiscal years

View full size image of Slope graph showing changes in Operating Support awards by average eligible income tier from FY 2023-24 to FY 2024-25. The top three tiers all received increases 98-159%, the middle two tiers grew 9-12%, and the bottom three tiers decreased 12-39%.

The City has not ensured that Arts Access grants improve arts access for students and underserved communities. This is because the City did not define "underserved," create a plan for how the grant programs should improve arts access for students and underserved communities, or even specify whether the Operating Support program is intended to do so. 

More significantly, when the City outlined how Arts Access Fund grants would be allocated in Code, it did not prioritize improving access to students and underserved communities. 

Code specifies that up to 95% of grant funds can go to nonprofit arts organizations that meet certain criteria including artistic excellence, community service, and fiscal competence. The Office of Arts & Culture distributes grants to these organizations through the General Operating Support program. There are no goals or requirements in Code that these grants improve arts access for students and underserved communities. The City's contract with RACC likewise did not require Operating Support grantees to improve access.

On the other hand, Code requires that only 5% of funds be allocated for grants and programs to improve arts access. The Office of Arts & Culture distributes these funds through the Small Grants program.

Figure 8. Code requires only 5% of funds be used for grants with access-improvement requirements 

Source: Audit Services' visualization of Code. *After collections, district disbursements, and arts education coordination costs.

RACC and the City have consistently granted a greater proportion than Code requires. For example, an average of nearly 10.5% of grant funds were distributed through the Small Grants program between FY 2020-21 and FY 2024-25.

Figure 9. RACC and the City distributed more than 5% through Small Grants in the last five fiscal years

View full size image of Vertical bar chart showing that RACC and the City distributed more than 5% of grant funds through the Small Grants program each year from FY 2020-21 and FY 2024-25.

Although RACC and the City have distributed more in Small Grants than Code requires, the City is allocating fewer resources to grants specifically intended to improve arts access for students and underserved communities. Arts Access Funds available for the Small Grants program declined by 35% from $541,000 in FY 2023-24 to $350,000 in FY 2024-25, and will remain at $350,000 in FY 2025-26. According to the Grants Program Manager, RACC allocated an unusually high amount of Arts Access Funds in Small Grants in FY 2023-24 because it was spending reserved funds before the end of the City's contract that fiscal year.

The City promised voters that the Arts Tax would fund grants to improve access for students and underserved communities. However, most funds are awarded through grants that do not include such requirements. Developing clear plans would help the City better strategize and communicate how it will disburse Arts Access Funds in alignment with its commitments and core values.

The Office of Arts & Culture developed a plan to implement "Our Creative Future" in spring of 2025 and began to engage with Operating Support grantees and the public. The draft plan includes a goal to empower the arts and cultural community with sufficient, sustainable funding and other resources. The plan was paused in late July 2025 when the Mayor issued an Executive Order requiring City employees, programs, and services to comply with applicable federal civil rights and nondiscrimination laws as interpreted by the courts. It also requires the City Administrator to work with City bureaus and offices to review programs and services for ongoing and continued compliance, including undertaking disparity studies as appropriate to identify historical discriminatory actions taken by the City that continue to need remedy and repair. 

The Office of Arts & Culture should demonstrate that Operating Support grants advance program goals

In 2024, the Arts Access Fund Oversight Committee reported that Arts Access Fund grants need to focus on the City's commitment to improve arts and culture access for students and underserved communities. The Committee recommended the City provide data to demonstrate progress toward that goal. 

However, the City has not defined what it means to be "underserved." Operating Support grantees have not been required to collect or report data to demonstrate that they improve arts and culture access for students and underserved communities. And the City's contract with RACC did not include such requirements, so RACC did not impose them on grantees either. 

When the City began managing the Operating Support program in July 2024, the Grant Program Manager collected self-reported information from organizations about how they improve access, but did not hold organizations accountable to specific outcomes or definitions. 

Guidance on performance metrics from the Institute for Internal Auditors and National State Auditors Association recommends focusing outcome measures on the impact a program is intended to achieve. And "Our Creative Future" recommends that jurisdictions align arts funding policies with best practices in equity and accessibility, and develop metrics and collect data to track change and success. 

Because the City has not required Operating Support organizations to collect or report data on how they improve access or achieve specific outcomes, it cannot demonstrate to the public that these grants advance the City's commitments. 

The City should review partners' financial information and address deficiencies to ensure money is used as intended

The City correctly requires districts and RACC to share financial reports. However, we found that the City has not ensured that the reports include the required information about the Arts Access Fund. Without this, the City cannot use the reports to monitor how partners spend the money the City allocates. 

City agreements require school districts' and RACC's annual financial reports to detail Arts Access Funds received and spent. When we reviewed districts' and RACC's financial reports in our 2015 audit of the Arts Tax, we found that five of the six districts' and RACC's reports did not include the required information. We recommended the City take steps to address the issue. 

Figure 10. We recommended over 10 years ago that the City define financial monitoring roles and responsibilities to address noncompliance with financial reporting requirements

"The Mayor should review the reports from Revenue Division and the Regional Arts and Culture Council and develop a proposal to City Council to…clarify the roles, responsibilities for school districts, Regional Arts and Culture Council, Division of Revenue, and Commissioner-in-Charge, to ensure a central point of contact responsible for ensuring all Arts Tax provisions are met, including the requirement for audited financial statements." 

Source: "Arts Tax: Promises to voters only partly fulfilled," July 2015.

In this audit, we found that partners' recent financial reports did not consistently include the required information. For example, we reviewed school districts' FY 2022-23 financial reports and found that three of the six districts did not include specifics about Arts Access Funds or how the money was spent. Similarly, we reviewed RACC's financial reports for two recent fiscal years and found that neither accurately reflected how much Fund the organization received or how the money was spent. 

We also found that one district did not spend $32,000 (10% of its disbursement) or report the underspending as the City's agreement requires. After we alerted the Office of Arts & Culture, they confirmed the district rolled the money over to the next fiscal year's revenue, as permitted. At that time, we learned the City had not determined or communicated to districts where to report underspending. 

The City did not correct district noncompliance with financial reporting requirements that we reported in 2015, nor did it identify that partners' recent financial reports violated City agreements in place in FY 2023-24. This is, in part, because it has not clearly defined financial monitoring roles and responsibilities for the Revenue Division, the Office of Arts & Culture, or Grants Management. For example, City agreements require partners to provide financial reports, but the agreements and Code do not state who should review the reports or what reviews should entail. The agreements and Code also do not define who is responsible for verifying that districts hired the number of teachers their allocation was based on. And although the Office of Arts & Culture is responsible for monitoring district performance and reporting compliance concerns, it does not directly receive district financial reports; instead, school districts submit them to the Revenue Division. As a result, the City could be slow to spot noncompliance or flag compliance issues for the Oversight Committee. 

Federal guidance on internal controls recommends that management oversee partners, design and perform controls to mitigate and detect risk, monitor controls over time, and take timely action to correct problems. 

The risk of waste and misuse of the Fund is heightened when the City cannot use some partners' financial reports for monitoring and has not consistently reviewed the others. For example, the City cannot use RACC's FY 2022-23 and 2023-24 financial reports to confirm RACC used Arts Access Funds as required, how much went to grants, and how much was rolled over. RACC's financial reports for those years were particularly important.

City leaders ended the City's contract with RACC for arts and culture services effective July 2024, in part due to concerns with RACC's financial reporting. After the contract ended, the City and RACC worked to identify and settle outstanding debts. In August 2024, the City's contract manager identified the Arts Access Fund was mistakenly described as another City arts funding program in RACC's FY 2022-23 financial report and notified RACC. Despite this, the City issued the final payment to RACC before the next year's financial report was available for review. We found that the FY 2023-24 report repeated the error and omitted details on Arts Access Funds received and spent, even though the City allocated more than $2 million to RACC that fiscal year. 

Similarly, the City cannot use three districts' financial reports to monitor how the districts spent more than $1.5 million disbursed in FY 2022-23 because the reports do not include complete information about the Arts Access Fund.

The City should formalize the Oversight Committee's roles and responsibilities and City support

In ballot materials, the City committed to form an independent oversight committee that is representative of the City's diverse communities to annually review expenditures and report on the Arts Access Fund's impact to the public. To this end, the Arts Access Fund Oversight Committee was established in 2012. 

Our 2015 Arts Tax audit concluded that the Oversight Committee delivered on the ballot measure's commitment to provide oversight by a public committee. It also highlighted the risk of relying on volunteers with limited City staff support because new volunteers may be less able or willing to volunteer the time required to collect and analyze information and produce the annual report.

In this audit, we found the Committee's role, authority, independence, and City support were unclear. For example, ballot materials, Code, and agreements with districts are not consistent about the Committee's independence and role. City support responsibilities are not defined in ballot materials and agreements with districts. And while Code assigns the Office of Arts & Culture responsibility for collecting data from school districts at the Committee's request, the Office recently began providing other support to the Committee. 

Figure 11. Ballot materials, Code, and agreements with districts contain different Committee attributes 

Source: Audit Services' analysis of Arts Tax ballot materials, Code, and agreements with school districts.

The Committee's 2023 bylaws specified City support responsibilities, including assistance with meetings and reporting, but the responsibilities were assigned to an Office that was dissolved in July 2024 when the City's form of government changed. The Office of Arts & Culture updated the bylaws to reflect the Office of Arts & Culture's support role in December 2025, after we finished fieldwork for this audit.

We also found that the Committee has not always functioned effectively. Committee leaders and the City have struggled to recruit and retain members, resulting at times in an insufficient number to conduct business and a membership that does not reflect the City's diverse communities, as promised. And with historically limited administrative support from the City, the Committee's work has sometimes been onerous. The Committee's public reports have also not always been timely and contained inconsistent data. For example, we identified years when the reported grant figures were between 1% to more than 100% different from RACC's financial or grant disbursement reports. 

The Committee's role and City support have recently become clearer, thanks to the City's Advisory Bodies Enhancement Project. City support has also improved since the Office of Arts & Culture became more involved. The Arts Education Program Manager is doing administrative work for the Committee, assisting with the annual report, and developed a district reporting template and data verification process. A Committee leader said the Office's support has improved the Committee's data collection and reporting. Although the Committee's role and City support are clearer, the improvements have yet to be formalized in Code and agreements with partners.

If the Committee's roles, responsibilities, independence, and City support are not clearly defined, documented, and shared with Arts Access Fund partners, recent improvements may not last. Changes in Committee members and City staff could weaken oversight and lessen voters' trust.

Recommendations

 To ensure that the City can effectively monitor how districts provide arts education to Portland students, the Office of Arts & Culture should: 

1. Continue its work to pilot and implement the Arts Education Framework and relevant goals and metrics, including for arts teacher-to-student ratios, arts teacher caseloads, average arts class sizes, average number of arts instructional minutes, and district funding for arts education.    
2. Propose updates to intergovernmental agreements to include the Arts Education Framework and district reporting requirements, and monitor districts' performance accordingly. Reporting requirements should ensure that districts gather and share timely and accurate information to help the City's monitoring and the Oversight Committee's public reporting.

To help ensure sustainable grantmaking and fair compensation for school districts:

3. The Revenue Division should work with the Office of Arts & Culture to develop clear guidance to specify allowable employer-paid payroll costs, communicate those to districts, and monitor districts' compliance accordingly.
4. The Office of Arts & Culture should work with the Revenue Division to propose updates to intergovernmental agreements to:
   1. Include details on allowable employer-paid payroll costs; and
   2. Ensure the City's disbursements to districts cover the average salary of one arts teacher for every 500 students and maximize Arts Access Funds available for grants.                                   

To ensure and demonstrate that Arts Access Fund grants improve arts access for students and underserved communities and advance program goals, the Office of Arts & Culture should:

5. Define what constitutes an underserved community with respect to arts access and use existing or newly gathered data to identify those communities.
6. Work with the Grants Management Division to develop an Arts Access Fund grant plan to improve arts and culture access for students and underserved communities, and align funding with the plan.
7. Work with the Grants Management Division to document the City's purpose, priorities, and strategies for the General Operating Support program, and develop program outcome metrics that align with the purpose and performance metrics best practices. 
8. Work with the Grants Management Division to collect data to measure and evaluate how Operating Support grants advance the purpose of the program.
9. Propose updates to City Code to reflect:
   1. The Arts Education Framework;
   2. Changes to the disbursement calculation and allowable employer-paid payroll costs;
   3. Underserved communities with respect to arts access;
   4. The Arts Access Fund grant plan; and
   5. The purpose of the General Operating Support program.

To effectively monitor Arts Access Fund partners and ensure the Fund is used as intended, the City should:

10. Define monitoring roles and responsibilities for the Revenue Division, the Office of Arts & Culture, and the Grants Management Division, including specifying:
    1. Where districts should report Arts Access Fund rollover;
    2. Who is responsible for monitoring partners' financial reports, what City reviews of partners' financial reports should entail, and how to handle noncompliance; 
    3. Who is responsible for confirming districts use Arts Access Funds as required and monitoring the teacher-to-student ratio; and 
    4. How the City will ensure that the responsible parties perform their monitoring duties.

To ensure effective and consistent oversight of the Arts Access Fund:

11. The City should clarify the Oversight Committee's role, authority, independence, and dedicated City staff support to help ensure:
    1. The Committee has an adequate number of members who represent the City's diverse communities.
    2. The Committee's public reporting provides timely, transparent, high-quality information about expenditures and impact of the Arts Access Fund without placing an undue burden on Committee members.                                      
12. The Office of Arts & Culture should propose updates, as appropriate, to agreements with partners, City Code, and Committee materials to reflect the Committee's clarified oversight role, responsibilities, independence, authority related to City actors and partners, and the City's support of the Committee. Updates should reflect the new Arts Access Fund management structure.

The City Administrator generally agreed with our findings and recommendations

We provided this report to the City Administrator, the Chief Financial Officer, and the Deputy City Administrators for Community and Economic Development, and City Operations. The City Administrator responded on behalf of the City and generally agreed with our audit recommendations. 

How we did our work

Our audit objective was to determine if the City had managed the Arts Education and Access Fund to assure high-quality arts education and arts access to students and underserved communities.

The scope of the audit was the City's management of the Arts Access Fund between November 2012 and October 2025. We focused on City actors with Fund responsibilities: the Office of Arts & Culture, and its predecessor, the City Arts Program; the Revenue Division; the Grants Management Division; and City oversight of the contract with Regional Arts & Culture Council (RACC) for arts and culture services between 2012 and 2024. We also included the Arts Access Fund Oversight Committee because of its voter approved oversight and reporting responsibilities. RACC and school districts have important roles with the Arts Access Fund, but were not the focus of our audit because they operate separately from City government.

Our audit did not explore: the structure and appropriateness of the Arts Tax; tax collection practices and efficiency; the Arts Education and Access Fund reserve; allocations to charter schools or how charter schools used the Fund; school district decisions and practices like teacher pay and placement or decisions about how districts and schools provided arts education; or Operating Support and Small Grants funded by the City's General Fund. We sought input from arts teachers on their experiences through an online survey shared by the Office of Arts & Culture in its June 2025 newsletter to arts educators. However, we did not receive any complete responses. 

To accomplish our audit objectives, we:

• Interviewed managers from the Office of Arts & Culture, Revenue Division, and Grants Management Division; staff from the City Budget Office, City Attorney's Office, and the Vibrant Communities Service Area; current and former chairs of the Arts Access Fund Oversight Committee; current and former staff and managers of RACC; a representative from RACC's accounting firm; and a school district arts education manager. 
• Attended meetings organized by the Office of Arts & Culture and Grants Management Division for Operating Support organizations and reviewed meeting materials. 
• Surveyed 152 representatives of FY 2024-25 Operating Support organizations whose contact information was provided by the Office of Arts & Culture. We analyzed the 55 responses (36%) we received. The results cannot be generalized to all Operating Support organizations because some organizations may have responded multiple times. We also interviewed a judgmentally selected sample of representatives from five arts organizations to supplement the information captured in the survey.
• Reviewed City records, contracts, standards, and laws: Arts Tax ballot materials; City Code, core values, policies, and reports; Council records and meeting transcripts; Council resolution accepting "Our Creative Future, a regional framework to advance arts & culture for all;" Intergovernmental Agreements effective between 2012 and 2025 with Portland Public Schools, Parkrose, Reynolds, Centennial, David Douglas, and Riverdale school districts; contracts with RACC for arts and culture services between 2012 and 2024, and Small Grants administration in FY 2024-25 and the next fiscal year; 2018 City Attorney memos about the Oversight Committee and purpose of the Arts Access Fund; teacher union contracts effective during FY 2023-24 with each of the six districts; and Oregon arts education standards and laws.
• Reviewed financial records from the City and its partners: the City's Annual Comprehensive Financial Reports (ACFR) for FY 2014-15 and FY 2023-24; Revenue Division reports of Arts Tax revenue and Arts Access Fund disbursements between FY 2013-14 and FY 2024-25; RACC's independent financial audits for FY 2014-15 to FY 2024-25; each district's ACFR for FY 2022-23. We also compared RACC's financial audits with Revenue disbursement data, Oversight Committee reports, and RACC grant disbursement data.
• Reviewed program and Oversight Committee materials: responses from Operating Support organizations to Office of Arts & Culture surveys and questionaries; RACC materials about the FY 2024-25 and the next fiscal year's Small Grants program; online information about the Arts Access Fund; Oversight Committee reports, and Committee meeting materials.
• Assessed the City's work related to Arts Access Fund requirements and Oversight Committee recommendations.
• Reviewed best practices: Government Accountability Office's Standards for Internal Control in the Federal Government; Committee of Sponsoring Organizations of the Treadway Commission's Framework for Internal Controls; strategic planning guidance from the Government Finance Officers Association; performance metrics guidance from the National State Auditors Association, and the Institute for Internal Auditors; equitable grant decision making guidance from the U.S. Department of Labor, PEAK Grantmaking, Diversity in Philanthropy Project, and Grantmakers in the Arts; grant accountability guide from the Domestic Working Group.
• Reviewed media, and other audits: media about the Arts Tax, the Arts Access Fund, and funding for local arts organizations; and audits our office performed of the Arts Tax, accountability to voters, and RACC.
• Analyzed data from RACC for grants disbursed between FY 2020-21 and FY 2023-24 and from the Office of Arts & Culture for grants disbursed for FY 2024-25; changes in average eligible income tier-specific average Operating Support awards from RACC in FY 2023-24 and the Office of Arts & Culture in FY 2024-25; 2024 and 2025 revenue and expense data published on ProPublica's Nonprofit Explorer website for Operating Support organizations in the top and bottom income tiers in FY 2024-25; RACC's financial reports for FY 2022-23 and FY 2023-2024; information that school districts reported to the Office of Arts & Culture about schools that receive Arts Access Fund for the 2023-24 school year; teacher salary data reported to the Revenue Division from the six school districts, and the Revenue Division's calculations of Arts Access Fund disbursements for the 2023-24 school year.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
 

Audit Team: Tenzin Gonta, Deputy Director of Audit Services; Jenny Scott, Principal Performance Auditor; Jessica Lange, Senior Performance Auditor