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Summary
The Auditor’s Office found that the City’s failure to award grants from the Portland International Raceway–North Portland Trust Fund constituted inefficiency and waste. The breakdown of the grant program has denied Raceway-impacted neighborhoods the intended benefits of the Fund.
We recommend that the City award grants from the Fund on an annual basis, as intended. We also recommend that Portland Parks & Recreation revise the Fund policy to help ensure that grant program responsibilities are carried out.
Tip to the Fraud Hotline
The Auditor’s Office operates a Fraud Hotline to receive tips about suspected fraud, waste, inefficiency, or abuse involving the City government.
An October 2024 tip raised concerns about the Portland International Raceway–North Portland Trust Fund. According to the tip, the Fund’s grant program, which is intended to benefit North Portland neighborhoods impacted by the Raceway, has not resumed since the COVID-19 pandemic halted program activity. The tip questioned whether contributions remained in the Fund.
Our Hotline team opened an investigation into the status of the grant program and whether funds had been misused. This report explains the results of the investigation, as well as our recommendations for addressing the issues identified.
Background
Portland International Raceway is a City-owned facility operated by Portland Parks & Recreation. City Council established the Portland International Raceway–North Portland Trust Fund in 1989 to help mitigate the Raceway’s negative impacts on adjacent neighborhoods. The Fund uses fees collected from promoters of qualifying racing events to fund small neighborhood improvement grants. For example, past grant recipients have included Vanport Placemaking Project, Friends of Overlook House, Yaya Resources, Janus Youth Programs, Peace Lutheran Church, Columbia Slough Watershed Council, and Kenton Action Plan.
A 1997 Council Resolution and associated policy assign Fund and grant program duties to Parks and the Office of Community & Civic Life (formerly the Office of Neighborhood Associations). According to the policy, at least $20,000 per year is expected to be available for grant awards, and the grant-making process should typically be carried out during late fall or early winter each year. The policy allows Fund resources to be allocated to Civic Life for grant administration costs, such as staffing, supplies, or contractual services. The policy does not include accountability mechanisms to make sure the bureaus carry out their assigned duties. This could be problematic because Parks and Civic Life are in different service areas and are accountable to different Deputy or Assistant City Administrators. In addition, the policy assigns duties to the Commissioner-in-Charge of Parks, a position that no longer exists in Portland’s new form of government.
Figure 1. City policy assigns Fund and grant program duties to Portland Parks & Recreation, the Office of Community & Civic Life, and the Commissioner-in-Charge of Parks
Investigation Findings
As of July 1, 2024, the Fund contained approximately $282,378. Our investigation did not find evidence of missing or misused funds.
Parks has collected fees from race promoters in recent years. Records show that $35,000 per year in contributions were added to the Fund in 2019 and 2020. Parks reported that there were no qualifying races during the pandemic. Then, $35,000 was added to the Fund in 2022, and $70,000 per year was added in 2023 and 2024. The Fund also earned about $6,876 in interest income from 2019 through 2024.
Civic Life coordinated the award of small grants from the Fund in 2019 and 2020. Civic Life’s records indicate that approximately $40,373 was paid out to grantees. Some projects were not finished within the award year, so grant funds were distributed through 2023.
Following the 2020 awards, Parks paused the grant program until races resumed post-pandemic. Parks said it is a Fund requirement that if no money comes into the Fund and the Fund holds less than $200,000, no money should go out. For 2021, we found that to be a reasonable interpretation of endowment language included in the policy. However, the Fund has earned income for the past several years and no additional grants have been awarded.
Parks and Civic Life had begun periodic discussions about re-starting the grant program by July 2023, but Civic Life said it has not had the staff resources needed to perform the work. Civic Life told us it has lost staff and that the employees who historically administered the program have retired or been reassigned. Civic Life also noted its recent focus on restructuring neighborhood offices due to the City’s transition to a new form of government effective January 2025. In addition, although Civic Life received about $45,782 in grant administration fees from the Fund between 2020 and 2023, it said the fees do not fully cover the staff time needed to run the grant program.
Failure to award grants qualifies as inefficiency and waste
Inefficiency involves an inability to do something in a well-organized or competent way, and wasteinvolves mismanagement of City resources. According to the Hotline’s administrative rules, both inefficiency and waste must have an “identifiable and material effect,” meaning an important, measurable outcome.
We found that the City’s failure to re-start the grant program after the pandemic qualifies as inefficiency and waste. Race promoters have contributed to the Fund, but the City has not awarded grants from it, as required by City policy. This inefficiency and waste has had an identifiable and material effect on the North Portland neighborhoods that have been impacted by the Raceway but been denied the Fund’s intended benefits.
Recommendations
To carry out the purpose of the Portland International Raceway–North Portland Trust Fund and help ensure that the City is an effective steward of Fund contributions, we recommend that:
- The City award grants from the Fund, on an annual basis, for the benefit of North Portland neighborhoods impacted by Raceway events.
- Parks update the Fund policy, as needed, to help ensure that Fund and grant program responsibilities are carried out.
Response from Parks and Civic Life’s service area administrators
The Assistant City Administrator and Deputy City Administrator for Vibrant Communities jointly responded to the investigation with a statement agreeing with our recommendations. According to the response, Parks has assumed responsibility for grant administration and anticipates awarding the first round of grants later this year. The response also outlines plans for improving the grant administration process, evaluating safeguards to prevent future delays, and updating the Fund policy.
About Portland's Fraud Hotline
The Auditor’s Office administers the Fraud Hotline to enable the public and City employees to confidentially report suspected fraud, waste, inefficiency and abuse of position by or against the City. The Hotline also serves to identify and prevent losses of City funds and act as a deterrent to fraud, waste and abuse of position. Hotline tips can be submitted online at www.PortlandFraudHotline.com or by phone by calling 866-342-4148.
When the Auditor’s Office finds waste, inefficiency or abuse of position via the Hotline, it is required by law to notify the Portland City Council of the findings. This report, which is delivered to the City’s mayor and commissioners, serves as that notice. It is also released publicly to inform about substantiated Hotline tips.
Investigated by: Jennifer Amiott, Performance Auditor