PORTLAND, Ore. (KOIN) – A Multnomah County auditor investigation revealed that a contractor received over half a million dollars in unallowable costs from the Joint Office of Homeless Services.
Multnomah County auditor Jennifer McGuirk, said the Joint Office approved $525,228 in unallowable costs to All Good Northwest, a group contracted by the Joint Office for alternative shelter, like Safe Rest Villages.
The investigation, spurred by a Good Government Hotline tip, found that AGNW overbilled the county $331,553, mostly in personal expenses, by duplicating payroll expenses over separate invoices. Additionally, the report claims the county also approved $193,675 in unallowable indirect expenses, or administrative costs, after the office incorrectly told the group they could bill the county.
While the auditor said the money has been recouped, McGuirk adds that the new group was “essentially a county-funded start up” with little experience and should have been watched more closely.
“AGNW was essentially a county-funded start-up. It did not exist as an operational organization until the Joint Office contracted with it to operate alternative shelter programs. Because of this, it did not have any established funding or cash flow to support operations. It appears that AGNW’s overbilling errors stemmed, at least in part, from cash flow issues within the organization due to its 100% reliance on county funding,” the report said.
The auditor added “at the time of this report, all of AGNW’s funding has come from the county, which indicates that the Joint Office should have been more closely monitoring AGNW’s invoicing from the beginning. We identified that the Joint Office knew AGNW was new and was 100% reliant on county funding, but did not provide the level of fiscal monitoring/oversight that is essential in these circumstances.”
The report also provided recommendations for the Joint Office moving forward, including that the county should not give 100% funding to an organization, unless the organization goes through a risk assessment. It also recommend detailed monitoring of invoices by Joint Office staff.
In response to the report, the Joint Office said “the Joint Office of Homeless Services (JOHS) appreciates the work of the County Auditor in following up on the original hotline call and producing this report. We would also like to highlight that upon closing her review, the Auditor concluded that not a single dollar was ultimately lost.”
JOHS added “we are grateful to the Auditor’s Office for alerting us, and we are satisfied with the swift resolution of the issue — due in part to work that was already underway at JOHS to improve our contracting systems. Those improvements, which we have proactively pursued as a necessary step to transforming a small office into a large County department, helpfully align with many of the Auditor’s recommendations.”
JOHS interim director Shannon Singleton released the following statement to KOIN 6 News:
“I want to be clear that no taxpayer money was lost – a key finding in the report. I am grateful to the Auditor’s Office for alerting us, and I am grateful that we have such a solid team at the Joint Office that they were able to respond immediately.
“That response was possible and easier because the Joint Office had already been making substantial improvements in its administrative, fiscal and contract oversight practices, before this report was initiated. That proactive and important work helpfully dovetails with many of the Auditor’s recommendations.
“But we have to remember that as we are trying new things to end homelessness, and moving fast, sometimes, we are going to move too fast. And that’s exactly what happened here.
“I don’t fault our staff or the provider, who I know are all dedicated to serving our community and being good stewards of public resources.
“We learned and – as always – we continue to build more processes into our system to ensure that we are delivering as many services as possible to meet the crisis, while also being good stewards of public resources. It’s a hard balance to strike in the middle of multiple crises, but one we take very seriously.“