System for awarding money to contractors calls for intervention

A new city audit finds problems with conflicting roles when distributing money to outside contractors.

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A new city audit found problems with the city of Portland’s process for distributing about $600 million annually to outside contractors.

The report indicated the city’s system creates confusion for taxpayers. The city blasted Auditor Mary Hull Caballero’s report.

City procurement officials blasted the audit in an uncharacteristically pointed response. Fred Miller, the city’s chief administrative officer, wrote that auditors disregarded their feedback and citizens who read the report might reach conclusions that are “misleading or incorrect.” Auditors say Portland’s procurement division doesn’t monitor the overall level of competition among city contracts or analyze data to spot trends or problems. Procurement officials also operate under a system of competing priorities – such as promoting social equity instead of competition, which could reduce opportunities to cut costs.

Auditors say they couldn’t make more sweeping conclusions about the effectiveness of contracting because the city’s database is poorly maintained, prohibiting meaningful analysis. Among other things, the City Council should clarify objectives and set top priorities for how officials award contracts, according to the report.


The report criticized lack of clearly identified roles in the acquisition department.

“The procurement process needs City Council’s attention. Portland procures about $600 million each year in goods and services through a variety of methods. The Chief Procurement Officer acts under your delegated authority and would benefit from clarity about your priorities when wielding the City’s considerable purchasing power. This is especially true when purchasing objectives are in conflict, such as when contracts are awarded non-competitively to emerging small businesses without an affirmative action purpose,” reads a June 24 cover letter signed by City Auditor Mary Hull Caballero.

The audit included 15 recommendations to reform the purchasing system, beginning with the council clarifying its objectives. The Office of Management and Finance responded to the audit with an unusually critical letter, saying auditors ignored information it offered the public should know when evaluating it. Although the letter from Chief Administrative Office Fred Miller agreed with some of the audit’s recommendations, it said others were all but meaningless.

(SOURCE: Portland Tribune)

Miller did express appreciation for some of the audit’s findings: “We are gratified that Audit Services found no instances of mismanagement or fraud and the audit only references situations that ‘may’ or ‘could’ result in risks or oversight gaps.