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May-06-2013 20:55printcomments

Oregon County's Use of Stimulus Funds Under IG Scrutiny

Officials with the inspector general’s office declined to comment directly on the story...

(PORTLAND, OR) - Subcontractors who worked for Multnomah County misused stimulus money on a picnic, bowling alley rental fees and other mortgage-related costs, says a report by the U.S. Office of Inspector General.

The money was supposed to help low-income residents.

The improper expenditures totaled $824 — most of which was in mortgage-related funds via rental assistance. The county has since recovered it from the subcontractors and paid it back to the federal government.

But much more money, which the county spent from federal Community Service Block Grant funds, is also in question.

Despite Multnomah County’s insistence the money was spent properly, the OIG has required further review of $115,087  by the Administration for Children and Families, which administered the grant money, to see if some or all of the money needs to be repaid.

Under the American Reinvestment and Recovery Act, Oregon received $8 million in 2009 and 2010. Multnomah County, the state’s largest and home to Portland, got about $1.3 million. The grants are used to fund services addressing employment, education, money-management skills, housing, nutrition and health to combat the causes of poverty, according to the U.S. Department of Health and Human Services.

The OIG reviewed $661,482 of the money received by Multnomah County and its two largest subcontractors for low-income services, Human Solutions Inc. and Impact Northwest Inc. What’s in question is whether the salaries and wages paid to the subcontractors’ employees matches actual time spent on the job.

According to the OIG report, Multnomah County did not have adequate monitoring procedures over its subcontractors, who based expenditures on budgeted salaries but did not account for actual time spent by employees after the fact.

The state found no findings or concerns in its report of the county’s handing of stimulus funds. The federal government saw it differently.

“We found, on the contrary, that the county, allowed its subcontractors to charge unallowable mortgage and loan interest expenses, unallowable food and entertainment-related costs, and other costs that did not have adequate supporting documentation and/or were calculated using budget estimates,” the report states.

Multnomah County, in its written response, argues the $115,087 does not need to be paid back and that it was spent properly. The county says officials have taken steps to better monitor subcontractors and the spending of federal dollars.

“We appreciate the diligence on the part of federal authorities who monitor how the ARRA dollars are spent. Multnomah County, like other local government agencies, understand the importance of the checks and balances needed to assure that federal, state and other money gets spent wisely on the vulnerable populations we all serve,” Multnomah County communications director David Austin said. “The ARRA audit speaks for itself and the county is quite comfortable with the recommendations and our followup to the concerns raised. As we do whenever we get federal funding, we have looked at ways moving forward to tighten and monitor our fiscal controls.”

The county also said the use of the stimulus funds helped 175 households where someone was unemployed gain employment during their enrollment in or shortly after their exit from services, in an average of 10 months.

The county also conducted its own audit of seven other subcontractors,which the OIG did not review, and found $421 was spent improperly. That was recovered and paid back as well. As of July, the county also has required all subcontractors to improve time tracking records.

Officials with the inspector general’s office declined to comment directly on the story, deferring to the report.

Special thanks to NW Watchdog


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