Oregon Cities

Audit finds internal flaws in Portland-area homeless service agency

Poor men in tent

Seven years ago, the city of Portland and Multnomah County teamed up to create a new agency focused on the region’s homelessness crisis. Now, with record rates of homelessness and historic levels of funding available to address homelessness, the spotlight is on the Joint Office of Homeless Services.

Yet, a peek behind the scenes of the joint office reveals how clunky contract management, poor communication, insufficient data collection, and lack of vision have undermined the program’s effectiveness at solving one of the region’s most entrenched challenges.

A report by the county auditor’s office released Wednesday illustrates how the joint office’s systemic problems have the largest impact on the nonprofit employees with whom the joint office contracts to provide services to people experiencing homelessness.

“The public needs to know what service providers have experienced as they’ve been trying to help people exit homelessness,” said Multnomah County Auditor Jennifer McGuirk, who oversaw the audit. “If you’re a provider and you have this additional stress of not knowing if you’re going to be paid, it impacts your ability to provide service to people who are in serious crisis.”

FILE - A man sits outside his camp in Southwest Portland, Ore., Sept. 30, 2021.

FILE – A man sits outside his camp in Southwest Portland, Ore., Sept. 30, 2021.

Kristyna Wentz-Graff / OPB

The audit comes as both local politicians and members of the public have aired doubts about the joint office’s work. And it comes as the office has failed to spend tens of millions of dollars approved by voters to address the crisis by helping transition people experiencing homelessness into permanent housing.

While a plan to fix that underspending is underway, the delay sparked a public outcry and a call to reevaluate the joint office’ effectiveness.

This issue, along with other budgeting concerns, led Portland politicians to threaten severing its contract with the county to oversee the joint office. City Council members have since agreed to meet with county leaders to reevaluate the relationship in December.

The joint office’s programs rely heavily on contracts with outside nonprofits that already provide homeless services — like transitional housing, mental health care or job training. County officials say one of the main reasons the joint office can’t get tax dollars out the door is these nonprofit contractors’ inability to hire and retain workers to carry out the joint office programs. A recent study conducted by the joint office found that nearly half of all service providers surveyed were earning less than a living wage.

Nonprofits say their ability to pay fair wages and hire staff is hampered by the joint office’s complex and costly contracting process.

Related: Low wages and staff shortages plague rollout of Portland-area supportive housing tax dollars

This accusation is underscored in the county’s audit, which includes anonymous feedback from nearly 70 people who work as contractors with the joint office.

Auditors spoke with nonprofit staff who were asked to do work without a signed contract — meaning they often weren’t paid for months after the work began.

“One agency we spoke with had to take out a line of credit and pay interest while they waited for reimbursement from the joint office,” the audit reads. “Delay in payments creates a hardship on service providers’ cashflow, ultimately putting the populations they serve at risk.”

This financial pressure could limit some organizations from offering competitive wages, expanding their staff and reducing employee burnout, said Mandi Hood, a managing auditor at the county who co-authored the joint office report.

“There are amazing people in our community who provide services to people who are experiencing houselessness,” Hood said.

She said it’s important those workers are able to do their jobs without facing immediate burnout and where “there are policies and procedures in place that support resiliency for them.”

The audit also highlighted contractors’ frustration with the joint office’s inconsistent communication. Several noted how joint office staff often gave them different answers to similar questions. Others expressed frustration with the lack of coordination between joint office programs. Few felt like they understood what the joint office was trying to achieve.

In a survey distributed to contractors by the auditors, less than half said they believe the joint office was successful at communicating its policies and goals.

The audit points to recent staffing fluctuations as a key issue affecting the office. The joint office ballooned in staffing size since 2019, when it had 21 full-time employees. Now, the office employs 99 people. It has also experienced incredibly high staff turnover rates, which adds to communication problems between the joint office and contractors. The office has also seen four different directors since 2021. After the joint office’s first director stepped down in March 2022, the department saw two interim directors before hiring its current director, Dan Field, in April 2023.

Auditors heard from many joint office staff members that their work felt disorganized and directionless without a permanent director during a massive staff increase. McGuirk said the joint office’s clear weaknesses — contracting, communication, and other internal systems — should have been addressed years ago.

“It’s a disservice to providers and joint office employees to not have those systems in place before expanding and going through big leadership transitions,” she said.

Related: Oregon has a huge housing shortage. Here’s what could be done

This isn’t the first time McGuirk has overseen an audit of the joint office. In 2021, her office intended to measure the effectiveness of the joint office based on how many people the office had moved into housing. But McGuirk discovered that the joint office was only tracking how many people entered a housing program — not people who had moved into housing. McGuirk suggested that the joint office may be falsely inflating the number of people it claims to place in housing, and she halted work on the audit until the program started collecting more reliable data.

McGuirk directed her staff to take another look at this data in early 2022. While they were able to collect qualitative data from staff and contractors, the team was again stalled by data problems. This time, the issue was not knowing where the data on housing placement was stored. The joint office told auditors that the city of Portland was in charge of this data, while the city said it was in the joint office’s control. This back-and-forth has yet to be resolved — although the joint office recently informed the auditors that they do, in fact, have the data. Auditors will analyze those numbers in a separate audit.

Auditor Nicole Dewees explained why this data is critical to understanding the joint office’s work.

“It would be great to see if we could see what what were a series of services someone received that got them housed and they stayed housed,” she said. “Data really has the powerful ability to, to tell us what works — and what doesn’t.”

The audit makes several recommendations to the joint office leadership based on its findings. It urged the office to keep in more frequent communication with its contractors, improve its payment process to avoid delays, and clearly outline the program’s goals.

In response to the audit, joint office director Field and Multnomah County Chair Jessica Vega Pederson — who oversees the joint office — didn’t challenge the report’s findings. They seconded the belief that many of these problems came about due to frequent leadership turnover and wrote that many of the recommendations identified were already being implemented. Field plans to have more internal meetings and send frequent updates to contractors to illustrate his commitment to transparency. And changes to the joint office’s finance department has ensured that, for now, 80% of all contractor invoices are paid on time.

McGuirk said it’s positive that county leaders agreed with most recommendations. “That, to me, says they’re willing to acknowledge that there have been problems and that they’re open to fixing them,” she said in an interview.

McGuirk’s office plans to follow up with the joint office again in 2024.

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