Oregon’s largest county budgeted over $1.2 billion for contractors in 2023 to operate homeless shelters, addiction treatment programs, behavioral health services and more, but departments didn’t go far enough to monitor the entities doing that work and regularly paid them late, a new report shows. The lack of oversight has burned Multnomah County in the past.

The 48-page audit published Thursday — sparked by what county officials characterized as a half-million dollar overpayment to a shelter provider in 2022 due to “ineffective contract monitoring” — found that the county’s lackluster contract and invoice tracking could be costly.

“We have found that, time and time again, departments need to improve the monitoring of the activities by contracted providers,” county Auditor Jennifer McGuirk told The Oregonian/OregonLive.

Thursday’s report looked at over 50 contracts from the joint office as well as the human services, health and community justice departments. The audit showed that each county branch had at least some standards to make sure the organizations they hired were doing their jobs, but that methods varied by department and individual division. That disjointed practice can make it difficult to keep contractors accountable, the report said.

The county’s human services contract policy, penned in 2011, outlines specific requirements for assessments, invoice tracking, monitoring and reporting on services, but the auditor’s report said the policy was outdated and not followed by every department.

The joint office has shown improvement since the 2022 dispute, when the office made what the auditor called “unallowable payments” to the tune of $525,000 to shelter services provider All Good Northwest. A representative for the nonprofit said the joint office had granted the money to keep the shelter services afloat, and that the funds have been “rectified and settled.”

The joint office also was the most consistent with performance reviews, on-site monitoring and risk assessments for their contractors, the report said. The youth and family division of the county’s human services department also had strong oversight.

On the other hand, the community justice department had the weakest accountability tracking and limited monitoring of its contractors, according to the audit. The department, which has a budget of over $120 million for the next fiscal year, started work on a new contract review process during the audit, the report said.

The auditor’s office also reviewed a sample of 232 invoices from the four departments from July 1, 2022 to June 30, 2023. The joint office paid 68% of their contractors’ invoices on time — the highest among the departments tested. The health and community justice departments paid only 50% of the sampled invoices on time.

Some of the late payments were due to problems on the contractors’ side, the report added. The auditor’s office found that 31 payments were made “very late” across the four departments, with around 23 of those coming down to issues within the county’s control.

The report recommended that officials standardize their contract monitoring policy countywide and ensure each department is compliant with that new policy. The auditor’s office also said that the county should better track its invoice due dates, create a better system to monitor department contract repayments and develop training for county employees on financial policies and standards — all to be done by June 30, 2025.

Multnomah County officials started their work to redesign and standardize their contracting practices earlier this year, the report said.

In a response to the audit, Chair Jessica Vega Pederson said she had no disagreements with the recommendations and promised to set better standards for the future. The county hired two new employees focused on contract improvement earlier this year, she wrote.

“Though contract monitoring occurs at the department level, the County has yet to implement a

strategic, risk-based, and consistent countywide approach to contract monitoring,” Vega Pederson wrote. “To ensure that the County effectively addresses this area of need, new resources have been added to plan, develop, and implement standardized contract administration processes countywide.”

— Austin De Dios covers Multnomah County politics, programs and more. Reach him at 503-319-9744, adedios@oregonian.com or @AustinDeDios.

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