Marcus Mundy, former executive director of the Urban League of Portland

The Urban League of Portland has taken two painful blows in the last month. First came the sudden death of Rob Ingram, inspirational leader of the Urban League's Young Professionals. Now, the league has lost its president, Marcus Mundy, after a succession of audits found $44,000 in undocumented expenses.

What's next? Multnomah County has threatened to withdraw funding if the league doesn't demonstrate tightened financial control of its funds. The Department of Justice has opened an investigation into the league's fiscal management. And questions have been raised about $320,000 in City of Portland funding that supports job training and other workforce development activities.

"What they have to show is that they have fiscal controls in place and the money spent was in support of the Urban League's mission," said Dave Austin, communications specialist with the county. "If we don't see that controls are in place the funding is in jeopardy."

Austin said the county has granted the league a total of $729,000, or roughly $250,000 a year. The majority of the money supports the Urban League's senior services.  Some other contracts support health work the league has undertaken. That money is not paid to the league until after the work has been done, Austin said.

"We have a long relationship with the Urban League and we would like to see them succeed," he said.

The Urban League has a 66-year history of advocating for Portland's African American and minority communities. With Mundy at the helm, the league has arguably been more influential than at any time in its past.

In 2008, it produced the State of Black Oregon report, which sounded an alarm about deep poverty in Portland's African American community. Partnering with other communities of color and Portland State University, the league has pushed for research to expose how racial disparities are hurting African American families and children. The league has pushed state legislators to change laws and policies for the benefit of communities of color and low-income people. And it launched an urban gardening program with the African Women's Coalition.

However, both the county auditor and an independent audit by the accounting firm Gary McGee & Co. have found that Mundy's credit card expenditures were not backed up by receipts, leaving no evidence showing the money was spent on legitimate programs. About $44,000 out of the league's total budget of more than $1 million, has not been properly accounted for, according to those audits.

Lolenzo Poe, board chair of the league, says the league is working to satisfy the auditing requirements.

"We are working to assure the county that we have in place an adequate level of accountability that ensures the funds are being spent appropriately," he said. "We believe the systems and the necessary oversight are in place. And we are hopeful that the county will see that those controls and systems are in place."

Poe said nobody has suggested that the programs supported by the grant money are not properly funded and doing a good job. More than 800 seniors receive services through the league, which runs a multicultural day center, offers support to family caregivers and helps seniors stay in their homes. The league also runs a transportation center that helps more than 780 seniors a month get to medical appointments, go shopping and make other trips.

"We want the outstanding work that goes into this community and these necessary and important services to continue, that we all know are so much needed in North and Northeast Portland," Poe said.

Reporting by Willamette Week's Nigel Jacquiss said auditors first questioned the league's finances in 2009, but the problems were never resolved. And promised financial controls were not in place in 2010. Those stories also report that Mundy, whose salary at the League is $91,000 a year, has faced financial losses over real-estate investments after the housing market crash.

Charles Wilhoite, a certified public accountant, and a managing director with the financial services firm Willamette Management Associates, also serves on the Urban League's board. Wilhoite says that while the accounts were mixed up, it was because of mistakes, not malfeasance. The wrong receipts were sent to the auditors, he said, but Mundy did not use the league's credit card for his personal expenses.

"Marcus was not doing anything underhand as regards the funds, or his use of the League credit card," Wilhoite says. "We will take every step we can to get clear on the expenditures that went through."

A hair salon receipt, for example, widely reported as charged to the Urban League's credit card, for example, should never have been sent to the auditors because it was not charged to the league's credit card.

"His personal expenses always went on his personal account and never went through the league charge card. I wouldn't want anyone to think he wasn't being responsible with league funds, because that's not the case."

Wilhoite said the board has been working to clear up the confusion over the expenses, and will deliver a full accounting to the county by the end of this week. He says the discrepancies have above-board explanations.

"Clearly we want to be as transparent and responsible as we can with public funding," he said. "From my perspective it's a matter of making sure we are consistently following our own controls."

Kayse Jama, executive director of the Center for Intercultural organizing, issued a statement Monday in support of the Urban League.

"Over the past 5 years, CIO and the Urban League have collaborated on a diverse array of projects which have highlighted their enormous positive impact for our state's African-American community, immigrants & refugees, and communities of color more broadly," Jama says. "It would be hard to identify an organization of advocates and community leaders that is more tenacious, more passionate, and more effective in their work.

 "Since 2007, we have worked together to ensure that the many efforts toward health care reform in Oregon have been inclusive, equitable, and culturally competent. As partners in the city's Diversity and Civic Leadership program, CIO and the Urban League have worked together to train hundreds of grassroots leaders, and then mobilize those leaders as advocates and organizers within their communities. Most recently, we worked within a diverse coalition to create an Office of Equity and Humans Rights in the City of Portland. In every one of these efforts, the dedication and community-focused nature of the Urban League has shone through.

 "As an advocate for communities of color, the Urban League of Portland has embodied social justice values. CIO stands with the Urban League, and we look forward to the many collaborations to come, in the effort to make Oregon an inclusive place for all."

The board has appointed Quentin Strode, former U.S. Bank executive, as interim president and is starting the search for a new leader.  Strode said he expects his appointment to last a couple of weeks at most, since he is in the midst of moving to San Diego. 

"I do think there is great work being done here," he said. "It is unfortunate that some common sense things just were not followed."