PORTLAND, Ore. (AP) — A city audit has found that Portland failed to create a fair and transparent grant selection process, interpreted eligibility criteria loosely and didn’t protect against misuse of funds in their haste to get pandemic relief money to small businesses.
The audit released Wednesday evaluated the success of Prosper Portland’s Small Business Relief Fund, The Oregonian/OregonLive reported.
The fund provided $12.4 million in city and federal dollars to 1,209 small businesses during two rounds of funding last year. The money supported about 9% of the nearly 13,000 businesses that applied for relief.
The city’s economic development agency was supposed to prioritize businesses owned by women and people of color who were disproportionately impacted by the pandemic.
The audit found that race was given priority, but women were not prioritized. The audit also found that Prosper Portland, however, did not document how it weighed various factors or why specific businesses received grants over others.
The agency also gave $223,000 to 21 businesses that conduct business in Portland but are based outside the city, despite eligibility rules that required businesses be based there, according to the audit.
“Demand was so high that Prosper staff did not evaluate eligibility before it awarded grants and was reluctant to remove an award if it determined the grantee was ineligible,” the audit said.
Prosper Portland also failed to put together an adequate system to assess how businesses made use of the grants, according to the audit.
Prosper Portland executive director Kimberly Branam and Mayor Ted Wheeler defended the grant process in a letter. They said the agency used a holistic assessment to review applicants and opted not to disqualify applicants due to technical reasons.
They did acknowledge the agency could learn from the rollout of the grant program to better respond to future economic emergencies.