Vendors say state commission's failures hurt their businesses
by: CHRISTOPHER ONSTOTT Art Stevenson, president of the National Federation of the Blind of Oregon, stocks a vending machine at the Multnomah County Courthouse. He is one of 17 blind business managers in Oregon with jobs providing food and beverage service in government buildings, a right granted by longstanding federal and state laws.

Besieged Oregon Commission for the Blind leaders vow to improve their management practices after another blistering state audit - the fifth since 1995 - accused the Portland-based agency of sloppy money management and misleading state lawmakers.

In a four-hour meeting Friday, the commission's seven-member board, packed with four newcomers chosen by Gov. John Kitzhaber, said it would take the audit seriously and try to turn it into a model agency.

But several board members also downplayed the audit findings, raising questions about their resolve to change the culture of an agency charged with aiding Oregon's 19,000 blind people.

Commission Administrator Linda Mock and board Chairwoman Jodi Roth issued separate written responses to the Oct. 5 audit that were largely defensive.

Meanwhile, activists with the agency's Business Enterprise Program, who have been at odds with the commission for years, are calling for heads to roll.

The new board should have held an executive session to review Mock's performance, given the history of negative audits, said Art Stevenson, president of the National Federation of the Blind of Oregon, and a manager in the Business Enterprise Program.

'I do not feel that she should be the administrator of the Oregon Commission for the Blind,' Stevenson said.

In an interview Monday, Mock said she intends to remain at the helm of the agency. She stressed that her primary concern remains job training, rehabilitation services and counseling to some 1,500 blind people who are clients of the agency. However, she added, 'we realize that the business practices of the agency need to support that.'

Many of the controversies revolve around the Business Enterprise Program, which stems from a federal law giving blind people a monopoly on vending machines and other food service in public buildings. The program employs 17 blind people.

Not tracking the money

The new audit, similar to others in 1995, 2000, 2001 and 2009, found a pattern of poor accounting and inept recordkeeping at the agency Mock has run for more than a decade. The Commission for the Blind, which spends $7.8 million in federal and state money each year, didn't have copies of contracts, didn't track income of the blind vending machine businesses, and had weak controls on spending and discrepancies in financial records. These were among a host of problems uncovered by six state auditors.

Agency leaders have failed to perform tasks that are 'fundamental expectations of any manager' in the state, said Gary Blackmer, Audits Division director under Secretary of State Kate Brown.

After a scathing 2009 audit, the agency was required to report how it rectified the problems to a legislative committee in January 2010. Auditors concluded that the agency falsely claimed to have resolved many of its problems.

'We found something different from what they told the Legislature,' Blackmer says.

In the follow-up audit, the agency was asked to produce signed contracts with outside food and beverage companies that service state buildings. Some of those contracts were only signed that morning, and not by both parties.

Walt Reyes, manager of the agency's Blind Enterprise Program, was placed on paid administrative leave in August due to irregularities uncovered during the audit. He is still on leave.

Tracking money from vending machines operated by blind businessmen was hard to do because accounting records were incomplete and inconsistent, said Jamie Ralls, principle auditor for the state. That's especially important because those machines operate on a cash basis, she said. Auditors also couldn't track the 11 percent cut that blind business managers are supposed to give to the agency, Ralls said.

'If they were doing their job, they could track all this information,' she said. 'They could spot when something doesn't seem right.'

Weak board?

Some observers say past boards overseeing the agency have been rather passive. Members relied on Mock and her predecessor - who resigned under pressure after a negative audit in 1999 - to produce board agendas and spoon-feed them financial reports.

'The board has in the past liked it that way,' said Kae Seth, a past board member and current president of the American Council of the Blind of Oregon.

Board meetings are only conducted every two months for two hours, giving members 12 hours a year to monitor the agency.

'Basically, the board meetings are like a dog and pony show,' said Randy Hauth, a representative of the 17 blind business managers.

At Friday's board meeting, when Mock and her fiscal officer, Leslie Jones, presented a proposal for meeting a potential 10.5 percent budget cut that may be required by the Legislature, board member Richard Phay asked why the board didn't get individual department budgets in the agency.

'Honestly, we've just provided a summary because it's much easier to grasp,' Jones said.

The full agency budget would have been too long to submit to the board, she said - 10 pages.

At the meeting, some members defended the agency's management and were publicly dismissive of the audit findings.

'This audit looks like a witch hunt to me,' said Dr. John Wilkins, an ophthalmologist. 'I think this is an incredible waste of taxpayers' money.'

Later, he said, 'We're not accountants. That's not the primary goal of our mission.'

Mock complained that the agency had requested a 'quality assurance' staffer to resolve the financial problems highlighted in past audits, but said state budget writers denied the extra position. Roth, the board chairwoman, reiterated that complaint in her written response to the audit.

However, Ralls said there was a half-time person hired with federal stimulus funds to serve as a quality assurance officer during the 2009-11 budget cycle, which ended in June. Roth said she wasn't aware of that position.

New board member Carla McQuillan said agency leaders should stop arguing that the state is 'picking on us' and improve their business management.

'Things have just been very sloppy,' McQuillan said.

Roth appears to have softened her stance after speaking with state auditors and Secretary of State Brown.

In an interview Tuesday, the board chairwoman said she would like to see 'global changes' in how the agency is managed and how the board functions.

'I think that our role is going to be vastly different in the next months to come,' she said.

Clashes with blind managers

The board and Mock also face an ongoing state of rebellion by the blind business managers, who make a living running vending machines, coffee carts and other food services in state, county and city buildings.

The blind managers argue the Commission for the Blind doesn't aggressively enforce the federal Randolph-Sheppard Act, enacted in 1936, and the companion state law, resulting in lost opportunities for blind people to gain business in public buildings.

Nationally, those programs provide 2,500 jobs to blind people, Stevenson said. But in Oregon, the agency has neglected the program, not even offering training for the managers, he said.

'There has been a mindset in the Oregon Commission for the Blind not to expand the program,' or to use it as a 'dumping ground' to place clients when they can't find any other jobs for them, Stevenson said.

Auditors found the agency has paid $416,000 in legal bills since 2007 just to respond to claims filed by the blind managers. In most cases. those were claims, authorized by federal law, to prod the state to court more contracts for the program. The managers fought to get control of food concessions in state prisons, in the U.S. Post Office in Northwest Portland, and in the SAIF headquarters in Salem, among other public facilities.

Seth said Stevenson has a conflict of interest as a blind businessman and president of the other major advocacy group, the National Federation of the Blind of Oregon. However, she said there had been poor communication between the blind business managers and the agency for years.

'It's like two children fighting each other; you just want to knock them in the head,' Seth said.

Mock often notes that the Business Enterprise Program involves about 1 percent of the clients served by her agency. She said that program, created in 1936, relies on an 'outmoded model' of rehabilitation for blind people that is very 'paternalistic,' and leads to ongoing friction in the state agency.

The blind business owners have a more expansive view of their legal rights to state and local government buildings than state attorneys do, Mock said.

In one sign of the dysfunction within the agency and that program, Stevenson is one of the business owners who is not operating with a signed contract. Stevenson refused to sign one, he said, because he didn't think it granted him due process rights if he was terminated.

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