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An independent auditor hired to investigate budget overages during construction of an employee building at the Columbia Boulevard Wastewater Treatment Plant found no evidence of illegal practices, according to Portland Commissioner Nick Fish.

鈥淚n response to the auditor’s report about the new Bureau of Environmental Services employee building at the Columbia Boulevard Wastewater Treatment Plant, I committed to bring in an outside law firm to review the findings, conduct an investigation, and issue a written report on lessons learned and 鈥榖est practices,’ 鈥� Fish wrote in an email. 鈥淚n its report, Barran Liebman LLP found no evidence that laws, rules or ethical guidelines were violated. However, the report raises a number of red flags about bureau practices and decisions.鈥�

The Bureau of Environmental Services recently completed design and construction of an office building that was supposed to cost $3.2 million. Instead, ratepayers forked over $11.5 million to complete the building.

Portland City Auditor LaVonne Griffin-Valade conducted an audit of the project and released in October 2014, stating that cost increases were due to the bureau expanding the project’s scope, making 鈥渄iscretionary design choices鈥� and failing to oversee the project during the design phase.

Fish’s office hired Barran Liebman‘s investigators to review the auditor’s report, investigate whether any laws, rules or guidelines were violated, and analyze project management decisions.

The firm’s report states: 鈥淲e found no evidence that funds were misappropriated, misdirected or mishandled (with the sole exception of the pass-through payment to the designer discussed in more detail below). We also found no evidence that caused us to question the motivations of the BES staff. While there is considerable legitimate debate about BES decisions and judgment calls and whether the right choices were made, we saw evidence that the BES staff tried to make the best choices for the city and the ratepayers and we were impressed with their skill level. Our review, however, identified practices and decisions that contributed to the controversy and which we believe should be evaluated by the city in its ongoing discussions about best practices in managing capital projects of this magnitude.鈥�

The 鈥減ass-through payment鈥� mentioned in the report was a transaction during the design phase in which the project’s general contractor, Skanska, paid the project’s design firm, Skylab, and was reimbursed from the construction budget.

鈥淲e did not find any evidence to suggest that the design work was not performed and we did not find any evidence to suggest that the design work was unnecessary,鈥� Barran Liebman investigators wrote in their report. 鈥淏ES had, however, incurred the expense without authority. Specifically it had permitted design work to proceed when the design budget was exhausted and ultimately arranged for payment from the construction budget by means of a pass-through.鈥�

Barran Liebman issued 11 recommendations the bureau should implement in order to prevent a situation like this from occurring again. Fish said he’s 鈥渁lready initiated a number of reforms that address many of the findings. They are designed to strengthen accountability and transparency.鈥�