SALEM — While Oregon has handed out an estimated $261 million in grants for drug treatment and recovery services under Measure 110, much of the money has yet to reach the people who need it, according to a new Oregon Secretary of State audit of the drug decriminalization law.

Service providers spent $95 million between July 2022 and June of this year, representing about one-third of what the state had handed out in grants, the audit found.

Treatment networks set up in each county under the law have increased their spending over time “but the first year of reporting showed limited spending and services amid difficulty hiring staff and other challenges, raising risks that some of Oregon’s 42 networks may not provide all required services,” the auditors said.

The audit found that networks in a dozen Oregon counties failed to provide Measure 110 services during a three-month period last spring. Another five counties served fewer than 15 people during the same period, auditors found.

The two networks of treatment and service providers in Gilliam County, for instance, “reported no clients served, noting hiring challenges and low patient awareness of services,” according to the audit.

The law funds a range of services, including harm reduction such as naloxone distribution and fentanyl test strips, as well as housing, treatment and peer support.

The latest audit is the second one the Secretary of State’s Office has performed on the controversial voter-approved law, which passed in 2020. Measure 110 decriminalized minor drug possession and redirected cannabis tax revenue to a host of services to help people experiencing drug addiction. An audit earlier this year found setbacks and delays hindered the rollout of the law.

The Legislature requested the review, asking auditors to answer questions centered around Measure 110 grants, in particular whether the money went to “culturally specific and linguistically responsive organizations” and to identify “barriers that exist for Black, Indigenous, and people of color grant applicants.”

Secretary of State LaVonne Griffin-Valade said the auditors’ findings are intended to help the Oregon Health Authority “put the right structures in place to administer the treatment side of Measure 110.”

“There has been a lot of interest around Measure 110, and I have no doubt that many will want to look to this audit as a measuring stick for the law,” she said in a statement that accompanied the audit’s release. “That would be a mistake, as this report is narrowly focused on answering questions about the OHA’s grant making program.”

Increased backlash

The law has faced an increasing public and political backlash as fentanyl overdose deaths have skyrocketed in Oregon and open drug use has proliferated, particularly in downtown Portland. Lawmakers are preparing policy proposals for the 2024 session intended to address criticism of the law, including a possible ban on public drug use.

The audit offers a critical look at the state’s implementation of the first-in-the-nation policy. Auditors flagged significant problems with data collection and general oversight by the state.

They also scrutinized big-ticket expenditures, finding that the Oregon Health Authority spent $1.7 million on a contract with Lines for Life to staff a 24-hour hotline that drew so few calls the contract amounted to $7,000 per call.

The Secretary of State made multiple recommendations to the oversight and management of Measure 110, including a suggestion that the Oregon Health Authority present a strategic plan to the Legislature in 2024, doing a better job of tracking staffing, capital projects, youth services and virtual services, as well as the availability of culturally specific services. Auditors said the agency should improve the grant application process and identify the “most critical service gaps” in local communities and the “barriers to increasing services.”

The audit also says the state should require service providers “to clearly detail what they plan to do” with Measure 110 grants.

Measure 110 spending was a key focus for auditors.

They analyzed about $31 million in spending between April and June, the latest quarter available, examining how many people received seven types of services, including peer support, comprehensive assessments, treatment, housing and harm reduction.

With about $11 million, peer support represented the greatest share of grant money spent, auditors found. Data shows 1,447 people received those services, amounting to $759 per person, according to the audit. Peers who are in recovery themselves help connect people with basic needs, such as housing and medical care.

Providers spent about $7.42 million on housing services for 2,840 people, totaling $2,613 each, the audit found. Those services include rental assistance, staffing costs, housing construction and expansion, as well as spending on motel stays.

Auditors noted that the per-person costs are likely higher at this stage because of construction and administrative costs.

Auditors said spending “started off slowly” partly because of delays by the state in issuing grants. Some providers were still using state money they had previously received to pay for services. Providers also needed to make major capital investments in property and construction, contributing to the lag in spending.

“In general, expanding services or starting new services takes time to scale up and awareness of new programs takes time to build,” the auditors said. “In M110′s case in particular, some providers said uncertainty about funding also delayed hiring.”

Lack of data collection

Providers told auditors other factors play a role as well. They cited low wages and hiring struggles as a “persistent problem,” the growing political debate over decriminalization that has clouded the law’s future, high housing costs and social stigma that can “stall services.”

Providers also pointed to the anemic use of the Measure 110 hotline, which was intended to screen people for services and route them to help, and reduced referrals from drug courts, which have been scaled back as a result of the law.

Auditors sounded the alarm on the Oregon Health Authority’s lack of detailed data collection, impairing the state’s ability to gauge the effectiveness not only of Measure 110 but of the state’s behavioral health system.

The public health agency’s “ability to respond to the Legislature’s requests for trend data, such as changes in individuals accessing treatment since 2020, before M110 passed, appears uncertain in most cases,” auditors noted.

Auditors said the agency plans to improve data collection, but it remains unclear whether the information will be available in time for the next audit of the program, due by the end of 2025 — more than two years after the first grants were approved and five years after voters passed the measure.

The report also calls out a failure by the state to track or evaluate services focused on youths even though, as auditors noted, “most substance use disorders begin before age 25.”

Just 36 of the 230 organizations and programs receiving Measure 110 grants offer youth services or services for parents. Twenty counties “do not have providers focused on youth or parents in their networks.”

Data from April to June showed just 16% of clients whose ages were known to the providers were younger than 26, auditors found.

Likewise, the state fails to track virtual and mobile outreach.

Auditors found one provider was approved by the Oversight and Accountability Council, the state panel charged with approving grants, to work in eight mostly rural counties. Yet the council rejected the same provider’s application to work in 28 counties, including five of the state’s most isolated areas, the audit found.

Auditors pointed to a 2021 report by the federal government that found virtual services “have increased engagement in opioid use disorder treatment, can reduce stigma in accessing services, and can be particularly valuable for reaching rural populations in areas with workforce shortages.”

The audit also pointed out the Oregon Health Authority’s limited oversight of spending by providers receiving Measure 110 grants. The agency, for instance, failed to evaluate whether providers had the capacity to manage and account for funds, which auditors called “a particular risk for start-up organizations and small nonprofit providers receiving large amounts of funding.”

The agency hired five grant managers to oversee more than 230 grants, a volume that limited their “ability to support grantees, verify spending reports, or provide more robust monitoring, such as spot checks of invoices, payroll registers, and other operations spending documentation,” according to the audit.

‘Better tracking’

The audit also found significant gaps in services by race and ethnicity, with 25 counties failing to offer culturally specific services. The review found similar gaps in services for LGBTQ+ people.

The Oregon Health Authority doesn’t track services for veterans and people with disabilities, auditors said.

“Better tracking of these services is important,” the audit noted. Measure 110 legislation emphasizes the “provision of culturally specific services several times, and these services can improve outcomes.”

Auditor recommended improved clarity and transparency around the grant application process. They suggested that the council make clear to applicants how many grant dollars have been allocated for their county.

“We saw cases of applicants asking for far more than the dollars available, making their applications less realistic and effective,” the audit says.

Two people reviewed each application, though auditors identified inconsistency regarding the depth of these reviews. While most gave clear recommendations, others “simply wrote ‘yes’ or ‘no’ without additional information for the committee to consider.

“We also found reviewers citing reasons for denials not cited by other reviewers reviewing similar applications,” the audit says. “The lack of public discussion and at times sparse and inconsistent application reviews stemmed in part from the volume of applications, vague or confusing applications, and the pressure to review applications quickly given delays” in getting funding into communities.