More than one-third of the 30 people who stayed the longest at two city-run homeless shelters each had at least $20,000 in bank accounts, according to a state audit of Portland’s General Assistance program.

Among those 13 people, the person who had stayed at city shelters the longest had nearly $92,500 in his accounts, while another was reported to have as much as $161,000 in liquid assets, the state says.

Portland General Assistance audit

The state provides General Assistance reimbursements to cities for eligible people staying at homeless shelters. The audit done by Department of Health and Human Services examiners concluded that the city “is in violation of a number of statutory and regulatory requirements, including but not limited to improper eligibility determination and reimbursement practices with respect to the operation of Portland’s Oxford Street Shelter and Family Shelter.”

Portland contends that it is operating its homeless shelters in accordance with state law, and that until last year, audits during the past 20 years had raised no issues with its practice of assuming that someone who stays at a shelter is eligible for General Assistance.

Since 1989, the city has been providing GA to people who stay at a homeless shelter without having them fill out a form to determine financial eligibility. Because of the large number of people who stay at Portland’s shelters, the state lets the city use an abbreviated form for receiving reimbursements for shelter residents.

Portland Mayor Michael Brennan said at a City Council workshop Monday that he has spoken with Gov. Paul LePage and is planning to meet with him and other state staff to discuss issues raised by the audit. The council will discuss the issue again next Monday.

“I am confident at this point – as I am sitting here tonight – that the city of Portland has run its GA program in accordance with state statute and state law,” Brennan said.

General Assistance is a state-mandated emergency resource for people who need help paying for rent, food and utilities. Most municipalities are reimbursed 50 percent of the costs from the state, but cities like Portland and Lewiston receive a reimbursement of 90 percent once they reach a certain spending threshold.

Portland’s General Assistance program has ballooned, increasing from $5.6 million in 2009 to more than $10 million last year, while GA spending in other communities has dropped.

The audit report delivered to the city Friday afternoon adds more details to problems uncovered during an audit last April, when the state raised concerns about the city’s policy of presuming someone who stays at the shelter is eligible for GA. Auditors also flagged the city’s practice of requesting reimbursement for operational costs at the shelter.

The city has disputed those findings as well.

LePage has made welfare reform a key goal on both the campaign trail and during his terms in office. Last summer he instituted a policy against providing General Assistance to “undocumented immigrants,” a term that draws the ire of immigration advocates because it includes asylum seekers who are lawfully present in the United States until their cases are adjudicated in immigration court.

Mary Mayhew, commissioner of the Department of Health and Human Services, which oversees the state’s General Assistance program, said in a written statement Monday night that the governor is trying to institute reforms to ensure fairness across all municipalities, encourage effective financial management and stabilize the program so it can be available to severely disabled Mainers.

“While this review represents our initial findings and is subject to change before a final report is issued, it raises a number of serious concerns with the city of Portland’s compliance with the eligibility requirements of Maine’s General Assistance welfare program and could explain Portland’s outlier-status spending patterns,” Mayhew said.

Attorney General Janet Mills has said the policy change regarding immigrants is unconstitutional and that the LePage administration did not follow proper rulemaking procedures. The Maine Municipal Association, a nonprofit advocacy group for local governments, is seeking clarity from the courts. Portland and Westbrook have signed on to the lawsuit.

The administration has been withholding all GA reimbursements to communities that are not complying with the new rule. But the audit released Friday suggests the state will only withhold reimbursements to undocumented, or “nonqualified,” immigrants.

“Pending resolution of that lawsuit, DHHS will not be paying reimbursement of claims paid to such ‘non-qualified’ aliens, but DHHS will not be assessing any civil penalties or imposing any broader withholding remedy for the city of Portland’s failure to correct its noncompliance,” the report states.

Auditors spent Jan. 20-21 reviewing Portland’s GA records for 90 cases, the minimum required given Portland’s caseload, the audit report said. In addition to reviewing the city’s financial eligibility database, paper forms and other supplemental information, auditors returned on Jan. 28 and 29 to review claims paid to “qualified” or “non-qualified” immigrants.

The state reviewed case files for the “Top 30 Stayers” in the city’s Oxford Street and Family shelters based on bed nights, the report said. At least 13 were determined to have more than $20,000 in savings and checking accounts. One person who had stayed the most bed nights had more than $92,000 in his accounts, while another was reported to have as much as $161,350 in liquid assets.

The report also states that the city employed “representative payees” for people receiving Social Security and disability insurance. “At least 60 of those individuals stayed at least one night at the Oxford Street Shelter in 2014. Many of those had combined checking and savings account balances as of January 2015 amounting to as much as $50,000,” the report said.

“While it is difficult on this limited information to determine the precise scope of the problem, it is clear that the city’s practices with respect to admitting and retaining persons in its shelter are inconsistent with the statutory requirements that those persons demonstrate ‘need’ for such emergency accommodations after initial admission,” the report said.

The pending lawsuit over the eligibility of some immigrants made it difficult for city staff to answer questions posed by city councilors Monday. Councilor Jon Hinck appeared particularly frustrated when staff didn’t provide an adequate response to inquiries about whether the state audit was correct. He encouraged councilors to hold a special meeting to discuss the policy of so-called presumptive eligibility.

Acting City Manager Sheila Hill-Christian said staff already has developed a list of potential program changes in response to the audit.

“I am very concerned about this and the costs,” Hill-Christian said.

City Councilor Jill Duson said the city could incur a significant cost if it is found to be out of compliance. She requested more information from staff, including when someone who has stayed several nights at the shelter is required to complete the full financial eligibility form.

“It’s a costly assumption, so I need the data,” Duson said of the city’s policy. “Even if I am willing to make a risky decision, which I am, I want to make it with my eyes wide open.”

Councilor Justin Costa was concerned about the financial implications of the audit report, but he also was worried about “chasing the smoke and not going after the flame.” The administration is using Portland as an example to cut millions from the state budget, he said.

“This is a major policy and political dispute that’s happening between the city and the administration,” Costa said. “Right now, we’re being attacked in a coordinated and public campaign that’s insinuating that we are acting in a discretionary way.”

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