Multnomah County officials have backed away from threats to cut off funding to the Urban League despite years of financial mismanagement at the troubled nonprofit.

According to records released to WW on Friday, county officials have told the Urban League that they will put the organization under closer scrutiny and demand more accountability in seniors programs the nonprofit provides under a county contract.

But the county has already had the Urban League on careful watch for more than two years, after auditors in 2009 discovered the organization has been unable to account for credit card spending by then-Urban League President Marcus C. Mundy.

WW broke the story about Mundy's unchecked spending Dec. 7, citing internal county records that show Mundy could not account for more than $44,000 in charges on the organization's credit cards—some of it going to Mundy's personal expenses.

A week later, WW reported county officials had found serious problems with seniors programs the Urban League has been providing under contract with the county.

The county has paid the Urban League $729,000 over the past three years under a contract to provide services. County money accounts for more than 20 percent of the League's $1 million annual budget.

Mundy resigned on Dec. 9, and the Oregon Department of Justice, which regulates nonprofits, opened an inquiry into the Urban League's finances.

Here's the county's letter to the Urban League:

Lolenzo Poe Jr.PresidentUrban League Board of Directors 10 N Russell St Portland, OR 97227December 23, 2011Dear Lolenzo,

I am writing to inform you of the County’s decision to continue its collaboration with the Urban League for the delivery of senior services in North and Northeast Portland. The County’s commitment, however, is contingent upon two things. First, the Urban League must successfully implement the fiscal controls described in Charles Wilhoite’s letter of December 16, 2011 and his e-mail to Colleen Yoshihara of December 22, 2011. Second, the Urban League and the Hollywood Senior Center must complete contract negotiations that will formalize their partnership for the delivery of senior services to begin January 1, 2012.You have received the Urban League Fiscal Compliance review dated December 14, 2011 conducted by Ms. Yoshihara. In this review of records from January 2011 to April 2011, Ms. Yoshihara found that the Urban League’s fiscal policies and practices did not meet the minimum standards required by the County of organizations that utilize federal funds. Subsequently, Marcus Mundy, Urban League CEO resigned and on December 16, 2011, Charles Wilhoite, Urban League Board Treasurer, provided a response to the County fiscal compliance review. In this response, Mr. Wilhoite described policies the Urban League Board has put in place and will be putting place to address the concerns listed in the County’s review.

After reviewing Mr. Wilhoite’s response, Ms. Yoshihara contacted your Board Treasurer to recommend some changes to your proposed policies. Specifically, she recommended that no credit or vendor account will be opened without prior approval of the Urban League Board. In the email exchange attached to this letter, the Urban League Board agreed to these changes. I have also attached Ms.Yoshihara’s memo to me dated December 20, 2011 which contains her assessment of your proposed fiscal policies and procedures.

Taking into consideration the actions that the League Board has taken to date and the policies you have agreed to implement immediately, the County has concluded that you have adopted appropriate fiscal controls. Of course, the County will be returning in the near future to ensure that the fiscal controls are successfully implemented.

As indicated above, the County’s plan to collaborate with the Urban League is contingent on the execution of appropriate contractual documents between the Urban League and

HSC. Our expectation is that you or your counsel will be in contact HSC as soon as possible in order to complete those negotiations prior to January 1, 2012.

Thank you for your service as a Board member of the League. There are so many issues in our community that the League can play a vital role in addressing. It is my hope that with appropriate fiscal controls in place the Urban League can focus on the community we serve and their needs.

Please contact me if you have any questions. Sincerely,

Joanne Fuller Chief Operating Officer Multnomah County