Portland Public Schools is accepting many recommendations from an external audit of its $61.5 million contract with construction manager Procedeo, while rejecting several central findings about how the deal was awarded and whether it was properly priced. The review examined the district’s December 2025 decision to hire the Texas-based firm to manage more than $1.38 billion in construction projects. The work includes major modernizations at Cleveland, Jefferson and Wells high schools, as well as plans for the Center for Black Student Excellence. The projects are part of a voter-approved bond program totaling $1.8 billion. Auditors from Sjoberg Evashenk Consulting said the district had not established a clear business case for outsourcing the work. They also concluded that school board members lacked complete and accurate information when they voted 5-2 to approve the contract. The student representative at the time cast a nonbinding vote against it. The auditors characterized the resulting agreement as an “overpriced, binding contract” at the high end of market comparisons and warned that the district had put bond funds at risk. In a response released publicly this week with the full audit, Senior Chief of Operations Jon Franco said PPS had implemented or planned to implement 24 recommendations and partially agreed with eight others. But he objected to the audit’s account of the contracting process, saying the district did not agree with its “tenor” or what he described as frequent implications of impropriety. Franco also asked the auditors to redo the report to meet standards he said were insufficiently defined. Sjoberg Evashenk declined, saying its report followed the same format used in audits submitted to and accepted by PPS since 2019. The firm said it would not rewrite the report, which runs more than 100 pages. The district does not plan to renegotiate Procedeo’s contract, despite the auditors’ recommendation. Franco said comparable school construction programs showed that the contract’s base fee of 3.65% to 4% fell within the documented range for comprehensive management services. PPS also disputed the auditors’ conclusions that work funded by earlier, voter-approved bonds from 2012 and 2017 was essentially complete. District leaders had cited unfinished work and unspent funds from those bonds as reasons to move from a largely in-house management model to an outside contractor. The district rejected a separate finding that hiring Procedeo created the appearance of a conflict of interest. The firm had worked with PPS on plans to accelerate Jefferson High School’s modernization before those plans were abandoned. Franco said a district review found procurement rules had been followed and no actual or apparent conflict among evaluators. At a school board meeting Tuesday, Bond Accountability Committee Chair Greg DiLoreto praised Procedeo’s work, saying projects were proceeding “on time and generally within budget and scope.” He also commended the firm’s project management plan, which he said was the first of its kind the committee had received during the modernization program. Procedeo owner Brian Johnson said the company supports stronger district oversight, including scrutiny of its own work, and would cooperate as PPS follows up on the audit. One unresolved question is whether the district will hire an outside construction auditor to examine accounting and payroll records for contractors working on the three high school modernizations. Sjoberg Evashenk recommended that step. Franco said PPS would assess internal and external options to determine the most effective and efficient approach. The dispute centers on how the district will protect public funds as it carries out a large bond-funded building program. While PPS has committed to act on many of the audit’s recommendations, it has not agreed to the proposed contract changes or to a separate external review of contractor records.