Metropolis Information Counsel SF ‘Failed’ to Correctly Monitor Nonprofits That Bought Tens of millions

San Francisco nonprofits obtain greater than a billion {dollars} in taxpayer cash yearly, however the degree of scrutiny they face varies significantly by division—and, in some instances, oversight of operations has been left to the respect system because the pandemic began.

Metropolis information present that two nonprofits—Baker Locations and the United Council of Human Companies (UCHS)—obtained principally glowing marks from metropolis businesses final 12 months, not lengthy earlier than they had been accused of mismanaging public funds. Metropolis officers are within the strategy of pulling a few of Baker Locations’ contracts, and metropolis officers flagged UCHS for felony investigations.

The Normal obtained efficiency monitoring stories for a number of metropolis departments after an investigation discovered that just about 140 nonprofits contracting with the town had been legally barred from receiving or spending funds after having their charitable standing revoked by the state Legal professional Normal’s Workplace.

A evaluation of stories discovered low efficiency in some instances and inconsistencies in documentation, notably inside the Division of Homelessness and Supportive Housing, which had greater than $87 million in contracts with nonprofits that had been out of compliance with the state as of final 12 months. Whereas a few of the company’s nonprofits obtained intense scrutiny and suggestions on how they might enhance, others had been basically rubber-stamped and stories supplied few feedback past saying information had been “so as, organized and simple to comply with.”

As San Francisco has turn into more and more reliant on the work of nonprofits, which may be extra nimble and cost-effective than metropolis departments, the efficiency stories have raised issues about whether or not public businesses are sufficiently managing the organizations tasked with confronting the town’s greatest crises.

Wake-Up Name 

Supervisor Catherine Stefani, who oversaw a Authorities Audit and Oversight Committee listening to final month trying into how nicely metropolis nonprofits are performing, mentioned the discrepancies in reporting by metropolis departments ought to function a wake-up name.

“That is precisely why San Franciscans are skeptical about how we’re spending taxpayer {dollars},” Stefani mentioned in a press release. “Final 12 months, we spent $1.4 billion on metropolis contracts. And but, the checks which are supposed to forestall and determine mismanagement failed.”

San Francisco Supervisor Catherine Stefani takes notes throughout a Board of Supervisors assembly at Metropolis Corridor on Could 3, 2022. | Camille Cohen

Sherilyn Adams, government director for the nonprofit Larkin Road Youth Companies, mentioned within the February oversight listening to that working with the town may be burdensome.

“Contracting with the town is sophisticated and difficult,” Adams mentioned. “Once we are speaking about streamlining the method, what we’re speaking about is [that] on this system monitoring facet or doing enterprise with particular person departments, there may be little or no consistency.”

In August 2022, the Metropolis Controller’s workplace launched an audit that discovered metropolis departments operated in silos when monitoring nonprofits, creating redundancies and permitting organizations to flee discover when falling in need of their goals.

Debbi Lerman, government director of SF Human Companies Community, a lobbyist group for roughly 80 nonprofits within the metropolis, mentioned that the necessities positioned on nonprofits may be heavy-handed. However she mentioned her group helps a streamlined monitoring program.

“We’re in communication with Supervisor Stefani, and we help this effort,” Lerman mentioned. “What we don’t wish to see is layers and layers of extra duplicative and pointless necessities positioned on nonprofits. We’re making an attempt to supply providers, not fill out papers all day.”

Paper Pushing

Baker Locations, which has operated residential detox and remedy applications for 1000’s of individuals within the metropolis, got here underneath scrutiny final 12 months after it twice begged supervisors for a bailout because of inadequate funds. Nevertheless, much less consideration was given to how nicely the group was finishing up its mission. 

A Google Road View of Baker Locations at 170 ninth St. in San Francisco.

A efficiency report carried out by the Division of Public Well being in June of final 12 months discovered that the Valencia Hummingbird respite program—designed to assist people who find themselves homeless, mentally in poor health and affected by drug habit—met simply 50% of its contracted efficiency goals. No plan of motion was beneficial. A report for Odyssey Home, one other rehab facility run by Baker Locations, reveals that it was assembly simply 40% of its efficiency goals.

The efficiency of those applications was not cited as a purpose by the town to tug a few of Baker Locations’ contracts.

The Division of Public Well being mentioned in a press release that the company is working with Baker Locations “to take care of providers by the tip of this fiscal 12 months and proceed to evaluation with them the switch of providers that may reduce impacts on purchasers and employees.”

In April 2022, the Division of Homelessness and Supportive Housing gave excessive marks to UCHS, which operates a leisure car shelter at Pier 94, regardless of notes about pet feces being a “fixed subject” and 4 trailers being destroyed by fires. The report famous that some visitors weren’t going by the town’s coordinated entry system, which is required by regulation, however all goals within the report had been giving passing grades.

The group’s CEO, Gwendolyn Westbrook, later informed The Normal that she offered housing to as many as 20 relations, mates and staff.

In November, the Metropolis Controller’s and Metropolis Legal professional’s places of work issued a report that accused UCHS of widespread mismanagement. The 2 places of work requested the FBI and SF District Legal professional’s Workplace to launch felony probes.

The Division of Homelessness and Supportive Housing additionally has a million-dollar contract with the Tenants and Homeowners Improvement Company (TODCO), however the company has not executed an inspection of any of the nonprofit’s eight low-income condo buildings within the South of Market space because the begin of the pandemic.

A current investigation by The Normal reported that tenants in one among TODCO’s single-room occupancy buildings had frequent complaints about rat and roach infestations. Moreover, 15 folks have died from drug overdoses in TODCO properties because the begin of 2020.

Emily Cohen, a spokesperson for the Division of Homelessness and Supportive Housing, mentioned in a press release that the company makes use of a risk-assessment device to find out which of its nonprofits ought to obtain the eye of program displays.

“We take a look at a number of components to find out if a contract is taken into account excessive or low danger,” Cohen mentioned.  “TODCO has not been prioritized for onsite program monitoring because it has been decided to be a low-risk grant. It’s our intention to broaden program monitoring to all grants and contracts as we employees up.”

Supervisor Stefani’s workplace has been working with the Metropolis Controller on laws to handle nonprofit efficiency monitoring, and new laws could possibly be launched by the tip of subsequent month.

“We have now to essentially change how we monitor and consider the efficiency of those organizations to make sure that they successfully ship for the susceptible populations they’re meant to serve,” Stefani mentioned.

Josh Koehn may be reached at [email protected]