This is what we know: “Some 30 percent of San Francisco nonprofits monitored and funded by the city are not adhering to required fiscal rules, according to a Jan. 13 report from the Board of Supervisors Budget and Legislative Analyst.
The lack of compliance does not mean the city’s nonprofits are derelict in their duties. It does, however, raise eyebrows at a time when such contracts are under scrutiny following a series of scandals under Mayor London Breed’s administration.
Mayor Daniel Lurie, in announcing anti-fentanyl ordinances, has called for a suspension of competitive bidding rules and Board of Supervisors approval of contracting, which could result in even less oversight.”
My guess is that these 30% of non profit are also not following IRS rules. It is time for audits of all of them. Not just in San Fran, but nationwide. We need non profits—not grifters, scam artist or political hacks using them to hide political operations.
One-third of S.F. nonprofits in city survey didn’t meet fiscal standards
Also: 35 percent of newly created city-funded positions are vacant
by Abigail Vân Neely, Mission Local, 1/16/25 https://missionlocal.org/2025/01/nearly-one-third-of-s-f-nonprofits-in-city-survey-didnt-meet-fiscal-standards/?utm_medium=email&utm_source=Mission+Local&utm_campaign=067209f978-EMAIL_CAMPAIGN_2025_01_16_03_40&utm_term=0_-067209f978-220954085
Some 30 percent of San Francisco nonprofits monitored and funded by the city are not adhering to required fiscal rules, according to a Jan. 13 report from the Board of Supervisors Budget and Legislative Analyst.
The lack of compliance does not mean the city’s nonprofits are derelict in their duties. It does, however, raise eyebrows at a time when such contracts are under scrutiny following a series of scandals under Mayor London Breed’s administration.
Mayor Daniel Lurie, in announcing anti-fentanyl ordinances, has called for a suspension of competitive bidding rules and Board of Supervisors approval of contracting, which could result in even less oversight.
Connie Chan, the Board of Supervisors’ budget chair, who requested this Budget Analyst report last spring and released a first draft in June, said she would work to bring nonprofits in line with the city’s standards.
“We want more organizations in compliance, not just with the city controller’s office through the auditing process, but also making sure that they are in good standing with the state attorney general,”shesaid.
Former city controller Ed Harrington said the city can train nonprofits to file more timely financial statements, for instance, “as opposed to cutting them off.”
“Let’s face it; the nonprofits you’re working with are the backbone of how we do mental health, substance abuse, and other programs in the city and, for many communities, there aren’t a lot of choices for who might do that work.”
San Francisco spent approximately $1.5 billion to contract services with community-based organizations in the last fiscal year. These organizations, the report noted, “provide essential health, behavioral health, homeless, and other services.”
Most partner with the Department of Homelessness and Supportive Housing, Department of Public Health, and the Human Services Agency. They include nonprofits like Catholic Charities, the Native American Health Center, and Jewish Family Services, which help provide shelter and medical access.
One-third of the approximately 200 organizations monitored for healthy fiscal practices by the Citywide Nonprofit Monitoring Program — 61 of 199 — were found to be non-conforming with city standards, according to its annual audit.
Among the most frequent issues: Incomplete or late audited financial statements, even from organizations that are accomplishing their paid tasks.
The Jan. 13 report cautions that “insufficient financial practices can result in the closing of community-based programs that otherwise had satisfactory performance.”
Two such instances are described. The Jo Ruffin residential treatment program and the Grove Street House crisis residential treatment center had successfully provided service, but were closed due to the “financial insolvency” of their operator, Baker Places, in 2021. Baker Places was later promoted from “red flag” status to “elevated concern” status the following year, according to the report.
In another case, the homeless nonprofit Providence Foundation, in May 2024, was debarred from seeking new contracts over allegations of falsified invoices.
Seven of the 81 community-based organizations reviewed for the report — selected because they each received “high dollar contracts” of over $10 million to deal with the “most urgent issues on our streets,” Chan said — were found to have been out of compliance for the last two fiscal years. All, however, continued to receive city funding.
“There are not that many organizations” that can provide the services done by the city-contracted organizations, Chan said.
Moving forward, Chan said she hopes the mayor will be “more hands-on about conducting in-person inspections and audits.” The Board of Supervisors, she added, can work to identify fiscal compliance issues earlier.
Report outlines possible dept. mergers, city vacancies
The Jan. 13 report also addressed vacant city-funded positions and potential department mergers.
More than $8 million in salary and benefit costs went unspent as approximately 35 percent of the city-funded positions created in the last fiscal year remained vacant. Most of these vacant positions were in the Department of Public Health, which employs the largest number of staff.
Former controller Harrington was unsurprised by these numbers: The city’s application process is lengthy, and there is an “assumption that a certain number of positions will always be vacant in the city.” Salary savings are often put towards overtime pay, as is common in the police department, or pushed into the following year’s budget.
Finally, the Budget and Legislative Analyst’s office prepared a list of departments that could potentially be restructured. Their eight merger suggestions include combining police, fire, and emergency management into a unified Department of Public Safety, and combining the juvenile and adult probation departments.
Chan described these proposals as a “blueprint” for minimizing administrative costs, rather than a means of cutting services and programming. Ultimately, she said, the board will consider the report as it discusses measures to “reduce wasteful spending and increase efficiency in city government.”
The Jan. 13 report proposes eight possibilities for departments that could be merged:
- Health Service System and Human Resources Department
- Adult Probation and Juvenile Probation Departments
- Planning and Building Inspection Departments
- Department of Children, Youth and Their Families and Department of Early Childhood
- Police, Fire, and Emergency Management into a unified Department of Public Safety
- Department of the Environment and Public Works
- Human Rights Commission and Department on the Status of Women
- Department of Police Accountability, Sheriff’s Department of Accountability, and Office of Inspector General
