On the heels of a savage state audit finding San Jose’s Housing Dept had negligent oversight of fund disbursement to local non profits, comes a new city audit which finds more of the same dating back to 2021. And in SF, the never-ending parade of non profits discovered to have been fleecing the city continues. Info below from SJ Housing Dept memo and reporting from SF Standard.
From SJ Housing Dept memo:
The table below is a summary of the grant monitoring and compliance review results for the FY 2021-2022 housing grant agreements during the PUN Group’s most recent sample segment (44 grant agreements).
Forty-two grant agreements were monitored during this most recent review period and 39 grant agreement reviews (representing 24 organizations) resulted in material findings. Note, 11 additional grant agreements from FY 2021-2022 were previously reviewed under the former permanent Housing Director. These additional 11 grant agreements bring the total grant agreements reviewed from FY 2021-2022 by the PUN Group to 55, encompassing the totality of grant agreements administered by the Housing Department for the FY.
Staff confirmed that appropriate actions were taken to address the 11 grant agreements initially reviewed. Moreover, the Housing Department did not have the appropriate contracting policies and procedures in place in order to effectively and efficiently administer the grant agreements. The Housing Department is actively working to revise the appropriate contracting policies and procedures to effectively and efficiently administer the grant agreements and is working with impacted grantees to address deficiencies and prevent issues going forward. Accountability for all partners is a priority for the Housing Department.
A material finding is a deficiency in internal controls and non-compliance with applicable regulations or contractual provisions. When a finding is made during a grant monitoring and compliance review, a compliance review letter is issued to the grantee, which allows the grantee 30 days to dispute the findings (by submitting an appeal), provide additional documentation, provide a corrective action plan, or submit repayment of any disallowed costs. A final decision on any grant monitoring and compliance review appeal is at the discretion of the Housing Director.
Read the whole thing here.
SF Standard coverage:
In February 2021, Mayor London Breed and Supervisor Shamann Walton — political adversaries united by the distinction of being the lone Black elected officials in the city at that time — came together to announce the Dream Keeper Initiative, a landmark piece of legislation that promised to redirect $120 million to address issues caused by systemic racism.
But despite the many good deeds of Dream Keeper, the initiative has become a bookkeeper’s nightmare.
Many of Dream Keeper’s community partners — nonprofits, businesses and individual grantees — have been unable to build out capacity as planned, leaving millions unspent, while other groups have spent money in ways that have mystified and embarrassed city officials. It’s unclear where millions of dollars have gone based on Dream Keeper’s outdated budget dashboard, and Breed recently intervened to order a freeze on funds for certain organizations that were seen as misusing city money.
Joan Harrington, a former director and current fellow at the Markkula Center for Applied Ethics at Santa Clara University, said, “If the city is going to continue giving this kind of money away, it needs to adjust the system through which it makes and supervises the grants,It sounds like they didn’t have a good handle of what was happening through the nonprofits.”
Jeff Cretan, a spokesperson for the mayor, said in an email that Breed believes the Dream Keeper budget needed to be “right-sized,” and it will now be $40 million annually.
Read the whole thing here.
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