City Hall Digest: Money Problems Plague Schools and Nonprofits
City Hall Digest is TogetherSF Action’s weekly dispatch from San Francisco’s City Hall, broken into bite-sized pieces—because understanding local government is your fundamental right and duty.
San Francisco Nonprofit Hit With Scandal. No, Not That One. Another One.
Here we go again. Last week, embattled nonprofit homeless shelter the Providence Foundation took another hit when San Francisco City Attorney David Chiu suspended the organization from seeking or receiving new contracts from the city for five years. For those keeping track, this suspension was a response to new, additional allegations against the Providence Foundation, not the ones we covered a few weeks ago.
While the Providence Foundation is already under investigation for fiscal mismanagement, the new charges stem from a pattern of submitting fraudulent invoices for reimbursement. Specifically, Chiu states that the Providence Foundation billed San Francisco $105,000 to pay a contractor to paint the exterior of the Oasis Family Shelter and remove dead bolts from bedroom doors inside the shelter. But two years later, the Oasis Family Shelter is still unpainted, and the dead bolts remain on the doors. Unless the Providence Foundation hired the slowest contractor in the world, this seems to be a case of straight-up fraud.
It’s hard to keep up with the deluge of scandals in the world of San Francisco nonprofits, so a little context for this story is necessary. Patricia Doyle, the executive director of the Providence Foundation since 2019, previously ran another nonprofit in the mid-2000’s. That organization, the Inter-City Family Support and Resource Network, was also accused of financial misconduct, and San Francisco failed to renew its contract with the organization in 2007.
These scandals have really highlighted the fact that despite the fact that some nonprofit providers might provide valuable services, San Francisco doesn’t conduct very extensive background checks for city contractors, so it’s impossible to know who’s going to be a bad apple. Despite Doyle’s history, the Providence Foundation was given millions of dollars in city contracts while Doyle was in charge. Now the nonprofit is under investigation for alleged wage theft, nepotism, illegal recording of guests and employees, overspending city contracts, and allowing beds at the Oasis Family Shelter to sit empty. Oh, and the new, fraudulent invoice allegations too.
City Attorney Chiu has been dogged in his efforts to root out corruption in San Francisco, and he should be applauded for it. Because this kind of corruption is especially harmful. This isn’t a case of some contractor paying a bribe to a city official to get a favorable contract (although that’s bad enough). This is an organization directly taking money meant to help people in need, and using it to enrich themselves instead.
Ultimately, San Francisco needs to reform its entire contracting process, so it doesn’t have to rely on the City Attorney to investigate bad actors on a case-by-case basis. There’s no reason that these scandals should pop up with such alarming frequency in this city, except that our system allows it. It’s far better to build a system that keeps contractors honest by design.
But whatever happens, please, please don’t give Patricia Doyle’s next organization any city money.
SFUSD Is In a Financial Hole—Can They Dig Themselves Out?
The San Francisco Unified School District is in financial crisis, facing a budget deficit coupled with declining enrollment. But if the district hoped to receive state funding to shore up finances, officials shouldn’t hold their breath. Last week, the California Department of Education issued a serious warning, letting school officials know in no uncertain terms that there would not be a state bailout for SFUSD.
That warning came during a special school board meeting last week, called after a state risk analysis and audit found a number of serious, ongoing financial problems at the district. The audit examined the reasons for SFUSD’s current fiscal crisis, pointing to the district’s payroll debacle, failure to provide accurate financial data, and the simple fact that SFUSD is operating too many schools, with too few students attending them.
The district has been heading towards a financial crisis for years, exacerbated by the fact that San Francisco is both a city and a county. All other school districts in California have an overseer at the county level, meant to monitor and catch problems with school budgets. San Francisco doesn’t have that—SFUSD sends its budget directly to the state, so there’s no county-level watchdog to correct issues before they flare into bigger problems.
Adding to the district’s problems over the past few years was the school board’s preference to focus on social issues, like renaming schools, rather than more pressing financial or educational issues. For too long, SFUSD kicked the can down the road, ignoring escalating budget issues, until it became a full-blown crisis.
And now we’re here. The California Department of Education lambasted school officials for not acting sooner to get school finances under control, urging the district to identify millions of dollars in spending cuts to solve the deficit. The audit also recommended a hiring freeze for new staff, closing under-enrolled schools, and improving oversight of credit card usage.
Those are necessary steps, and SFUSD needs to follow the report’s recommendations. Because there’s really not another option at this point, other than letting the school district go bankrupt (which no one should want—bankruptcy and receivership would cause an incredible amount of damage to San Francisco’s schools).
Thankfully, Superintendent Matt Wayne and school board members like Lainie Motamedi seem to be taking the school’s issues seriously, and seem committed to getting SFUSD back on track. But that’s going to mean difficult decisions over the next few years. School issues are highly political, so expect budget cuts and school closures to be a key issue in the upcoming election.
Several incumbent school board members have already announced they won’t seek reelection. It’s going to be crucial to replace them with financially-responsible board members who will set SFUSD up for long-term success. We’ll let you know who they are in our next voter guide.
TODAY I LEARNED
•
TODAY I LEARNED •
Kill Bills?
Not just two great Quentin Tarantino movies—TIL how state legislators kill bills without actually voting on them.
It’s known as “taking a walk” by political insiders. Legislators use it when they avoid taking a stand on a controversial issue. Say a bill is up for a vote, and a legislator doesn’t want to go on record opposing it, because it will piss off half of their constituents (or a big source of funding). Well, when roll call is taken, they can step out of the chamber before their name is called, and they’ll be marked as “No Vote Recorded,” instead of a yes or no vote.
That little jaunt helps them keep a clean record for voters, and kill certain bills that might have passed with their support. It’s not a particularly honorable way to legislate—but it is a crafty one.
