City Audit Finds Serious Problems at Government-Funded Homelessness Nonprofit

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An audit by the San Francisco Controller’s Office found  a pattern of serious problems at a government-funded nonprofit, United Council of Human Services (UCHS), that provides housing and other homelessness services. 

The audit found a pattern of mismanagement at the organization, which has received $28 million in grants through a fiscal sponsor, Bayview Hunters Point Foundation. The latter organization has received $36.4 million across six grants to run Hope House Consolidated, Hope House for Veterans, Bayview Drop-in Resource Center, Jennings Safe Sleeping Village and a shelter-in-place site at Pier 94. 

But the audit found in UCHS’s own financial records that the organization, which receives federal funding for its housing sites, had not properly vetted tenants and ensured that they were prioritized appropriately through the city’s “coordinated entry” system for homeless individuals. The organization has also failed to pay at least $30,661 in rent, among other findings. 

The Department of Homelessness, which requested the audit, expressed concerns to the auditors that the nonprofit has used rent from clients to cover other ineligible expenses. 

Out of 29 sample clients that the auditors examined, 83% were not properly prioritized for placement; the nonprofit also did not retain documentation for its tenants, according to the report. The report also found errors in calculations of rent owed, and inaccuracies in tenant and unit information reported to the city. 

The Controller’s Office recommended that the city consider terminating its grant agreements with the organizations, particularly those that involve federal funding. 

Both federal and local government rules require certain prioritization and record-keeping procedures for organizations that receive public funds to provide low-income housing to homeless individuals. 

It isn’t the first time the city’s budget office has found problems at UCHS. 

A 2017 audit found a slew of organizational problems ranging from inexperienced board members serving longer terms than allowed, $88,140 in missing funds and a missing record of most employees who had ever worked at the company. The report presented 30 recommendations to establish more oversight at the nonprofit. 

The nonprofit’s most recent tax return shows several employees making a $0 salary despite logging 40 hours a week for the organization.

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City-funded nonprofits have fallen under the microscope in recent months, with Supervisor Catherine Stefani calling for new legislation to tighten up oversight of nonprofits that receive city funding, also called “community-based organizations.” 

This fall, a scandal erupted at Positive Resource Center (PRC) and Baker Places, two related nonprofits that provide addiction treatment and other services, when the organizations asked the city for a $4.2 million bailout and threatened to close some of its programs. 

Subsequent reporting by The Standard revealed that a top Department of Public Health official, Lisa Pratt, had been drawing a second six-figure salary from Baker Places, which receives the bulk of its funding from the health department. 

Supervisor Ahsha Safai has called for a hearing on the situation at Baker Places and PRC, which run a network of drug rehab and other behavioral health sites in the city. 

This is a developing story and will be updated.

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texasstandard.news contributed to this report.

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