San Francisco, CA (December 9, 2024) — In March 2024, the Board of Supervisors passed an ordinance (55-24) sponsored by former Supervisor Catherine Stefani directing the Controller’s Office to issue new policies and reports guiding the City’s monitoring of nonprofit contractors. Today, the Controller’s Office issued a suite of products that satisfies these legislative requirements and goes beyond the original mandate by offering additional guidelines and tools.
The City and County of San Francisco (City) contracted with nonprofits to deliver $1.5 billion in services last year, with City spending growing by 63% since 2019. While many nonprofits provide quality services, some high-profile exceptions have shone a spotlight on the City’s need for greater oversight of these contracts. The new policies establish foundational requirements that departments must follow when they contract with nonprofits to deliver services to the public.
“This work is critical to ensure we’re providing the best services possible when the City partners with nonprofit organizations” said Controller Greg Wagner. “These policies and tools create a framework for greater transparency, oversight, and accountability of dollars spent by City departments and the nonprofits they engage to deliver services. Along with fiscal compliance, we need to focus on measurable performance targets and reporting results.”
A cornerstone of this package is a new Contract Monitoring Policy, which establishes Citywide requirements and guidance for how departments should monitor the performance of nonprofit service providers. The policy includes guidance on setting performance measures, reporting standards, point-in-time monitoring requirements, and expectations around engagement with nonprofit contractors.
The suite of publications also includes updated guidelines on financial monitoring practices, a new policy on financial auditing requirements for nonprofits, updates to the City’s nonprofit corrective action policy that is used when nonprofits do not meet contract expectations, and recommendations for how the City should improve public reporting about nonprofit contracting.
As a companion to new policies, the Controller’s Office developed an array of new webpages, as required by Stefani’s legislation, and web-based tools to support departments, nonprofits, policy makers and community members to more easily find, access, and understand information on nonprofit contracting. This includes a set of interactive dashboards that use data from the City’s financial system to show spending on nonprofit contracts over time.
To develop these policies, the Controller’s Office engaged hundreds of individuals from City departments and nonprofit organizations in a robust and thorough collaborative process, as mandated by the ordinance to uplift all communities. In the coming year, the Controller’s Office will expand the long-standing Citywide Nonprofit Monitoring and Capacity Building Program to include both fiscal and contract monitoring components, and to assess the types of support City departments may need to align their practices with new guidelines.
As we proceed with our implementation, the Controller’s Office will post updates and guidance on our new webpages, and we will issue new required reporting on departments’ contract monitoring practices by the end of 2025.