An audit report, released today, concludes that United Council of Human Services (UCHS), a major nonprofit organization based in San Francisco’s Bayview Hunters Point community, has not complied with city agreements, raising serious questions for city leadership. The Controller’s Office audit was requested by the Department of Homelessness and Supportive Housing (HSH) which, through grants to a fiscal sponsor, contracts with UCHS to provide nearly $28 million of housing and support services to formerly homeless tenants. HSH is responsible for overseeing UCHS’s program administration and compliance with city agreements. During the audit period, Bayview Hunters Point Foundation (BVHPF) was UCHS’s fiscal sponsor, a role recently assumed by Felton Institute.
As a recipient of grant funding, which comes from both the federal government and the City’s general fund, UCHS must provide services as specified in its contract. The audit found numerous deficiencies in HSH’s monitoring of UCHS’s performance and broad noncompliance by UCHS in determining tenant eligibility, calculating applicant income, hiring staff, collecting rent, and recordkeeping. Notable issues include:
- UCHS appears to have provided many tenants with housing at the discretion of its staff. Some tenants that UCHS placed in supportive housing may be ineligible for it because they did not go through the required referral process or were not required to submit the required eligibility documentation.
- UCHS did not properly calculate most tenants’ annual income or share of the rent to be paid.
- UCHS did not comply with BVHPF’s hiring process.
- Although BVHPF should have collected tenant rents, UCHS did so and kept the rental revenue.
- Because UCHS intentionally circumvented required processes and HSH did not adequately monitor its programs, HSH did not know how many units were vacant, did not calculate tenant rents, and did not conduct housing quality inspections for one housing program.
In regard to the audit report, Controller Ben Rosenfield stated:
Nonprofit organizations deliver some of the most essential services funded by the City and are of particular importance when they’re rooted in the communities they serve. UCHS is one of these organizations, and they have the job of providing services that support many of our most vulnerable residents. My office, in parallel, has a responsibility to the taxpayers who pay for the delivery of these services. I have to express my deep concerns with the findings of this audit, and I urge city leadership to carefully consider the standards we need to uphold in the interest of all our residents.
Within the broader system of city-funded community-based services, the Controller’s Office audits and assists more than a dozen city departments that contract with community-based organizations. A previous Controller’s Office audit of UCHS, conducted in 2017, found similar fiscal oversight issues. The new audit report urges the City to consider UCHS’s history and the current findings in determining what the future relationship between the City and UCHS should be.
The Controller’s Office will follow up every six months with the Department of Homelessness and Supportive Housing on the status of the audit report’s unresolved recommendations.