53% of City-Funded Nonprofits Failing Accounting Standards

Two weeks ago, I blogged about the City Controller's Office replying to my query about the last time HIV service groups receiving public dollars were last audited and it was back in 2007-2008 when the books were combed over by the City.

The City Controller also made me aware of the FY13-14 Annual Report of the Citywide Nonprofit Monitoring and Capacity Building Program, which was issued in October, and while it's not specific to AIDS organizations, it's still of interest to me.

This chart shows the nonprofits with the most "outstanding findings", which is bureaucratese for failure to comply with accounting standards. The report says, "In addition to repeated findings, having a large number of total findings can also illustrate potential instability."

Yes, and just one or two findings of noncompliance could be about major faults at a City-funded nonprofit that should be of concern to the Controller and taxpayers.

This is quite an alarming statistic: "62 contractors (53%) had one or more findings (i.e., did not meet a standard in some area)." More than half of the nonprofits receiving City dollars weren't in compliance with all mandated accounting standards.

In my view, we need a full and public discussion about this October report to the Mayor and Board of Supervisors. I don't recall any attention given to its release and findings, but if there were hearings or coverage of the report, please let me know about where or when if was scrutinized at City Hall or in the community.

Guardian: Blogger, Not SF Chronicle, Exposes Mayor Newsom's Rehab Gets Govt Grants

Very kind of the Bay Guardian reporter G.W. Schultz in his article today to give me credit for poking a hole in the Chronicle's reporting that Delancey Street rehab does not receive government grants.

From the Guardian:

The San Francisco Chronicle’s intrepid reporters have insisted repeatedly in recent weeks that the Delancey Street Foundation accepts absolutely no government funds. “Instead, it relies on donations and the profits from its commercial enterprises,” San Francisco’s paper of record wrote on Feb. 6.

A simple search of the city’s vendor database, however, confirms that several local agencies in San Francisco paid Delancey Street amounts totaling well over $1 million for the last two fiscal years alone.

The Department of Children, Youth & Their Families gave Delancey Street $98,000 in program grants for each of the last two fiscal years and by the end of 2007 will have given the nonprofit more than $300,000.

And the mayor’s office gave Delancey Street $435,000 in fiscal year 2006 and $483,000 in 2005, the records show.

The city has paid the foundation more than $200,000 so far this year, and there’s another $64,000 in outstanding payments. The Guardian obtained copies of the grant agreements through sunshine requests made last week.

Mayor Newsom is receiving type of counseling for a self-diagnosed excessive love of white wine from Delancey Street’s politically well-connected executive director, Mimi Silbert, who has known Newsom and his family for years.

The foundation’s easily accessible federal tax forms reflect the hundreds of thousands in annual government dollars paid to Delancey Street.

After local blogger Michael Petrelis began contesting the claims, a Chronicle reporter clarified for Petrelis following a call to Silbert that grant money from the city supports a charter school on Treasure Island called the Life Learning Academy. The academy is managed by Delancey Street and targets troublesome teens – half of them on probation – who have had problems elsewhere in the school district. Silbert told us that the school was designed in part to emulate Delancey Street by operating businesses like its organic produce subscription service and bike maintenance shop. [...]

Thanks for the mention, Bay Guardian. To read my previous posts on this, click here and here.