Committee forwards sheriff’s pretrial diversion contract amendment amid concerns about nonprofit’s finances and program performance

The Budget and Finance Committee on Jan. 24 considered a fourth amendment to the Sheriff’s Office contract with the San Francisco Pretrial Diversion Project to add approximately $499,000 (raising the not-to-exceed amount to about $19.8 million) for services through 06/30/2024. Chief Financial Officer Patrick Leung of the Sheriff’s Office described the amendment as primarily covering cost-of-living salary adjustments and acknowledged internal transitions that delayed site monitoring visits.

Nick Menard of the Budget and Legislative Analyst Office walked the committee through BLA findings. He said the nonprofit contractor had not provided an annual audited financial statement since June 2021 and reported a decline in net assets (from roughly $700,000 to $400,000 in recent filings). "The organization hasn't done [an audited financial statement] since June 2021," Menard said, adding that the organization's reserve and financial condition fall short of best-practice guidance. BLA also reported that program metrics generally look like the program is working but noted a lower court-appearance rate for clients on the highest level of supervision (assertive case management), which the BLA flagged for improvement.

Supervisors pressed for accountability. Supervisor Mirona Malgar urged a plan that would include a cost-benefit analysis and asked the Sheriff’s Office to follow BLA recommendations to provide controls review, technical assistance, and annual program monitoring. Supervisor Rafael Mandelmann and others expressed mixed views—praising the program’s goals but noting concerns about financial and performance oversight.

The Sheriff’s Office staff said they would complete monitoring visits and work to implement BLA recommendations in the coming months. The committee accepted those requests and voted to forward the amendment to the full Board without recommendation, recording three ayes.

Key numbers and clarifications: BLA reported the contractor's net assets declined (approximate figures), cited expenses of about $9.3 million for one reviewed year, and recommended the Sheriff’s Office and Controls Office review the contractor to determine need for technical assistance. The amendment extends funding through the remainder of the fiscal year and includes no change to the contract term end date (06/30/2024).

What happens next: The amendment will proceed to the full Board. The Sheriff’s Office will return with responses to BLA recommendations and a plan to monitor and improve program performance if funding continues beyond the current fiscal year.

Votes and outcome: Committee forwarded the amendment to the full Board without recommendation; recorded vote 3–0 (Mandelmann, Melgar, Chan).