Rules Committee approves amendments directing Controller to strengthen audit and monitoring of nonprofit contracts

The San Francisco Rules Committee on Feb. 26 approved amendments to an Administrative Code ordinance directing the Controller's audit and monitoring responsibilities for nonprofit contractors and sent the amended measure to the full Board with a positive recommendation.

Dominica Donovan, chief of staff for Supervisor Catherine Stefani, outlined changes made after outreach with smaller nonprofit coalitions (including the Asian and Pacific Islander Council, Black Wall Street, Latino Task Force, Mega Black, SALT and the San Francisco Latino Parity and Equity Coalition). Key amendments add an explicit racial-equity definition reference, require the Controller to undertake public rule-making and publish guidance on department engagement with contractors, extend the compliance deadline to November (from September), and delay the new auditing requirement until March 31, 2026 to allow nonprofits time to prepare.

Donovan said the amendments also require the Controller to issue guidance on corrective-action policies and to engage organizations of all sizes with special attention to historically underserved communities. Deputy City Attorney Anne Pearson has advised that the changes are not substantive, the presenter said, and the office of the Controller and staff (including Laura Marshall) were present for questions.

Supervisors praised the consultative approach and emphasized the need to balance accountability with support for community-based organizations. Debbie Lerman of the San Francisco Human Services Network testified in support of the ordinance and urged that accountability measures include training, technical assistance and adequate funding for overhead so small and diverse CBOs can comply without excessive burden.

Chair Ronan moved to accept the amendments and forward the item with a positive recommendation; the motion passed without objection. The item will move to the full Board for final action.