Rules Committee advances ordinance to standardize auditing, monitoring of city nonprofit contractors

The Rules Committee of the San Francisco Board of Supervisors voted Nov. 27 to send an ordinance to the full board that would place programmatic monitoring of nonprofit contractors under the City Controller and introduce standardized performance measures, corrective-action procedures and enhanced public reporting.

Sponsor Supervisor Catherine Stefani said the legislation responds to the Controller's citywide nonprofit performance audit and aims to "enhance transparency, accountability, and the overall effectiveness of the community based organizations" that deliver services under city contracts. Laura Marshall, a project manager in the Controller's office, told the committee the city currently spends "over $1,700,000,000 on contracts with over 600 nonprofits" and that the proposed policy would standardize site visits, reporting cadence and coordination across departments.

The ordinance directs the Controller's office to set standards for how departments measure programmatic performance, update the city's corrective-action policy to allow coordinated responses across departments, issue annual reports on departmental compliance, and develop procedures requiring nonprofits that receive at least $750,000 in city contracts to submit audited financial statements. Marshall said the Controller's office aims to publish some required policies by Sept. 1, 2024, and to work with departmental and nonprofit stakeholders during implementation.

Committee members praised the goal of consistent oversight while raising implementation questions. Vice Chair Shimon Walton asked about technical assistance for smaller community-based organizations that already conduct audits without CPAs; Marshall said the office plans to set implementation procedures and consider baselines rather than a one-size overhaul. Supervisor Asha Safai asked whether audits would be submitted to the Controller or to individual departments; Marshall said fiscal-monitoring processes would likely remain the repository but that public-posting approaches and procedures will be designed during implementation.

Public commenters from nonprofit coalitions and providers broadly supported standardized accountability while urging collaborative development of performance goals and cautioning about reporting burdens. Lucia Bridal of the San Francisco Latino Parity and Equity Coalition asked that performance goals be co-created with nonprofits. Debbie Lerman of the San Francisco Human Services Network recounted a 2001 contracting task force that recommended similar reforms and urged support for the measure.

Chair Matt Dorsey moved to send the ordinance to the full board with a positive recommendation. Roll call: Walton, aye; Safai, aye; Dorsey, aye. The motion passed without objection.

The ordinance will next be considered by the full Board of Supervisors; the sponsor said she plans additional legislation to draft a "master contract" that would reflect standardized expectations across city nonprofit agreements.