Department of Children, Youth and Their Families : San Francisco Neighbors Resource Center could not account for all its grant expenditures PDF
Preview Department of Children, Youth and Their Families : San Francisco Neighbors Resource Center could not account for all its grant expenditures
SAN FRANCISCO PUBLIC LIBRARY Mill 3 1223 07661 DEPARTMENT OF CHILDREN, YOUTH AND THEIR FAMILIES: San Francisco Neighbors Resource San Francisco PublicLibrary Center Could Not Account for All Its Grant Expenditures Government Information Center San Francisco Pubik; Library DOCUMENTS DEPT. 100 Larkln Street, 5th Floor SanFrancisco, CA 94102 FEB - 8 2007 REFERENCE BOOK SAN FRANCISCO PUBLIC LIBRARY Not to be taken from the Library Financial Audits •CjOUEFTSj!!. February 2007 D 1, REF 658.159 Sa5785sn M flBI flIHHH €0 U fa DEPARTMENT OF CHILDREN, YOUTH AND THEIR FAMILIES: San Francisco Neighbors Resource Center Could Not Account for All Its Grant Expenditures DOCUMENTS DEPT. FEB - 8 2007 SAN FRANCISCO PUBLIC LIBRARY o Financial Audits February 2007 1, City and County of San Francisco Office of the Controller - City Services Auditor Department of Children, Youth andTheir Families: San Francisco Neighbors ResourceCenterCould Not Accountfor All Its February 1, 2007 Grant Expenditures Purpose oftheAudit At the request of the mayor of the City and County of San Francisco, we investigated the use of cityfunds by the nonprofit San Francisco Neighbors Resource Center. Highlights Recommendations Results The audit report includes four recommendations forthe The center's inadequate financial records prevented us from Department of Children, Youth and completing afull audit, and we could not determine whetherthe Their Families to ensure thatthe center improperly used cityfunds for political purposes. However, center accounted forthe use of city based on the records provided to us, we were able to conclude funds, including the following: that the center misspent some cityfunds and has not maintained adequate documents as required by its grants with the city. The • Require the center and its audit identified the following deficiencies where the center: president, Julie Lee, to provide documentation to support • Did not have sufficient supporting records in the form of expenses totaling $155,493 for invoices, time sheets, and otherfinancial records for which the audit did not find $155,493 of the $167,998 (93 percent) in grant funds the adequate support. If the center center received from the department. cannot provide these records, the department should recover • Received $6,666 as an advance that it did not use and the funds from the center. should return to the department. • Determine if the San Francisco • Claimed and received $2,000 more in salary payments than Neighbors Resource Center is a it paid to a center employee. viable non-profit and request the center and its president, Julie • Did not obtain from its vendors detailed invoices to Lee, to return $6,666 for the substantiate the reasonableness of some vendor charges, cash that the department including radio advertising and computer database services. advanced to the center but which the center did not use. • Did not keep adequate records of the clients it served under the grants. 3 1223 07661 9494 CITY AND COUNTY OF SAN FRANCISCO OFFICE OF THE CONTROLLER Ed Harrington Controller Monique Zmuda Deputy Controller February 2007 1 , Margaret Brodkin, Director Department of Children, Youth and Their Families 1390 Market Street, Ste. 900 San Francisco, CA 94102 Dear Ms. Brodkin: The Office of the Controller presents its report concerning the review of the San Francisco Neighbors Resource Center (center), a nonprofit organization, and its compliance with requirements for the use of city funds. The nonprofit received city funding, under a grant with the Department of Children, Youth and Their Families (department), to provide community referral services. Because the nonprofit was alleged to have made improper campaign contributions using state funds, we investigated whether the nonprofit made improper campaign contributions using city funds. Because of on-going investigations by various state and local agencies, we could not gain access to the center's original records; instead, the center's attorneys provided copies of documents pertaining to the city grant. However, those documents only covered $41 ,655 of the $167,998 (25 percent) in grant funds the center received from the department. Based on these records, the auditors could not determine conclusively if the center improperly used city funds for political activities. Nevertheless, from the available records, the auditors identified at least $8,666 in overpayment from the department to the center. The response from the department is attached to this report. The City Services Auditor- Financial Audits will be working with the department to follow up on the status of the recommendations made in this report. Controller CityHall•1 Dr.CarltonB.GoodlettPlace•Room316•SanFranciscoCA94102-4694 FAX415-554-7466 Digitized by the Internet Archive 2014 in https://archive.org/details/departmentofchil1200sanf INTRODUCTION BACKGROUND In August 2004, the San Francisco Chronicle reported that the San Francisco Neighbors Resource Center (center) and its principal founder, Julie Lee, allegedly used a $500,000 state grant to the center to make improper campaign contributions for the 2002 campaign of former California Secretary of State Kevin Shelley. The newspaper also reported that the center received $200,000 in funds from the City and County of San Francisco (City), but that the center provided few services in return. In response to the newspaper articles, the City's mayor requested the Office of the Controller to conduct an audit of the center to determine if the center had improperly spent any city funds. The center is a California non-profit organization whose stated mission was to bridge the information gap between the people with needs and the resources available to those people with needs. According to materials published by the center, due to language and geographic barriers, many of these people are unable to find the information and resources they need to resolve their problems. According to the center, it provided referral services, activities and daycare for the youth of the community, and facilitated medical and other services for the senior community. To further assist its clientele, the center indicated it intended to construct a service center to provide a low cost, or free, facility for other public benefit agencies to locate their services within the center's service area. In June 2000, the City granted the center a lease for a city-owned parcel of property located at 2350 19th Avenue at an annual rent of $1 .00 to facilitate the center's proposed services to the community. The lease gave the center options to renew the lease each year for $1.00 with the City's concurrence. In July 2000, the center received a grant from the City's Department of Children, Youth and Their Families (department) to provide a referral program for community services known as the Community Resource and Referral Program. The center was to research and compile a database of both public and private organizations that provide programs and services to children, youth and families located throughout San Francisco, such as child care, after-school programs, extracurricular education programs, and high risk youth counseling. The center was to establish a call-in line to provide referral services and to market and advertise the call-in line to create awareness of the service. 1 For fiscal year 2000-2001 the department granted the center , $50,000 to operate the referral program, and the City renewed the grant for the next three and a half years, funding the center for a total of $167,998. According to the grant, the center was to provide referral services to parents for programs to help their children and families and to serve 150 children and youth, ranging in age from to 17 years of age, during the year. SCOPE AND METHODOLOGY The purpose of our review was to determine whether the center used city funds in accordance with the provisions of its grants from the City. To conduct the financial review, we examined applicable terms of the nonprofit's grants with the City and various programs and financial records, including payroll records, bank statements, We and expenditure vouchers. then selected and analyzed payments made by the City. To evaluate whether the center provided the services required under the grant, we reviewed client intake logs and log sheets used by the center. To evaluate the center's compliance with other requirements in the city grants, we compared a sample of invoices submitted by the center for reimbursement of expenditures, and we traced the charges to supporting documents. In our review, we mainly relied on documents provided by the center's attorneys and we cannot be certain that the center provided all relevant records. We performed a detailed examination of invoices that the nonprofit submitted to the City for reimbursement by examining, on a sample basis, the financial records and documentation the nonprofit maintained in support of the invoiced amounts. However, the nonprofit did not have, or make available to us, all of the financial statements, general ledgers, check registers, bank statements, and supporting documentation that we requested to complete the review. Our analysis was based solely on records and documents submitted by the center's attorneys. 2
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