Office of the City Attorney : the allegation about misuse of city grant funds against the Tenderloin Neighborhood Development Corporation has no merit

18 Pages·2001·0.55 MB·English

by  San Francisco (Calif.). Office of the Controller. Audits Division

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EdwardHarrington
Controller
MatthewH. Hymel
ChiefAssistant Controller
December 3, 2001 Audit Number 01035
Louise Renne, CityAttorney
Office ofthe CityAttorney
1 Dr. Carlton B. Goodlett Place, Room 234
SanFrancisco, California 94102
Dear Ms. Renne:
The Controller's Audits Divisionpresents its report on the investigation ofan allegation
that the Tenderloin Neighborhood Development Corporation (corporation) misused grant
funds from the City and County ofSan Francisco (City). At the request ofyour office, we
investigated an allegation by a city official that the corporation illegally diverted City
funds to the Lower Eddy/Leavenworth Task Force (task force), which in turn gave money
to the San Francisco Study Center (study center), publisher ofthe Central CityExtra
newspaper.
Our investigation found that the allegation has no merit. The Cityhad awardedthe
corporation a grant that would, inpart, fund anewspaper designed to inform residents and
tourists about events and activities available in the Tenderloinneighborhood. Using a
competitive process, the task force, a neighborhoodbody ofresidents, merchants, and
social service providers, selected the study center as the most qualified publisher and
granted funds to the organization for the production ofCentral CityExtra, a newspaper
about events and activities in the Tenderloin.
Respectfully submitted,
Edward Harringto:
Controller
.4-7500 CityHall•1 Dr.CarltonB.GoodlettPlace•Room316 •SanFranciscoCA94102-4694 FAX[phone]

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SUMMARY
RESULTS IN BRIEF
Our investigation found no merit in arecent allegation related to
grant funds that the City and CountyofSan Francisco (City) had
awarded to the TenderloinNeighborhood Development
Corporation (corporation). At the request ofthe Office ofthe City
Audit Highlights
. . Attorney, we investigated an allegationby a city official that the
Ourauditrevealedthe corporation illegally diverted the grant funds to the Lower
following: Eddy/Leavenworth Task Force (task force), which thenprovided
moneyto the San Francisco Study Center (study center), publisher
ofthe Central CityExtra newspaper.
An allegation made
against the
We
Tenderloin found that the corporationproperly funded the study center's
Neighborhood publication ofthe newspaper. The corporation received a grant
Development from the City's Convention Facilities Management Division to
Corporation has no
carry out the Lower Eddy Street Revitalization Program. One of
merit.
this program's projects was to implement the cultural activities
EI The corporation program, which includes efforts to inform residents and tourists
complied with about events available in the Tenderloin. Part ofthe effort involved
applicable publishing a monthlynewspaper. Through a competitive process,
provisions ofits
the task force awarded funds to the study centerto publish the
grantagreement
newspaper.
with the City.
In addition, we reviewed invoices and other documentation to
support the expenditures relating to the newspaper and found the
expenditures adequate, proper, and allowable.

INTRODUCTION
BACKGROUND
The Office ofthe CityAttorney asked the Controller's Audits
Division to investigate an allegation that the Tenderloin
Neighborhood Development Corporation (corporation) misused
A
city funds. city official alleged that the corporation illegally
diverted city grant funds to the Lower Eddy/Leavenworth Task
Force, which in turnprovided money to the San Francisco Study
Center (study center), publisher ofthe Central CityExtra
newspaper.
The mission ofthe corporation, which is anonprofit organization,
is to make the Tenderloin neighborhood abetterplace to live for
low-income people byproviding safe, service-enriched affordable
housing andby cooperating in communityimprovement and
development efforts. The Tenderloin district ofSanFrancisco runs
from Market Street on the south to Post Street on the north, and
from Powell Street on the east to VanNess Avenue onthewest.
In 1998, the City and County ofSan Francisco (City), through the
Convention Facilities Management Division (Convention
Facilities), entered into a grant agreement with the corporation.
The City agreed to provide grant funds to the corporation so that it
could implement the LowerEddy Street Revitalization Program in
the Lower Eddy Street Corridor, north ofMarket Street. This
program encompasses facade improvement, public safety, cultural
activities, and development ofa convention facility orpavilion.
According to the grant agreement, the cultural activities are to
include informing residents and tourists about the diverse events
and activities available in the Tenderloin, publishing amonthly
newspaper ornewsletter, involving Tenderloin residents in
identifying andpublicizing their cultural contributions to the
neighborhood and to the City at large, developing walking tours to
promote the Tenderloin neighborhood, and creating cultural and
historic art, such as tiles, public art, murals, and awalk-of-fame.
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