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Politics & Policy

‘Serious concerns’: San Francisco homelessness department grilled over nonprofit scandal

San Francisco Supervisor Catherine Stefani of District 2 listens during a 2019 board meeting. | Santiago Mejia/San Francisco Chronicle via Getty Images

San Francisco supervisors grilled the homelessness department on Thursday over a nonprofit accused of mismanaging funds and disregarding city protocol last year. 

Prompted by an audit that placed the United Council of Human Services on a red flag list, the Department of Homelessness and Supportive Housing has stripped the organization of its contracts until it regains good standing with the state Attorney General’s Office. 

But at a Thursday committee hearing, members of the Board of Supervisors probed the department over its decision to allow the Felton Institute, which is dealing with controversies of its own, to take over the charity’s operations. 

Moreover, Supervisor Catherine Stefani questioned how the department and the Controller’s Office plan to prevent the city from being caught blindsided by other nonprofits. 

One month before an audit pointed to mismanagement at the United Council of Human Services, another nonprofit called Baker Places came forward to ask for an emergency financial bailout for four of its programs. 

The city flagged its findings about the United Council of Human Services to the FBI and the District Attorney’s Office as a criminal matter.  

“I have serious concerns as to how the city is managing our contracts with nonprofits,” Stefani said. 

The city distributes about $1.5 billion to over 600 nonprofit organizations annually, according to the Controller’s Office. But the city’s oversight of that spending has fallen under scrutiny amid numerous scandals. 

Performance reports obtained by The Standard show inconsistent monitoring practices that seemingly overlooked underperforming programs. 

The United Council of Human Services had cycled through four different fiscal sponsors since 2017, and the city had previously pulled contracts for the organization in 2009 after finding issues with the organization’s bookkeeping. 

The organization’s CEO, Gwendolyn Westbrook, is facing a lawsuit from a former employee who alleged that she misused funds to support her own lifestyle. 

The Department of Homelessness and Supportive Housing said previously that it had maintained its relationship with the organization because it holds strong community ties to the Bayview neighborhood, making it uniquely positioned to provide services. 

In April, the department tapped the Felton Institute to take over for the scandalized charity due to its familiarity with its programs and ability to take over operations expediently. 

Employees of the Felton Institute have recently accused the organization of disciplining, harassing and surveilling employees looking to expand union representation. Board President Aaron Peskin threatened to impose consequences on the nonprofit at a recent hearing if the situation isn’t fixed. 

At Thursday’s hearing, the homelessness department said that if the United Council of Human Services comes into compliance with the state’s financial reporting requirements, the city may revisit their partnership. 

David Sjostedt can be reached at