San Francisco homeless nonprofit was 'irresponsible' with $240 million of ... trends now
Auditors have slammed a homelessness nonprofit in San Francisco for being 'careless and irresponsible' with $240 million of taxpayer money, in the latest scandal to rock California's bloated charity housing sector.
HomeRise, one of the city's main providers of homeless housing, 'misused' funds, lacked financial controls and engaged in other practices that 'heightened the risk of fraud,' says a damning city report.
It's the latest in a slew of revelations about waste in California's so-called 'homelessness industrial complex' — a gravy train of funders, officials, and shelter owners more keen on swallowing public funds than solving the problem.
Adam Andrzejewski, CEO and founder of the transparency watchdog OpenTheBooks, on Monday slammed HomeRise, which runs 1,500 units across 19 properties on a $34 million annual budget.
Homelessness jumped 6 percent to more than 180,000 people in California last year, federal data show
This HomeRise development in Mission Bay, San Francisco, houses 140 adults who are getting off the streets
The city's current deals with HomeRise cover more than $240 million in payouts, including $110 million in loans to develop or upgrade properties, $90 million for operations, and more than $40 million in grants for support services.
'It's unclear exactly how much of the $240 million grants, loans, and subsidies was misused,' Andrzejewski said.
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'But what is clear is that this company should never have been trusted with public funds.'
The Department of Homelessness and Supportive Housing and Mayor's Office on Housing and Community Development asked for the audit in 2022 after discovering issues with HomeRise's books.
They hired Sjoberg Evashenk Consulting to probe its finances.
Auditors found 'unallowable, imprudent, or questionable spending' by HomeRise that broke rules about using city dollars for fundraising, paying staff bonuses, and providing lunches and gifts to staff.
At the start of last year, the nonprofit had 118 active credit cards in use, many with limits exceeding $10,000 that were easily abused, auditors said in their report, which was released earlier this month.
They also found that HomeRise gave out 'signing bonuses' to staff who had been at the nonprofit for years.
One staffer got an $87,000 or 74 percent pay bump in the span of just nine months, they found.
Mayor London Breed says the city's homelessness system needs more 'transparency and oversight'
Other controversial costs included $12,500 for a social event.
The big payouts came even as the nonprofit lost millions of dollars because its mismanaged buildings were sitting empty.
In July 2023, two of its buildings in the gritty Tenderloin district were about one third empty.
Vacancies not only lost the company revenue but also 'represent missed opportunities to provide unhoused people with permanent, supportive housing,' auditors said.
Auditors said the charity was badly run and suffered from an 'alarming rate of turnover.'
But rather than cut off city funding to HomeRise, city agencies were instead urged to strengthen oversight of their
