Money meant for crime prevention education programs was used for luxury gifts, trips to Lake Tahoe, and limousine rides, among other things. This is in violation of grant terms that exclude “personal or business-related costs or expenses related to meals, catering, transportation, lodging, fundraising or education activities.”
Evidence of improper spending amounted to about 9 percent of the $910,000 in total grant funds paid to SF SAFE—a nonprofit hired to provide community services and act as a liaison between residents and police—over the nine months, according to the report.
With the assessment reviewing invoices from the first three quarters of the fiscal year, officials suggested that more instances of impropriety could be discovered with a more thorough review of past years.
“The total amount of ineligible and/or excessive expenses for the entire term of the grant agreement is likely significantly higher than what we found for our nine-month assessment period,” the report reads. “We recommend that the Police Department review all invoices submitted under its grant agreement with SF SAFE to determine whether SF SAFE billed for expenses that are unallowable under the agreement and recover any amounts found to be incorrectly paid.”
San Francisco first awarded grants to the group in 2018, with subsequent extensions through 2023, and a one-year agreement totaling just more than $1 million expiring July 2024. The city can then extend the terms again for up to four years.
The report states that the police department failed to review invoices to determine if the expenditures were permittable. Before documents were requested as part of the review process, the department did not have documentation for more than $3.8 million in expenditures, equaling about 72 percent of the total amount paid to the nonprofit.
“Thus, without our assessment, the Police Department would have been unable to identify the ineligible expenses we identified,” the report reads.
Improper expenditures include a symposium in Lake Tahoe hosted in October 2022 by SF SAFE that provided some attendees—including city employees from the police department and the district attorney’s office—with various prizes and gift boxes.
More than $32,000 was spent on 200 such gift boxes from Olive and Grey—a luxury gift company in Maryland—containing loose leaf tea, a mug, and a portfolio, among other things.
The group requested and received partial reimbursement of more than $8,000 to pay for the boxes.
Another $228,105 was spent with Olive and Grey on gift boxes at a cost of $152 each for a Black History Month and Lunar New Year Celebration party held in February 2023.
Grants from the police department covered $25,000 of the boxes, as requested by the nonprofit.
Ineligible parking expenses totaling nearly $22,000 were also uncovered. Some of the expenses are for parking contracts in the executive director’s name, with two of the locations outside of San Francisco—in San Leandro and El Cerrito.
Another $5,180 in valet parking fees accrued at an exclusive private club in the city known as The Battery were also flagged during the review.
Personal and office expenses also came under scrutiny, with officials concluding that some items appear to be unrelated to providing crime prevention education services. Such include nearly $500 for water delivery, more than $200 for household items including pest control and rust removal products, and membership fees for Amazon and Costco.
More discrepancies could be uncovered with a comprehensive review, the report found.
“The actual amount of such expenses may be higher because we were not provided with all the invoices that would be needed to support the expenses incurred,” the report reads. “Arriving at the actual total would require a thorough, line-item analysis of each invoice.”
Acknowledging the shortcomings outlined in the report, San Francisco Police Chief William Scott said problems arose because of persistent staffing shortages.
“Since 2019, SFPD’s fiscal division has had up to five vacancies and limited capacity due to the impacts of the pandemic, resulting in no monitoring to ensure appropriate expenditures,” Mr. Scott wrote in a letter to the controller’s office.
Money illegitimately collected by SF SAFE will be recouped through the existing agreement, while more oversight will prevent similar failings in the future, he said.
“Ineligible expenses identified in the Controller’s Office assessment will be recovered from the current year grant,” Mr. Scott wrote. “The Department has also taken steps to ensure only eligible costs are invoiced and paid in the future, including telling SF SAFE that it must improve its accounting practices and undergo remediation steps in partnership with the city.”
The nonprofit was also referred to the city’s nonprofit monitoring program to develop and implement an action plan to address issues outlined in the report.
“We take these findings seriously and are committed to implementing immediate corrective measures to address the issues identified,” Dylan Hackett, an attorney representing the nonprofit, wrote in a letter to the controller’s office responding to the report.
SF SAFE did not respond to a request for comment by press time.
