San Francisco Sun

An audit report released by the San Francisco Controller’s Office has uncovered serious financial and compliance issues within city-funded nonprofit HomeRise, a key provider of affordable housing for unhoused individuals and families in the city. Controller Greg Wagner expressed deep concern over the findings, stating, “Diverting any portion of city funding to questionable uses when it's earmarked to benefit residents is careless and irresponsible.”

The audit revealed disturbing practices at HomeRise, including improper financial transactions and wasteful spending. HomeRise was found to have improperly transferred $2 million from a restricted account without approval and borrowed an additional $2.5 million from a property’s operating account to cover corporate payroll charges. A significant portion of this debt remained unpaid as of August 23, 2023.

Moreover, a review of HomeRise’s expenses unveiled questionable expenditures that deviated from the intended use of city grant funds. The organization was reported to have spent money on activities such as fundraising, staff bonuses, and staff lunches and gifts. Staff bonuses totaling over $200,000, charged to properties, exacerbated cash flow issues for HomeRise.

The Controller’s Office highlighted various operational costs that were inappropriately allocated by HomeRise, including temporary rental charges, salaries for tenant program services staff, and expenses for a social event. These costs were deemed unplanned, unbudgeted, and, in some cases, questionable.

In response to the audit’s findings, the Controller’s Office has issued nine recommendations to the Mayor’s Office of Housing and Community Development (MOHCD) and the Department of Homelessness and Supportive Housing (HSH). These recommendations aim to address the identified problems and ensure that HomeRise implements stronger operational and fiscal management practices.

Moving forward, HomeRise must demonstrate swift and consistent progress in rectifying the issues outlined in the audit to fulfill its commitments and maintain its partnership with the City of San Francisco.