Grand jury urges overhaul of nonprofit grant procurement; supervisors request mayor's reforms

The Government Audit and Oversight Committee on Sept. 18, 2025, heard the civil grand jury's "Capacity to Serve: Setting Social Services Nonprofits Up for Success" report, which found that an overcomplicated grant procurement system, uneven department capacity and inadequate tools are hindering timely and effective use of more than $1 billion in nonprofit-contracted social services. The committee filed the hearing and sent a response resolution to the full Board of Supervisors.

The jury's presenter, Nicholas (Nick) Weininger, described three core problems: insufficient nonprofit management capacity to handle large, complex contracts; procurement rules that have become fragmented by repeated carve-outs; and monitoring and audit systems that can take years to correct serious nonprofit mismanagement. "When we looked into this... we talked to a lot of people across the city," Weininger said. "There's a lot that requires first-principles thinking about procurement with integrity and efficiency."

Why it matters: City departments now route roughly a billion dollars a year through nonprofit contracts (about 20% of social-services spending, the jury said). Delays in awarding contracts, unclear procurement rules and outdated or siloed grant-management software slow the delivery of essential services to vulnerable residents, the jury concluded.

Key facts from the hearing

- Scale of spending: Supervisor Sherrill cited the jury's overview noting San Francisco now spends roughly $5 billion on social services overall, and that about 20% (more than $1 billion) is delivered via nonprofit contracts.

- Procurement complexity: Weininger and several departmental witnesses said the Administrative Code and repeated emergency carve-outs create multiple pathways and exemptions that in aggregate make procurement harder and slower. The jury recommended a first-principles ordinance to simplify grant-making procedures rather than continued piecemeal exceptions.

- Department and technology capacity: Mayor's Budget Director Sofia Kittler and city administrators said staff are skilled but hampered by processes and inconsistent or customized grant-management systems across departments. Kittler described efforts underway to staff up Office of Contract Administration and GovOps and to centralize procurement principles and tooling.

- Monitoring and corrective action: Laura Marshall of the Controller's Office described the annual fiscal-monitoring cycle and explained that many monitoring reviews are "point-in-time" assessments. When departments identify problems they may open corrective-action plans; some more serious cases can take many months or years to resolve because audits and forensic accounting are time-consuming.

Public comment and stakeholder remarks

Nonprofit leaders told the committee that increased reporting and monitoring burdens come while organizations face rising administrative costs and staffing stress. Rocio Molina, director of the San Francisco Human Services Network, thanked the controller and mayor's office for engagement and cautioned that heightened reporting requirements increase administrative strain for nonprofits operating with tight budgets.

Actions taken at the hearing

- The committee amended the proposed response resolution and then voted to forward item 4 (the resolution responding to the jury) to the full Board of Supervisors with a positive recommendation (recorded votes: Vice Chair Janie Sauter, aye; Member Steven Sherrill, aye; Chair Cheryl Felder, aye).

- The committee voted to file the hearing on the Capacity to Serve report (item 3) (recorded vote: Vice Chair Janie Sauter, aye; Member Steven Sherrill, aye; Chair Cheryl Felder, aye).

What the committee asked departments to do

Supervisors asked the mayor's office, the city administrator and the controller to work on a holistic plan that blends technology upgrades, clearer procurement principles and targeted staffing or capacity-building at departments that manage grants. The mayor's office said it is piloting centralized procurement principles, increasing Office of Contract Administration staffing and exploring interoperable grant-management software to reduce duplicative, highly customized systems.

Ending

Committee members said the report highlights a balancing act: tighten oversight and public trust while limiting burdens that reduce the ability of nonprofits to deliver essential services. The committee advanced a response to the presiding judge and referred policy and budget follow-up to future hearings and the Board budget process.