Supervisor Peskin convenes Dreamkeeper hearing after allegations; controller launches audits and HRC pauses new awards

San Francisco — The Government Audit & Oversight Committee held an extended hearing Oct. 17 to probe allegations of misuse and weak fiscal controls connected to the Dreamkeeper Initiative (DKI), a mayoral signature program that distributed hundreds of millions in city funds across multiple departments to support Black communities.

President Aaron Peskin opened the hearing by stressing the need for transparency. “This initiative is an extraordinary undertaking,” he said, noting the city has appropriated large sums in a short period and that the committee would seek to understand spending, oversight and outcomes. Peskin asked the Controller’s Office to describe actions it has taken since allegations surfaced.

City Controller Greg Wagner told the committee his office assigned accounting support to the Human Rights Commission, initiated two formal financial audits (one focused on Prop Q purchases and one on grant agreements with Collective Impact), and recommended that the Office of Contract Administration rescind HRC’s delegated Prop Q purchasing authority pending audit results. “We have initiated two formal financial audits,” Wagner said. He added his office is accelerating post‑audit work and providing technical assistance to departments to strengthen controls.

DPH and OEWD described programmatic spend and outcomes under DKI. Dr. Paula Jones of the Department of Public Health said DPH used DKI funds to expand maternal‑health, perinatal and community mental‑health services and provided counts of clients served in specific programs. OEWD Executive Director Sarah Dennis Phillips summarized workforce and small‑business initiatives (citing nearly 600 workforce enrollments in one year and support for hundreds of entrepreneurs) and said OEWD delayed a planned RFP for new DKI procurements until winter 2025 while it prepares an impact report.

Acting HRC Director Moweli Tabinho — who said he has been in the role about a month — outlined immediate administrative reforms: department‑wide Prop Q training, additional procurement ethics trainings, suspension of discretionary spending on events and programming, a new receipts and reimbursement policy, restructuring of HRC’s financial division to add capacity, and a pause on awarding new contracts while the city reviews solicitation and award processes. “We have suspended all discretionary spending on events and programming until processes can be fully implemented,” Tabinho said.

Supervisors pressed for a clear timeline to review pending awards and release funds where appropriate. Wagner told the panel that audits themselves do not automatically halt ongoing contracts, though OCA had rescinded HRC’s delegated authority for small Prop Q purchases; he said the Prop Q audit and a CBO grant audit (Collective Impact) are expected to issue findings in the winter 2024–2025 timeframe and that his office will provide monitoring and technical assistance in the interim.

Community commenters — many of them Dreamkeeper grantees — described severe impacts from paused awards and delayed reimbursements. Several speakers offered specific examples: one organization said it is owed $572,000 across three Dreamkeeper grants and warned it might have to lay off staff and vacate office space without prompt payment. Others framed the hearing in political terms, with some community members defending former HRC leadership and urging the city to restore funds quickly.

After presentations and public comment, President Peskin moved to continue the matter to the call of the chair for additional oversight hearings. The committee passed the motion, and members said they expect follow‑up meetings to track audit results, timeline commitments and departmental corrective actions.

Next steps: the Controller’s Office will complete audits and issue findings; OCA has already restricted HRC’s Prop Q delegation pending audit results; HRC will continue internal reforms and resume new awards only after a review of solicitations and awards; the committee will hold further hearings to monitor progress.