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Controller presents nonprofit monitoring report; committee presses for clearer oversight and outcomes
Summary
The Controller's Office presented the FY24/25 citywide nonprofit monitoring and capacity building report, reporting 206 monitored nonprofits covering $1.4 billion in city funding, about 72% meeting standards after monitoring, and identifying audit delays, cash flow and cost allocation as common issues; the committee continued the item for follow up.
Vice Chair Janie Sauter convened a hearing Dec. 4 on the citywide nonprofit monitoring and capacity building program and the Controller's FY24/25 annual report. Laura Marshall of the Controller's Office presented program components, monitoring results and implementation plans for a new contract monitoring policy.
Marshall said fiscal monitoring covered 206 nonprofits that received about $1.4 billion in city funding last year (about 87% of city spending to nonprofits); of those, 72% met monitoring standards by the end of the cycle and 49 nonprofits had one or more findings. She said the most common findings involved late audits, cash flow constraints, cost allocation issues and gaps in board oversight. "So 206 nonprofits in our pool last year and, as I mentioned, that's 87% of all of our spending that's going to nonprofits," Marshall said.
Marshall described a newly implemented contract monitoring policy (policy set in December 2024, milestone implemented July 1, 2025) that requires departments to monitor contracts expected to exceed thresholds; she said the initial policy captured more than 1,200 contracts and about 300 nonprofits in scope for future contract monitoring. Marshall said departments' submitted policies were categorized as exemplary, strong (needing refinement), or developing and that the Controller's Office will continue implementation and training for departmental monitors.
On corrective action, Marshall said the office designated 14 nonprofits to tier 2 and 2 to tier 3 for fiscal year 2025 and that corrective action plans, milestones and capacity building supports are deployed to help organizations improve. She said the office provided capacity building to 12 nonprofits in the past year and that scaling such supports is constrained by contract and budget limits.
Supervisors asked whether monitoring could have detected high'profile failures such as Parks Alliance; Marshall replied monitoring is not an audit and may not detect deliberate misrepresentation without referral to audit teams, and she recommended strengthening monitor training and referral processes. Committee members also asked about public dashboards (the office currently publishes findings in its annual report but not a live dashboard) and about waiver criteria for good performance waivers; Marshall described waiver eligibility factors and said waivers are time limited.
Public commenters urged the office to incorporate outcome measures into monitoring, improve transparency and communications with nonprofits, and prioritize consolidation and support for smaller contractors. After discussion the committee voted to continue the item to the call of the chair for further work and follow up with departments.
