Public Integrity Audit Finds SFPUC's Social Impact Partnership Program Is Poorly Designed and Monitored

San Francisco, CA (December 9, 2021) —  The Controller’s Office has released a public integrity audit report that finds serious shortcomings in the San Francisco Public Utilities Commission’s Social Impact Partnership (SIP) Program, also referred to as the Community Benefits Program. The report shows how a lack of clear processes and policies allowed contractors to renege on “good neighbor” commitments to communities affected by SFPUC services. The contractors made these commitments in their proposals to gain extra points in SFPUC’s contract solicitation processes for certain projects. The audit found that some commitments made to communities were later reduced or were disregarded altogether. 

The lack of clear policies to guide the program, which was created in 2011, created an environment that increased the risk of conflicts of interest, inappropriate directing of funds, and other abuses, although the audit did not find that any abuse occurred. In the last decade, SFPUC has awarded many contracts to firms partly based on their SIP pledges to give back to affected communities, but has not developed a method to enforce these contractual commitments, which helps explain why some of them went unfulfilled by the end of the contract term. In the program’s ten years of existence, contractors have committed nearly $22 million, 82,000 volunteer hours, and nearly $1 million in in-kind services to communities. Two-thirds of these contractor commitments are unfulfilled, although many are scheduled to be provided over the next decade. Two-thirds of these contractor commitments made since program inception are currently unfulfilled, although many are scheduled to be provided over the next decade. Since 2011, of 22 expired contracts, 7 had commitments that were unfulfilled. The foregone community benefits for these 7 contracts are valued at more than $685,000. As of December 30, 2020, 62 of the 84 contracts with SIP commitments were active. Total benefits of $25 million are still owed on these contracts. Improvements to the program will help ensure these commitments are met.

This audit is the eighth in the series of public integrity reviews issued by the Controller’s Office in partnership with the City Attorney’s Office. This series of reviews was prompted by the arrest of former Public Works Director Mohammed Nuru on charges of defrauding the City and County of San Francisco by soliciting and accepting bribes in exchange for favorable treatment in city contracting. Former SFPUC General Manager Harlan Kelly was criminally charged in November 2020 with providing advantages in city contracting processes in exchange for bribes.

 

Download the full report here.

View the press release.

 

Public Integrity Infographic

 

What happens next?

Our review of inadequate policies and procedures that were exposed by the federal criminal charges against Mohammed Nuru and other city employees and contractors will continue, with future assessments on contracting at the San Francisco Public Utilities Commission and citywide ethics reporting. The need for additional assessments will be determined as the investigation progresses.

Tips

Investigators from the Controller’s Office consider every allegation of wrongdoing raised by city employees and members of the public. To report suspected public integrity abuses related specifically to the Mohammed Nuru investigation, please contact the Public Integrity Tip Line. You can provide information by:

All tips may be submitted anonymously and will remain confidential. Reports to this tip line, as well as tips to the Controller’s whistleblower hotline, are critical to the City’s ability to fight abuses and lapses of public integrity by city employees and contractors. As provided for by the San Francisco Charter, the Controller’s Whistleblower Program ensures complaints are investigated by departments with the appropriate jurisdiction and independence from the alleged wrongdoing.   

Information on city payments, searchable by department and vendor, are available on the Controller’s public transparency website at openbook.sfgov.org. Anyone may file any allegation of improper or illegal public activity with the City’s Whistleblower Program at sfcontroller.org/whistleblower-program. That program, administered by the Controller’s Office, often partners with the City Attorney’s Office on investigations.

For questions, please contact City Controller Ben Rosenfield at ben.rosenfield@sfgov.org.

For all press inquiries, please contact Communications Manager Alyssa Sewlal at alyssa.sewlal@sfgov.org.

 

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About the Office of the Controller

The Controller's Office works to ensure the City's financial integrity and to promote efficient, effective, and accountable government. We strive to be a model for good government and to make the City a better place to live and work. The Controller's Office is responsible for governance and conduct of key aspects of the City's financial operations, including operating the City's financial systems and issuing its financial procedures, maintaining the City's internal control environment, processing payroll for city employees, managing the City's bonds and debt portfolio, and processing and monitoring the City's budget. The department audits and produces regular reports on the City's financial and economic condition and the operations and performance of city government.