SF Homeless Services Provider Accused of Nepotism, $100k Fraud

A San Francisco homeless services provider accused of falsifying $105,000 in invoices is cut off from future city funding, the city attorney’s office said in its latest move against alleged nonprofit fraud.

Providence Foundation of San Francisco never carried out shelter maintenance work that it billed for, an investigation by City Attorney David Chiu’s office found, adding that the misused taxpayer funds remain unaccounted for. The investigation also found that the foundation violated its contracts with the city despite warnings over nepotism and other offenses.

Providence denies the allegations, calling them “unfounded and baseless,” according to Vernon Goins, an Oakland-based attorney representing the foundation. Goins said the nonprofit is cooperating fully with the investigation “and will take remedial action where appropriate.”

“The Providence Foundation of San Francisco is confident that it will successfully prove that it never engaged in any willful misconduct as to any city grant or contract,” Goins wrote in an email to KQED.

Chiu announced Monday that he launched debarment proceedings against Providence while immediately suspending it from bidding on or receiving new contracts or grants from the city.

“There’s a difference between having challenges with financial compliance and intentionally defrauding the city and its taxpayers,” Chiu said in a statement. “My office’s work to root out bad actors who take advantage of our public resources continues. We will find out about your misdeeds, cut off your funding, and hold you accountable.”

The action follows rising scrutiny of the city’s nonprofits in recent years and comes on the heels of a city audit released last month that found HomeRise, a leading developer of housing for people exiting homelessness in San Francisco, has been “careless and irresponsible” with taxpayer money, spending $12,500 on a social event and handing out $200,000 in bonuses, among other improprieties.

Providence’s contracts with the city, through the Department of Homelessness and Supportive Housing, include one to run the Oasis Hotel, a shelter for families experiencing homelessness; another to run a navigation center; and others to operate supportive services and housing voucher programs, according to Chiu’s office.

The alleged fraud involves falsified invoices related to maintenance at the Oasis Hotel. The city attorney claims the hotel was never painted nor had locks removed as reported on invoices, which also allegedly list a false contractor’s license number.

Providence Foundation Executive Director Patricia Doyle signed off on these bills, according to Chiu’s office, and should have known they were fake.

“The lack of new exterior paint is obvious to any person who views the Oasis, let alone the executive director and director of operations of the nonprofit in charge of operating the hotel,” according to a press release from the office. “In fact, a facilities report that the city commissioned after the Oasis had purportedly been painted lists ‘exterior paint’ as one of the shelter’s most pressing needs due to rust and fungus on the exterior of the building.”

Chiu is also accusing the nonprofit of hiring “members of at least seven different families,” including children of the executive director and vice president of the board, in violation of the anti-nepotism provision in the grant agreement.

The Department of Homelessness and Supportive Housing called Providence out on its hiring practices and other contract violations starting in March 2023.

“HSH has received complaints from Providence staff about personnel mismanagement, personnel oversight and inappropriate hiring practices,” one letter to the nonprofit reads. The letter also lists complaints of wage theft, inadequate staffing, nepotism and accusations that Providence Foundation Director of Operations Kenisha Roach video-recorded guests and staff at the Oasis without permission during private conversations.

Providence could be barred from getting city contracts or grants for up to five years through the debarment process, which is an administrative rather than legal procedure and is expected to take several months. At the city attorney’s request, the controller will appoint an independent hearing officer to hear arguments from both sides and decide. Debarment requires a finding of “willful misconduct.”

The suspension will stay in place until the debarment proceeding is resolved. It doesn’t put an end to Providence’s current city contracts but could be grounds for terminating them.