San Francisco city departments are leaving tens of millions of dollars in unspent — and, often, unaccountable — funds every year after billing one another for services, according to a new city report published Monday.
The report suggests that, at a time when San Francisco is facing an $818 million deficit, basic fiscal transparency measures are still not the norm across a city with a $16 billion budget.
“At a time when the Mayor is proposing drastic cuts to our most critical social services, and trust in government is fragile, the City must hold itself to the highest standards of accountability,” wrote Supervisor Jackie Fielder, who is pressing for a hearing on the report from the San Francisco Budget and Legislative Analyst.
The report revealed that, since 2018, city departments have left between $53 million to $80 million in unspent “work orders.” Certain departments routinely bill others for their services: The Public Utilities Commission, for instance, might pay the Department of Public Works for installing new sewer lines, and the City Attorney’s Office might bill departments for legal services.
But today’s report alleges that they do not budget these funds well, and the leftover funding, which carries over into the next fiscal year, is hard to track. The Board of Supervisors also lacks oversight over how, why, and where the unspent money is used, according to the report.
“There is insufficient transparency … for these funds being carried forward year to year,” said Dan Goncher, policy analyst at the Budget and Legislative Analyst’s office. Unspent funds are tied to specific projects or agreements within each department, and only department finance staff usually know the details.
The use of overbudgeted “work orders” is growing: Between fiscal years 2018 and 2022, the unspent funds grew from $53 million to $76 million, a 43 percent percent increase.
When departments submit inflated budgets, it also hamstrings elected officials’ ability to plan for the future, per the report. “Ongoing and increasing overbudgeting for interdepartmental services causes overall budgetary inefficiency and ties up funding … that could otherwise be budgeted for and spent on other programs or services.”
Though the report did not detail instances of possible wrongdoing, the practice can lead departments to overbudget the “work orders,” and use the unspent funds for positions that have little rationale.
In one case, “five departments shared the cost of a director-level position,” but “none of the departments were able to provide our team with documentation showing the need for the position or rationale for the funding arrangement.” In another case, one department was funding the equivalent of about 15 positions in a second department, and staff “initially questioned” whether that was allowed.
A third case involved “one department reimbursing another for a position functionally based in the second department but authorized and funded in the first.”
Oversight of these unspent funds is tricky, because some funds must return to the city’s general fund, while others can be carried forward within the department indefinitely. Goncher said that the Mayor’s Budget Office hasn’t closely reviewed these funds, making it unclear whether some can be reallocated by the Board of Supervisors for other needs.
The Budget and Legislative Analyst looked into three departments: the Controller’s Office, which greenlights any such billings, the City Attorney’s Office and the Department of Public Works, two departments that offer services to other arms of the city.
It also looked into the Mayor’s Budget Office, which holds conversations with all city departments regarding their budget proposals.
Some other key findings from the report are:
- Departments, such as the City Attorney’s Office, routinely bill for services months after the work is done.
- Public Works frequently fails to provide detailed breakdowns of how much it will cost departments to maintain their facilities, making it hard to track funds.
- There is no documented and standardized process to review interdepartmental expenditures, causing inconsistency and inefficiency across all departments.
- City departments are skirting Board of Supervisors’ oversight by funneling funds for their positions through other departments.
The report is now heading to the Government Audit and Oversight Committee. Supervisor Fielder, who chairs the committee, is hoping for a hearing, which is a common next step for any audit released by the Budget and Legislative Analyst.
Fielder’s legislative aide Preston Kilgore, for his part, underscored the report’s timeliness: Mayor Daniel Lurie is required to present his initial budget on June 1.
hire more contract compliance officers! get a civil service commission that actually does its job! listen to unions!
when city agencies are a dept’s clients, $$ of goods/services are set in contracts. office of contract admin tracks expenditures & funds remaining. controller notifies depts of fiscal deadlines. $$ should be returned to general fund or alt funding source.
it’s all public info. pull threads of disgraced dept heads (sheryl davis, mohammed nuru, roDBIgo santos, naomi & harlan kelly, micki callahan, etc.), unravel extensive corruption in the mayoral orbit for decades. bring forth consequences…
DPW charges 40% over the cost of a project. Want a new building? Get out those bond fund dollars because a $10M building is $14M before they even break ground. Then you pay more for the added costs as they pile up- because they missed some of the important details.
There is no such thing as competitive bidding either- not for city departments. DPW runs the show even though they’re the most expensive outfit in town. They build you a building they want, not what you want, and they don’t bother to fully understand your needs- so when they’re done you’ve got something that isn’t what you wanted or needed. And the taxpayer services the debt for 30 years.
Very interested to see more analysis of what is being spent where.
Off topic but not unrelated, the lawsuits brought by tech companies could be dropped and our city’s deficit would be cut in HALF.
The audacity of companies like AirBnB to sue the city where they made their millions is just disgusting.
Then again, maybe the City should stop doing illegal things.
City departments should be held accountable and also taxpayers should be able to have quick access to see where each and every dollar is spent .
The vague released reports and lack of ability in real time to see where the money going needs to be seen .
City government still puts up many barriers to access by concerned citizens .
The game needs to change .
Do see Trump will require medicaid recipients to be employed .
City of SF taxpayers should not be expected to cover all noninsured .
Either cover insurance for every citizen here but dont expect hardworking taxpayers to pickup the medical bills and costs for those who refuse to work , hang out all day on the streets in the Tenderloin , getting high and wasting their lives away .
I’m not giving more money to addicts .
They need to wake up and get ajob . May not be able to remain here to get high .
May need to move where the jobs are .
Get real.
Otherwise I go pitch a tent in Beverly Hills.
Cannot keep milking the taxpayer
This smells like London Breed and Ed Lee.
You mean Willie Brown.
This kind of thing is all by design. SF Gov’s corruption is structural at this point. Can it be undone?
Lurie is the test case. I’m holding my breath for sure!
Virtue from Billionaires?
…..and it stinks……like rancid roquefort.
Politicians are all crooks, meanwhile in SF they just keep asking for more
and more money then they tax the crap out of it’s citizens.
The SF buget, at least since Prop 13 has been impenetrable. No one more adept promoting herself by hiding the numbers than London Breed. One of these days our fearless leaders might realize that you cant spend what you dont have, and that the money to spend come from taxes. Duh
This is great reporting, well done and thank you. Would love to see more on this.
As a palate cleanser after the preceding super sincere remarks I’ll add the snarky cheap shot: do they have the same problem in Zurich?
Zurich… Zurich…
DPW is amazingly inefficient and consumptive of funds for very very little productivity. The absence of accountability allows the poor leadership, selected for sociopolitical reasons primarily, to do what they want and the workers to be overworked, or not work much at all.
If we don’t spend it today we can still spend it tomorrow, right? Right?
Our “overwhelming deficit” is less than the yearly budget of SFPD. Cut that in half and in a couple of years the deficit is gone. Why in god’s name does a city the size of San Francisco need to spend $850 million a year on policing? It’s a scandal. And talk about no accountability for how the money is spent–I’m guessing padded out outrageous overtime pay is part of the problem–there is no transparancy in the Police Department budget and this needs to be looked into deeply.