Providence Foundation illegally extracted over $100,000 of public money meant to benefit vulnerable families
SAN FRANCISCO (May 6, 2024) — City Attorney David Chiu announced today that he initiated debarment proceedings against, as well as immediately suspended, Providence Foundation of San Francisco, which prevents the non-profit from bidding on or receiving new City contracts or grants. An investigation by the City Attorney’s Office revealed that Providence defrauded the City by submitting false invoices, and as a result, at least $105,000 of public money intended to benefit people experiencing homelessness, was not used for its proper purpose and has disappeared. Providence has also violated numerous provisions in its grant agreement with the City despite multiple warnings and attempts to bring the nonprofit into compliance.
“There’s a difference between having challenges with financial compliance and intentionally defrauding the City and its taxpayers,” said City Attorney Chiu. “This nonprofit took over $100,000 of public money meant to benefit people experiencing homelessness. That cannot be tolerated. 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. I appreciate HSH’s numerous attempts to bring this nonprofit into compliance for the good of those they serve.”
Background
Providence Foundation is a San Francisco-based nonprofit started in 1996. Since 2019, Patricia Doyle has served as Providence’s Executive Director, and Kenisha Roach has served as Providence’s Director of Operations.
Providence currently has multiple City grants as either a direct grantee or a subcontractor, largely through the Department of Homelessness and Supportive Housing (HSH). Notably, under a 2021 grant agreement, Providence operates the Oasis Hotel, a shelter for families experiencing homelessness located at 900 Franklin Street. In addition to operating the Oasis, Providence receives City funds to operate a navigation center, multiple housing subsidy and voucher programs, and supportive services for people experiencing homelessness.
False Invoices
Providence has received at least $105,000 from the City based on blatantly fraudulent invoices. The fraudulent invoices were submitted in 2022 for painting of the exterior of the Oasis Hotel and the removal of deadbolt locks at the hotel. However, this work was never performed. The hotel was never painted, and the deadbolts remain installed in the hotel to this day.
The fraudulent invoices for exterior painting and deadbolt removal are from Robert Lacy, Jr. and his business, Will Do It Construction. The invoices list a fabricated contractor’s license number and were sent to Kenisha Roach, Providence’s Director of Operations. Providence’s Executive Director, Patricia Doyle submitted the fraudulent invoices to the City in 2022 for payment, certifying on behalf of Providence that the invoices were for eligible services performed.
Both Roach and Doyle knew or should have known the invoices were false. 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. 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.
In November 2023, more than a year after the City reimbursed the fraudulent invoices, Lacy began working as a Client Engagement Manager for Providence and was promoted to an Assistant Site Manager position at the Central Waterfront Navigation Center in Spring of 2024.
At no point did Providence report the fraud, reimburse, or offer to reimburse the City.
Nepotism and Fiscal Mismanagement
In addition to the fraudulent invoices, Providence violated multiple other terms of its grant agreement with the City. Providence ignored the clear anti-nepotism provision in the grant agreement and hired members of at least seven different families, including two of the Executive Director’s children and one of the Vice President of the Board of Directors’ children.
Beginning in March 2023, HSH sent Providence a series of corrective action letters, seeking to bring the nonprofit into compliance and detailing violations of the grant agreement. In addition to violating the anti-nepotism provision, Providence’s breaches of the grant agreement include:
- Alleged wage theft from employees, including failing to provide holiday pay and making inaccurate and inadequate wage disbursements;
- Video and audio recording of guests and staff in private offices during confidential client conversations;
- Failing to maintain compliance with federal and state contracting requirements;
- Requesting reimbursement for costs beyond those authorized by the City, including $133,417 in extra security costs for the Oasis;
- Requesting reimbursement for costs for an employee position that the City had previously advised would not be reimbursed;
- Consistently failing to satisfy the 90 percent occupancy rate at the Oasis required under the grant agreement;
- Billing staff time to programs other than those they are assigned to work;
- Failing to respond to City document requests related to fiscal monitoring;
- Hiring staff for positions without required approval from the City.
Debarment and Suspension
Debarment is an administrative enforcement procedure that authorizes the City to ban contractors from applying for or receiving City contracts or grants for up to five years. Individuals or business entities are to be debarred upon a finding of “willful misconduct” with respect to any grant or contract.
Providence submitted false claims in violation of the San Francisco Administrative Code and the California False Claims Act. This alone constitutes willful misconduct and is grounds for debarment. Providence’s failure to comply with the grant agreement, pattern and practice of disregarding the terms of the grant agreement, and collusion in obtaining payment also constitute willful misconduct.
Along with the Counts and Allegations seeking debarment, City Attorney Chiu submitted an Order of Suspension against Providence, which is effective immediately and prevents Providence from receiving new City contracts or grants. The suspension will be in place until the debarment proceeding is resolved.
The Order of Suspension does not automatically terminate Providence’s current grant agreements with the City, but it may be grounds for the City to cancel existing grants or contracts. There should be no interruption of services or housing for Providence clients as a result of this Order of Suspension.
The Order of Suspension and Counts and Allegations Seeking Debarment against Providence Foundation can be found here. The list of entities unable to participate in contracting with the City and County of San Francisco is posted here.
Tips
Any member of the public may report allegations of improper or illegal public activity to the City’s Whistleblower Program at sf.gov/whistleblower-program. That program, administered by the Controller’s Office, often partners with the City Attorney’s Office on investigations.
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