After making significant organizational improvements, nonprofit will continue working with the City to serve vulnerable populations
SAN FRANCISCO (August 26, 2025) — City Attorney David Chiu, Department of Homelessness and Supportive Housing (HSH) Executive Director Shireen McSpadden, and Office of Labor Standards Enforcement (OLSE) Director Patrick Mulligan announced today that the City secured a settlement agreement with Providence Foundation of San Francisco. The agreement allows Providence to continue providing important City-funded services to people experiencing homelessness and resolves suspension and debarment proceedings against the nonprofit, stemming from a 2024 investigation that revealed fraudulent invoices, accounting irregularities, and wage theft from employees.
Shortly after the City initiated debarment proceedings to block the organization from applying for or receiving new City funding opportunities, Providence admitted to wrongdoing, removed the employees involved in misconduct, reorganized its board of directors, and hired staff who have all cooperated with the investigation.
Under the $1 million settlement agreement, Providence has already paid $480,000 in restitution to current and former Providence employees for owed holiday pay and $105,000 to reimburse the City for the fraudulent expenses. Over the next five years, the non-profit will pay the City over $414,000 in civil penalties and has agreed to continue implementing several important accounting reforms.
“Providence is a great example of how an organization can turn things around and do the right thing,” said City Attorney David Chiu. “We’re pleased that Providence has gotten rid of bad actors and is committed to doing what is right for their employees, the communities they serve, and San Francisco. This agreement allows Providence to continue working with the City to serve unhoused San Franciscans, while putting important accountability mechanisms in place.”
“HSH commends Providence Foundation for their immediate and comprehensive response in addressing compliance issues and allegations of fraud that were raised in 2024,” said Shireen McSpadden, Executive Director of Department of Homelessness and Supportive Housing. “The culturally congruent services provided by Providence are invaluable to the community and we are grateful that this structured second chance enables the organization to continue to serve people who need support to stabilize and exit homelessness.”
“I’m incredibly proud of OLSE staff for uncovering these labor violations and working to resolve this matter expeditiously and efficiently,” said Patrick Mulligan, Director of the Office of Labor Standards Enforcement. “Always striving towards a strong atmosphere of labor compliance while simultaneously supporting a level playing field for responsible employers, I am grateful for the success of our collaborations with the City Attorney’s Office.”
Background
Providence Foundation is a San Francisco-based nonprofit started in 1996. Through a City grant, Providence operates the Oasis Hotel, which is a shelter for families experiencing homelessness. 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.
In 2024, a City investigation revealed Providence’s prior leadership submitted false invoices to the City for reimbursement, resulting in $105,000 of public money wasted. OLSE separately received complaints from Providence employees, prompting an investigation that uncovered local and State labor violations. Following the City investigations, City Attorney Chiu initiated debarment proceedings against and suspended Providence Foundation from bidding on or receiving new City contract or grants.
Shortly after the City initiated debarment proceedings, Providence admitted to wrongdoing, installed new board and organizational leadership, removed the employees involved in misconduct, and worked with the City to resolve the dispute. Under its new leadership, Providence has instituted several corrective actions that have brought its programs into compliance with its grant agreements and applicable law.
Under the settlement agreement, Providence:
- has paid $480,724.25 to a third-party settlement administrator, who will distribute payments to current and former Providence employees who were denied holiday pay.
- has paid $105,000 to reimburse the City for the fraudulent invoices submitted under prior leadership.
- will pay $414,275.75 to the City over five years for prior Providence leadership’s failure to comply with generally accepted accounting principles.
- will continue implementing corrective actions that have brought its programs into compliance with its grants and applicable law.
- admits that conduct under prior management constituted willful misconduct that subjects Providence to a full five-year term of debarment, but the term of debarment will not apply unless Providence breaches the settlement agreement.
- agrees that it cannot hire or contract with the individuals who participated in the misconduct.
Providence may seek additional City grants and contracts while it is completing its 5-year payment, provided it does not breach the settlement agreement.
Having provider partners, like Providence Foundation, with rich community ties, cultural competency and credibility is essential to providing impactful homeless services. By instituting reforms and resolving this dispute amicably, Providence can continue providing services to our most vulnerable, while the City can continue to rely on a valuable service provider.
The settlement agreement will go before the Board of Supervisors for approval in the coming months.
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