COVID-19 Food Distribution Expenditures:
The City Should Address Gaps
in Emergency Documentation and Procedures
A Report from the City Auditor
Issued October 2022
http://www.sanjoseca.gov/auditor
1 Background
• In March 2020, Santa Clara County
requested that San José provide food
and necessities throughout the county.
• City staff managed a network of food
providers to feed vulnerable residents
throughout Santa Clara County into
2021.
• The City has continued to coordinate
food services within San José’s city
limits.
Staff estimated the City
would need to increase
meals by around 1.3
million meals a week to
meet increased demand
during the pandemic
2 Finding I: The City Spent $79.3 Million
on Food Distribution
Exhibit: Expenditures Mostly Went T oward Direct Food Services, Such as Meal and Grocery Delivery
Source: Auditor analysis of FMS data, food distribution contracts, and PRNS contract monitoring documentation for expenses through June 30, 2022. * Other expenses primarily include supplies and materials. 3 Exhibit: Food Expenses by Fund, Location, Program, and T arget Populations Finding I: The City Spent $79.3 Million
on Food Distribution
Source: Auditor analysis of the City’s Financial Management System data, PRNS contract monitoring documentation, and food distribution contracts.
The exhibit shows food expenses from the beginning of the pandemic in March 2020 through June 30, 2022 for food contracts managed by PRNS. 4 Finding 2: The City Should Gather Additional
Documentation to Corroborate Service Delivery and
Support the City’s Claims to Federal Funds
• Each funding source had different
procurement and documentation
requirements.
• The City appeared to meet many
procurement requirements.
• The City had not fully documented that
food contracts followed some
procurement requirements for
competitive purchases.
• The City had not documented
justifications for all non-competitive
emergency purchases.
RECOMMENDATION:
The Administration should:
→Collect documentation
supporting federal
compliance with
procurement rules to include
in its cost recovery files
5 Finding 2: The City Should Gather Additional
Documentation to Corroborate Service Delivery and
Support the City’s Claims to Federal Funds
• T o monitor contracts, staff collected
invoices and performance reports from
vendors and cross-referenced the files for
consistency.
• The City did not generally corroborate
information in performance reports by
requesting backup documentation.
• Collecting such documentation helps
ensure residents received the services
promised under the contracts.
RECOMMENDATION:
The Administration should:
→Retroactively collect sample
documentation from vendors
to verify adherence with
contract terms, reported
service delivery, and eligibility
of contracted populations
6 Finding 3: Updating Emergency Guidance Can
Prepare the City for Future Emergencies
• The Emergency Operations Plan (EOP)
gives an overview of the City’s emergency
procedures and responsibilities.
• The EOP provides limited guidance on
procurements using federal funds during
an emergency.
• Purchasing staff created tools during the
emergency to help the City meet federal
requirements, but they were not
consistently used.
RECOMMENDATION:
T o prepare for potential
contracting needs in future
emergencies, the Administration
should update the EOP to:
→Revise staff roles and
formalize emergency
procurement tools
developed by Purchasing
7 Finding 3: Updating Emergency Guidance Can
Prepare the City for Future Emergencies
• The EOP does not refer to
procedures for contract monitoring.
• Staff followed PRNS guidelines on
contract monitoring to manage food
vendors.
• PRNS guidelines did not reflect all
requirements for federal grants and
best practices.
RECOMMENDATIONS:
The Administration should:
→Include a reference to guidance
supporting federal grant compliance
for contract monitoring in the EOP
PRNS should:
→Update its contract management
guidance to include expectations on
verifying service delivery through site
visits and desk reviews
8 Conclusion
This report has five recommendations to improve the documentation and procedures around emergency procurements and contract monitoring.
We would like to thank the Department of Parks, Recreation and Neighborhood Services; Finance Department; Office of Emergency Management; City Attorney’s Office; and Budget Office.
The audit report is available at www.sanjoseca.gov/auditor Audit staff: Stephanie Noble, Michelle Mallari, Juan Barragan 9