After being put on pause for almost four years, Santa Monica will once again have its Human Services Grant Program audited.

The city came to a two-year agreement with options to extend for two years with firm Moss Adams, LLC for auditing services for the program, which awards millions of dollars annually to non-profits around the city to support their operations and improve life in Santa Monica with a focus on youth and families, people with disabilities, seniors, victims of domestic violence, low-income households, and people experiencing homelessness.

Santa Monica has regularly had this program — which has run for over four decades — audited by an outside firm. However, budget adjustments in 2020 eliminated funding for the auditing services, though internal monitoring of the program and its grantees by city staff was still being carried out.

Over $10 million was allocated to organizations for the 2023-2027 series of the Human Services Grant Program including $61,850 to support Meals on Wheels Emergency Food Distribution,  and over $2 million to The People Concern for interim housing and housing retention services.

Moss Adams is one of the largest firms of its kind in the world, considered by many to carry similar prestige to Deloitte, EY, KPMG, and PwC — which are considered the “Big 4” accounting firms. The city previously enlisted them to monitor grantees in the 2020-21 fiscal year, which contributed to their selection for this more extensive contract.

The city will contract them to evaluate the program to ensure that the program and its grantees align with its guidelines. This includes evaluating the overall expenditures of the program and whether or not contracts are compliant with the various laws associated with grant programs. 

Other fiscal evaluation and monitoring tasks focused on the operations of the program previously carried out internally by the Human Services Department Fiscal Administrator and Analysts will also be handed over to the firm including evaluation of expenditures and general ledgers, the outcomes of those receiving grants from the program, funding conditions for the program, whether there are significant trends or challenges in programming and budgeting, and service levels of participants among other services.

Santa Monica council members were full of questions regarding the measures that Moss Adams and the city will have in place to keep grantees accountable at Tuesday’s city council meeting. Councilmembers Caroline Torosis and Christine Parra expressed concern over the virtual nature of the audits and the limitations that come with it. 

“With the amount of money that is going into the program, I would think it is hard to audit somebody on a virtual basis to make sure the program is doing what it is supposed to,” Torosis said. “You would really need to be in the facility at some point.”

Parra is on the city’s Audit Subcommittee and said her experience there helped her feel more comfortable that at least some audits be done in person.

“I think it behooves us to have those in-person site visits,” Parra said. 

City staff explained that they had done virtual audits for the program in the past and that the city developed a virtual audit system with Moss Adams that is nearly as extensive as an in-person one, with an option for in-person visits in the contract with the firm.

“The substance of that [virtual] monitoring is the same in terms of what they are able to see and request from the agencies,” Marc Amaral from the Housing and Human Service Department said. “The one thing that is left out of that process is a facility inspection…we would only venture to do that if you had a case where an agency was high risk or lent itself to uniquely benefit from site visits.”

Mayor Phil Brock said that the virtual nature of the 2021 audit — which had several discrepancies that have since been corrected — was “distressing” to him. He preached the need for accountability in the audit process, and that the program’s funds are going to the right places.

“We’re losing the public’s trust sometimes in the grant program,” Brock said. “We have got to make sure we have iron-clad guarantees that… [the funds] are absolutely going to the people who need it.”

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