Austin's nearly $2B in recent nonprofit spending mostly on track, auditors report

"Most city contracts we reviewed followed best practices by having quality performance measures that city staff monitor to ensure they are met," auditors wrote.

Still, the audit team found some issues and reported the city's nonprofit funding data "appears to be incomplete." More in-depth analysis of Austin's nonprofit relationships is expected in the future.

Council member Ryan Alter, one of two officials who'd asked for the spending review, said the information could help with future budgeting decisions as millions of dollars for public services typically offered through nonprofits are drying up.

"The federal government’s slashing of the social safety net has left the city in a precarious situation. We know we cannot fund all these programs, but we also cannot abandon our residents," Alter said in a statement. "The auditor’s report lays the groundwork for this conversation so we can better understand what programs are at risk and who they directly impact. Tough choices lie ahead, but we will always lean into helping our most vulnerable residents."

By the numbers

Hundreds of organizations received a total of $1.87 billion in city funds since fiscal year 2019-20. Of those, just three made up most—$1.13 billion—of Austin's nonprofit spending in that time:

• The Austin Transit Partnership received $799.34 million for development of the Project Connect transit system
• The Austin Firefighters Relief and Retirement Fund received $227.12 million for managing firefighter and beneficiary benefits
• The Lower Colorado River Authority Transmission Services Corp. received $102.52 million for electrical transmission services

Zooming in

Most of Austin's recent nonprofit funding went toward five main purposes, led by the ATP's work with Project Connect, which represented the largest service category backed with city funds. Beyond that, human services from family support to homelessness prevention to workforce programs were the second-most funded. Those were followed by payroll, financial, and communications and public relations services.

Auditors noted one nonprofit in that sample had no "goals or minimum expectations" for measures outlined in its homelessness services contract, which could affect the city's ability to grade performance. The auditor's office didn't identify that nonprofit, citing an exception under state public information law.

Auditors also found the city is monitoring its contracted nonprofits based on defined metrics, with staff able to report on the performance of nearly all organizations from a 20-contract sample. No documentation could be provided about the performance of one of those contracts, which the auditor's office didn't identify.

What's next

Following up on the council-requested special report, a full audit is planned to kick off later this year and could be completed by next summer, according to the auditor's office. That project's full scope and objectives are still to be determined.

Mayor Kirk Watson, who joined Alter in seeking the review, said he expects city leaders will build on the initial findings going forward.

"This is a step in a process that will allow the city to better understand how we work with our nonprofit partners to ensure we’re getting the best outcomes we can. We will continue this process so that we are looking at assurance that we have metrics and that the metrics are followed," he said in a statement.