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Austin City Hall on Monday, May 18, 2026.<\/p>\n
Jay Janner\/Austin American-Statesman<\/p>\n
Mayor Kirk Watson and several Austin City Council members raised concerns Monday about a recent city audit<\/a> that found\u00a0 nonprofit contractors missed nearly half of their performance targets but were still paid in full by the city.\u00a0<\/p>\n The audit, released July 15, examined 25 contracts<\/a> worth about $30 million and found that 76% failed to meet at least one performance measure. Overall, contractors missed 44% of the measurable targets reviewed, including benchmarks for the number of residents served and whether services improved clients\u2019 health or circumstances.<\/p>\n Article continues below this ad<\/p>\n \u201cLet’s be candid \u2014 the findings are troubling,\u201d Watson said during a meeting of the council\u2019s Audit and Finance Committee. Watson said the findings could indicate that vulnerable residents did not receive services the city paid nonprofit organizations to provide.<\/p>\n Social services cuts under consideration<\/p>\n The audit comes as the council considers cutting millions of dollars from social service contracts while attempting to close a projected $26 million budget shortfall.<\/p>\n Watson acknowledged that providers may have faced staffing shortages or circumstances beyond their control. He also said the city must take responsibility if it imposed unrealistic requirements or failed to manage contracts effectively. But \u201cnone of those possibilities supports a system in which expectations can be missed repeatedly without consistent review, without corrective action or without consequences,\u201d Watson said.<\/p>\n Article continues below this ad<\/p>\n He added that providers should have an opportunity to explain and address performance problems but said that \u201cwhen performance doesn’t improve, we should be willing to redirect public money so that the promised services are actually provided.\u201d<\/p>\n Council Member Ryan Alter cautioned against using the findings to condemn every nonprofit that contracts with the city, but agreed that performance should factor into decisions about which organizations receive city funding.\u00a0<\/p>\n \u201cThis is first and foremost about the people we’re trying to serve, but it is really an indictment of our ability to manage that service,\u201d Alter said.\u00a0<\/p>\n \u201cWhen we are trying to decide who is worthy of funding and who is not,\u201d he added, \u201cI think we need to start that conversation with those who are not meeting the expectation.\u201d<\/p>\n Article continues below this ad<\/p>\n Nonprofit leaders respond\u00a0<\/p>\n Some nonprofit leaders warned that the report\u2019s limited scope did not justify broader conclusions about all organizations that contract with the city.<\/p>\n \u201cThe report identifies concerns related to reporting delays, communication practices, and inconsistent contract management processes that are more a reflection of the city’s own contracting system, than a performance of any single nonprofit,\u201d Lifeworks CEO Liz Schoenfeld told the committee Monday.\u00a0<\/p>\n “These details matter, especially in the middle of a budget process where millions of social service contracts are already under consideration for elimination.\u201d<\/p>\n Article continues below this ad<\/p>\n One Voice Texas sent a letter to the mayor and City Council on Monday noting that a separate nonprofit audit last year found city staff monitored contracts and leases in 19 of the 20 agreements reviewed. The group also questioned the timing of the latest report, which was released during the city\u2019s budget process, and asked officials to identify any low-performing organizations and give them an opportunity to respond \u201cbefore public conclusions are drawn.\u201d<\/p>\n<\/p>\n