Palm Springs seeks to tighten nonprofit grant controls after pilot program issues

Palm Springs city officials got their first chance Thursday to weigh in on proposed tighter controls on nonprofit grants following financial issues that surfaced with a guaranteed income pilot program.

During its regular meeting, the Palm Springs City City Council discussed strengthening grant management and fund disbursement policies, focusing on measures to enhance accountability and transparency in the wake of concerns surrounding the program administered by Queer Works and DAP Health that were reported by The Post in July.

City Manager Scott Stiles presented recommendations — contained in a staff report — that include eliminating lump sum payments for projects over $75,000 and requiring regular progress reports from grant recipients.

“It’s our duty as stewards of taxpayer dollars to continually better our processes and to ensure that funds are allocated toward our organizations that best align with the strategic vision of Palm Springs,” Stiles said.

The proposed changes would impact nonprofit organizations seeking funding through the city’s budget process or at community council meetings. Small grants administered by city staff through the grants and sponsorship program already have rigorous policies in place.

Key recommendations include:

• Requiring reimbursement-based payments or split payments for projects over $75,000
  
  
• Mandating regular progress reports and invoices
  
  
• Establishing minimum eligibility requirements for nonprofits
  
  
• Requiring annual independent audit reports
  
  
• Designating specific city departments and staff to oversee each grant

Council members expressed concerns that some new requirements, such as audited financial statements, could burden smaller organizations.

“I’m against requiring the audited or stating the review,” said Mayor Pro Tem Ron deHarte. “It’s putting an undue burden on small organizations.”

Councilmember Grace Garner suggested exploring ways to support nonprofits in meeting these standards, asking, “Can we just do a little bit of research to find out if there are audit groups that offer special pricing or are just different ways that we can help the organizations as they grow?”

The council also debated whether organizations must be physically located in Palm Springs to receive funding. Some members advocated for flexibility to support services benefiting city residents, even if the organization is based elsewhere.

City staff will incorporate the council’s feedback and present a revised policy for approval at a future meeting.

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