Oakland auditor blames 'lack of leadership' for crime-fighting grant blunder

OAKLAND, Calif. - Poor leadership, management and communication; that's what Oakland's acting city auditor says is to blame for missing out on a crime fighting grant worth up to $15 million.

The 37-page report, released Monday, details where city leaders and staff contributed to the "doom" of the application. 

Acting auditor Michael Houston reported the city of Oakland "prepared but did not successfully submit a grant." 

He identified four missteps in approaching the application: a lack of leadership, lack of project management, poor interdepartmental communication and a lack of a grant management policy.

"It was a case of a lot of people wanting this grant to succeed," said Michael Houston, the city's acting auditor. "There just wasn't sufficient executive sponsorship, to make sure some of the basic things were covered."

KTVU had essentially reported these findings in December 2023 after obtaining internal emails laying out how the various Oakland agencies waited until the last minute to apply for the grant. But the auditor's report, inspired by reporting by KTVU and other media, memorializes these findings in an official city report. 

Last April, the Board of State and Community Corrections opened the application process for an Organized Retail Theft Grant. 

Police departments, sheriff's offices, and probation departments, like local district attorney's offices, were eligible to apply. Cities of the same size as Oakland were eligible to receive about $15 million.

Through records requests, KTVU reported city staff waited until the last minute to submit an application, after months of back and forth between employees in different departments, like police and the Economic Workforce Development Department. 

Ultimately, the BSCC never received a completed application from Oakland.

In his report, the auditor spells out exactly when the police department found out about the organized retail theft proposal and how long it took to be "fully engaged." 

The report then details how the EWD took the lead less than two weeks before the deadline. 

The auditor determined for the 85 days the grant application was open, the city was only fully engaged for 16 days. 

That timeline is spelled out in a KTVU investigation.

According to the audit, the grant application had a caveat to applicants that they are "strongly advised to submit proposals well in advance of the due date and time to avoid disqualification."

In terms of failed leadership, the report mentions Mayor Sheng Thao, who took responsibility for the blunder during her inaugural State of the City address last October. 

When pressed by reporters on details regarding the grant, Thao often diverted questions to the city administrator. 

Citing city charter, the report states that while the mayor is not directly responsible for applying for grants, she is responsible for guiding the city adminstrator's office and could have "exercised better leadership."

Because the nature of the grant was intended for crime fighting, the report mentions OPD could have declined any assistance by the EWD and, instead, forfeited its leadership when EWD staff took the reigns, an idea highlighted by a KTVU report.

For example, staff at the Santa Clara County Sheriff's Office did not seek out any help from other city or county departments in filling out their grant. They were awarded $11 million. 

Additionally, at the start of Oakland's grant application process, three leadership positions within the city were filled by interim staff; police chief, city administrator and EWD director. 

The auditor writes the temporary nature of an interim role "can impact their ability to build trust with employees, build strong relationships, and impede effective collaboration and communication."

Other challenges, the auditor noted, can include managing complex dynamics, gaining buy-in from employees, and coming up to speed on all ongoing programs and projects.

Overall, the auditor offered a detailed recommendation to the city: implement a grants management policy. 

The policy should help guide the pursuit of grants and require city staff to get approval from the city administrator before applying.

It also recommends the city administrator appoint an executive sponsor, a city employee, with authority, to handle any grants proposals that come through the city.

Oakland's administrator said in a statement that the city has learned from this setback.

"Immediately after this issue arose last year, our administration identified several areas where the system broke down and enabled this to happen, and we fast-tracked corrective action," City Administrator Jestin Johnson said. "We have reviewed the City Auditor’s recommendations are working to implement them. We are pleased that the audit’s analysis validates what we observed and the initial corrective action we have taken."

The city auditor's office will publish, twice a year, reports on any outstanding audit recommendations, so if the December deadline isn't met, the public will know.

Independent of the audit, Mayor Thao and City Administrator Jestin Johnson have long said they are working to fast-track hiring a centralized, city-wide grants analyst. 

However, Oakland has been saying they would hire a grants manager for seven months, since September 2023. 

City council member Noel Gallo says the city is still working on making that hire. 

He told KTVU the council has agreed on funds and conducted interviews, but still hasn't made a section, something he says is taking too long.

"For me, it's clearly a demonstration of the lack of coordination within city government," he said.

According to council president Nikki Fortunado Bas's office, the city is in its final stages to make a hire and have them start by the end of May.

The auditor did mention even if the city did complete an application successfully, there was no guarantee it would have been awarded the grant.

According to the BSCC, only 33% of applying law enforcement agencies were awarded a grant. 

KTVU reached out to the Oakland Police Department and the mayor's office for comment. 

Despite being named separately in the report, an OPD spokesperson deferred comments to city hall.

No city spokesperson responded to a request for comment.