This interview with Andrew Graham, a reporter for the Press Democrat, explores his year-long investigation into DEMA Management and Consulting, a for-profit company overseeing housing and medical services for the homeless in Sonoma County. DEMA’s contracts with the County’s Department of Health Services included two former hotels purchased with State funds under Project HomeKey: Elderberry Commons in Sebastopol (January 2021-March 2023) and Mickey Zane Place in Santa Rosa (from December 2020 to present). DEMA also manages the County’s Emergency Shelter Site (ESS), a tent camp that opened in the spring of 2023 on Administration Drive in Santa Rosa. Over a three-year period, the County paid DEMA over $26 million.
After hearing from residents of the facilities managed by DEMA and talking to current or former DEMO employees, Graham began looking more deeply into DEMA. He obtained information on the contracts with the County and the invoices submitted by DEMA. His reporting unveiled problems with DEMA, which included a set of financial discrepancies, lack of documentation for the work of salaried employees, and other questions about medical services provided. In response to reporting, the County Auditor stepped in to do a limited review of the billing. Michelle Patino, the CEO of DEMA, threatened to sue the County and the Press Democrat while denying there was any problem.
The County’s Auditor took many months to look into DEMA’s billing, in part because DEMA did not cooperate. Meanwhile, the Department of Health Services was looking into extending DEMA’s contract.
The Auditor presented a report to the County Supervisors this spring and they deliberated over what to do in several private meetings. Last week, the Supervisors decided to the cut ties with DEMA. DEMA’s billing problems could mean that the County would have trouble getting reimbursed by FEMA for the amount it paid to DEMA.
Here a timeline of Graham’s reporting on DEMA in the Press Democrat (behind paywall).
July 28, 2023. Sonoma County auditors will review DEMA contracts in response to Press Democrat investigation
July 31, 2023. Sonoma County’s elected finance chief says DEMA audit will be thorough and independent
August 11, 2023. DEMA CEO denies wrongdoing as Sonoma County puts homeless housing sites out for competitive bids
September 10, 2023. Sonoma County Board of Supervisors prepares to award another $3.3 million to DEMA to manage 3 housing sites, as audit continues
November 24, 2023. Sonoma County plans to extend contract for homeless housing contractor DEMA even as company withholds records from auditors
January 31, 2024. Sonoma County extends contract with controversial homeless provider that is under financial investigation
March 8, 2024. Report from Sonoma County’s financial investigation into homeless services provider DEMA delayed again
March 27, 2024. ‘Every hour accounted for’: DEMA CEO responds to report questioning millions in billing
April 7, 2024. What to do about DEMA? Homeless services provider vexes Sonoma County officials
April 16, 2024. Sonoma County supervisors vote to sever ties with embattled homeless services contractor DEMA
While DEMA is at the center of the story, the broader context is the role of oversight by the County of its patchwork of contractors who provide homeless services, especially as spending on homelessness has increased and the scope of work has become more complex over this period.
Are the millions of dollars spent on homelessness programs producing results? A story in CalMatters says that California fails to track its homelessness spending or results, a new audit says. A statewide audit released (last) Tuesday called into question the state’s ability to track and analyze its spending on homelessness services. The article used the cities of San Diego and San Jose as examples.
San Jose and San Diego each have spent hundreds of millions of dollars on homelessness in recent years. But neither could provide an exact accounting of how much was spent and where it went, according to the audit.
And both cities failed to consistently evaluate whether the homeless services nonprofits they contract with are effectively spending city funds. In San Diego, for example, a $1.6 million shelter contract didn’t specify how many people should be served, making it impossible to tell if that program has been successful. Even when the cities required performance metrics from their contractors, they sometimes failed to collect them.
The need for extensive investigative reporting such as what Andrew Graham and the Press Democrat have done is essential if public officials and their contractors are to be held accountable for making progress on the homelessness problem.
Investigating DEMA