An investigation has revealed alarming misuse of federal funds intended for services for people living with HIV or AIDS in Oakland, California.
The AIDS Project of the East Bay (APEB), which had been contracted by the city to provide housing and medical assistance for residents with HIV, was found to have failed in delivering services, despite receiving over $110,000 in funding.
Unaccounted-for Services
The city of Oakland contracted with the AIDS Project of the East Bay in October 2024, allocating nearly $2.2 million in federal Housing Opportunities for Persons with AIDS (HOPWA) grant money.
The funding was intended to help provide crucial services, including rent and mortgage assistance, medical treatment, drug and alcohol counseling, and case management for people living with HIV.
However, a whistleblower alerted city auditors that the AIDS Project had not been providing services. The whistleblower’s claims included that the organization was not answering emails, had disconnected phone lines, and was not operating during business hours.
The investigation confirmed that the organization had received the funds, but failed to offer services as outlined in the agreement with the city.
Failure to Deliver Services
City auditors discovered that APEB failed to serve any clients under the contract for the 2023-2024 fiscal year. Despite this, the AIDS Project’s executive staff was unable to provide an accounting for the services.
In March 2025, when a representative from the Human Services Department finally made contact with the organization, they were told the clients were being served, but further questioning led to the admission that no services had been provided.
This lack of accountability prompted the city to terminate the contract and demand immediate repayment of the funds spent to date.
The city is now in the process of seeking a new community-based organization to take over the important services initially promised by the AIDS Project of the East Bay.
More Mismanagement Found in City’s Senior Centers
In a separate investigation, the Oakland Auditor’s office also found widespread financial mismanagement at the city’s senior centers.
Multiple whistleblowers reported issues related to facility rental fees, with allegations that staff were mishandling and even stealing fees.
The report highlighted significant weaknesses in cash-handling procedures, including instances where funds were not deposited for over a year and were stored in unsecured areas like desks and cabinets.
The Auditor’s investigation found that a lack of standardized procedures and insufficient staffing had contributed to these financial irregularities.
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Human Services responded by halting facility rentals at the affected senior center, and the department has acknowledged the need for better oversight.
Ongoing Struggles with Oversight and Staffing
Both of these investigations are related to services overseen by the city’s Human Services Department, which has been the subject of scrutiny in recent years. A 2022 report found that the city had failed to track the performance of contractors receiving millions in funding for homelessness services.
As of May, the department was missing nearly one-third of its required staff. Despite a recent budget increase, the department’s overall budget for the 2023-2024 fiscal year was reduced by $23 million.
The city has promised to prioritize improving oversight of contracts, with City Auditor Michael Houston emphasizing that monitoring how contracts are executed will be a key area of focus going forward.
What Do You Think?
Have you ever experienced similar issues with service providers or government-funded programs in your community? Share your thoughts and experiences in the comments below.
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