As in many cities, Austin relies heavily on nonprofit organizations to deliver its family and children services, but a July audit raises serious questions about whether the performance that is promised in those nonprofit contracts is achieved. 

As the audit explains, “The city is paying for services that were not delivered and vulnerable residents may not get the services they are supposed to receive.”

In fact, the audit shows that “nonprofit organizations did not meet about 44% of the expected output and outcome performance expectations.” These expectations connect to a wide variety of resident needs, supporting “homelessness services, health and behavioral care, job training, housing assistance, and services for children, youth, families and other community members.”

The issue Austin faces is not in setting performance expectations for services. In the review of 175 performance expectations in 25 contracts, auditors found that 93% “clearly defined what was supposed to be delivered and 89% “specified how success would be tracked.”

The problem is in seeing if the performance expectations are actually met. The city “does not enforce consequences when nonprofits fail to meet performance goals” and “it does not consistently conduct or document evaluations of nonprofit performance at the end of each contract,” according to the audit.

Austin has also faced similar performance monitoring issues in the past, some involving nonprofits and others focused on a wider variety of contracts. 

“Measuring the Hidden Workforce,” a April 2026 B&G Report on this website, focused on $279 million Austin spent on consultants between fiscal years 2023 and 2025 and a March 2026 audit observation that 64% did not include a “formal performance appraisal.”

More broadly, the B&G Report stated that “even when procurement departments carefully include performance measures in a contract, that doesn’t guarantee that agencies, which oversee the contract, will follow through to see that planned targets are achieved.”

This is an issue that recurs frequently in performance audits in other state and local governments, involving contracts of all types. Performance monitoring problems were highlighted recently in a June audit of Solid Waste Management Services in Toronto, and a performance audit of public works in San Francisco in May. 

How do governments rectify this common problem? The July Austin audit makes the following recommendations that may be useful to other governments, as well: 

• “Require city departments to evaluate and document the performance of nonprofit contractors and grant recipients, including assessing the quality of the work and how effectively the nonprofit addressed instances of noncompliance.”

• “Establish the evaluation criteria and communicate the criteria to departments.

• “Determine how the results from the performance evaluations should be used for future nonprofit contracts and grants and clearly communicate that guidance to departments.”

• “Implement a way for departments to share post-contract performance evaluations with other departments.”

In addition, the audit suggests that a lead department should be identified to put into place a post-contract evaluation of performance, “strengthen the City’s family and social services contracting model and determine ways to “encourage nonprofits to meet performance expectations and provide a high level of service.”

The management response from T.C. Broadmax, Austin City Manager, agreed with these recommendations and noted a number of improvements that were underway, affecting both grants and contracts.

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