Homeless nonprofit CISS fails to meet deadline for grant funding but Des Moines fills gap

A Des Moines nonprofit that provides shelter to homeless people is pointing to staffing shortages as its reason for missing a deadline to receive federal grant money and instead get covered by local sales tax revenue.

Central Iowa Shelter & Services, which provides low-barrier shelter, meals, and support services to adults who need housing assistance, missed out on $345,000 in funding from Des Moines through the Community Development Block Grant program after failing to conduct its financial audit in time to receive the money. The city swapped funding with tax dollars normally allocated to a neighborhood improvement program to cover CISS.

The financial misstep comes amid a record-high number of people who are unsheltered in Polk County. A January point-in-time count found approximately 715 homeless people on a single night in the county. That's an 11% increase from last year's 644 and a roughly 18% jump from the 606 reported in 2022.

The point-in-time count, required by the U.S. Department of Housing and Urban Development and led in Polk County by Homeward, the county's homeless planning organization, serves as a 24-hour snapshot of people's experiences, current living situations and resources available in the community.

CISS CEO Melissa O'Neil did not respond to the Des Moines Register's request for comment. But in a letter from CISS to the city of Des Moines, Board of Directors chair Chad Bentzinger blamed the delay on staffing shortages caused by COVID-19.

"The delay was due primarily to the widespread staffing shortages the accounting industry has seen as a result of COVID-19, which both CISS and our outside auditing firm experienced," Bentzinger wrote in the June 14 letter, which the Register obtained through a public records request.

The Wall Street Journal reported in 2022 that more than 30,000 accountants and auditors had left the profession in the previous two years and not enough college graduates are earning their degrees to fill the gap.

The city required the explanation as part of its financial swap.

“The City was able to simply reassign funding sources with ION and CISS to make allocations in their full and anticipated amounts as CISS completed its auditing requirement," Des Moines City Manager Scott Sanders said in a statement to the Register.

Why did CISS not receive its annual grant funding?

According to a Des Moines council communication memo, CISS was meant to receive the $345,000 to operate its emergency shelter through the CDBG program, which provides federal dollars that support community development including infrastructure, community centers, housing rehabilitation and public services.

CISS' emergency shelter, located at 1420 Mulberry St. in Des Moines, serves men and women experiencing homelessness, providing them with a place to sleep, as well as breakfast and evening meals, showers, laundry facilities and group counseling, according to CISS' website. People also can access case management services to help gain long-term stability. The shelter has 150 beds and people can stay up to 90 days.

CISS’ emergency shelter saw 1,763 visits between July 1, 2022, and June 30, 2023, with an average stay of 28 days, according to the nonprofit's 2023 annual report. The organization also helped 673 people transition to permanent supportive housing, the report states.

In a June meeting, the Des Moines City Council voted unanimously to redirect the equivalent amount of money to CISS from the city's Local Option Sales and Service Tax that has previously gone toward the Property Improvement Program, also known as the Improving our Neighborhood (ION) program, a city initiative that provides funding for property repair assistance.

The $345,000 in CDBG funds were, in turn, reallocated to ION, according to the council communications memo.

The 1 cent local options tax ― about 33% of which is generated by visitors ― is used for property tax relief, infrastructure and public safety upgrades, and neighborhood improvements, according to the city. The city gave ION $631,003 in fiscal year 2023, which begins July 1 and goes through June 3, according to the local option tax annual report.

As part of the agreement, Bentzinger was required to send a letter to the city explaining what caused the delay and reassurances that the organization would not repeat the mistake.

After blaming the staffing shortage, he wrote: "Although it is difficult to anticipate future circumstances, we certainly believe these issues have been addressed. We appreciate your understanding and continued support as we work toward our shared goal of serving the Central Iowa community."

Virginia Barreda is the Des Moines city government reporter for the Register. She can be reached at vbarreda@dmreg.com.