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An internal audit of the San Mateo County Community College District found that $7 million in gift card rewards intended to address student food insecurity were distributed without adequate oversight between 2020 and 2024.
At the onset of the Covid-19 pandemic, students on district campuses received electronic gift cards for emergency food assistance. The audit report found that between April 2020 to December 2024, the district purchased $6.2 million in Tango rewards cards that can be redeemed for gift cards to hundreds of retailers, including Target, Amazon, Safeway or Starbucks. The gift cards had few restrictions, meaning recipients could spend them on items other than food. The district includes Cañada College, Skyline College and College of San Mateo.
The audit also found that a staff member at Cañada College purchased $541,000 in physical gift cards from Albertsons – a grocery retailer that owns Safeway – between March 24, 2020, through May 9, 2024, to distribute to students.
It also stated that the process for procuring services and contracts had insufficient controls since SMCCCD entered the contract with Tango without competitive bidding, board authorization, standard contract protections, or spending and duration limits. Additionally, once funds were disbursed, controls over how those funds were used, monitored and reported were also insufficient, the report said.
At a regular July 29 meeting with the district Board of Trustees, Chancellor Melissa Moreno acknowledged the shortcomings of the gift card process, but noted in the official written response to the audit that the gift cards were issued to address student food insecurity during a public health emergency.
“Could we have been better? Absolutely. Do we want to be better moving forward? Yes, no question,” she said during the meeting.
Over 31,000 students were enrolled in SMCCCD schools during the 2023-2024 school year. A third of those students were Hispanic, according to the district. A 2022 SMCCCD survey found that around 8 in 10 students had some form of housing or food insecurity.
The college district benefits from local taxes. About $215 million of its $790 million annual budget comes from local property taxes in the 2025-2026 budget.
Houman Boussina, a performance auditor and policy analyst hired by the district in March 2024 to improve efficiency of services, flagged the Tango gift card expenditures to Moreno in November 2024. The program was promptly shut down, Moreno said during the board meeting.
The audit report, which is nearly 300 pages, found that $849,000 worth of Tango cards went unredeemed because some rewards were sent to invalid email addresses and some rewards simply went unclaimed by students, who were not sent annual reminders of their gift card balance, the report stated. It also found $1 million in Tango rewards and retail store gift cards went to individuals who earned less than one credit during the academic term.
A key issue of the audit and discussion was whether the spending was approved by and visible to the Board of Trustees. Boussina and Moreno disagreed on this point, with Boussina arguing that the student Tango rewards strayed from their intended purpose of reducing food insecurity because the gift cards were unrestricted.
“From a budgetary perspective, I would say you may have approved budgets for a food insecurity program,” Boussina told the board. “But this program, from an execution internal controls perspective, did not appear to me to be a food insecurity program.”
The report also stated that the Tango contract had no spending cap known as a “not-to-exeed” amount to ensure that SMCCCD did not spend above the authorized or budgeted amount.
Moreno told the board the SMCCCD spends $1 million per year to address food insecurity, which is an annual expense approved in the budget by the Board of Trustees.
In an official response at the end of the audit report, Moreno and SMCCCD management said the activities occurred during “one of the most difficult and uncertain times in the district’s history” but said it acknowledged the need for clear policies and procedures and monitoring of student assistance and food support.
The audit laid out a range of recommendations. One suggests that the chancellor should consult legal counsel to see if any laws were broken. Another calls for replacing the practice of using “warrant reports” to retroactively ratify contracts with a different approval process where the board sees and approves the contract before it’s executed. Others suggest underlying fixes to processes and calls for the board to adopt specific policies governing when giving gift cards or rewards serves a specific public purpose.
The chancellor will create an implementation plan outlining proposed solutions to the identified issues which will be presented at the meeting and approved by the board. Moreno said during the meeting that she plans to implement some but not all of the recommendations, and will favor those that are forward-looking process improvements.
It is not the first time the community college district has faced questions about its finances. On July 31, Ronald Galatolo, the former chancellor of SMCCCD, was sentenced to eight months in county jail for falsifying financial disclosures and failing to report income or gifts related to his job. He served as chancellor from 2001 to 2019.
In 2024, SMCCCD created a Performance Audit Unit to “increase transparency and accountability within the organization.” Boussima was the first auditor hired.
“For the community’s sake, we are very cognizant of the money we spend for our mission,” said Board of Trustees president Wayne Lee. “We’re going forward and making sure it doesn’t happen again.”
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