San Francisco's top tax office is under fresh scrutiny after a new audit alleged that a senior official steered a nearly $10 million technology contract to a close friend, reviving long-simmering questions about how the city hands out big-ticket deals. The findings build on concerns that first surfaced last year and now threaten to slow a major project to modernize the city's business-tax software.
The document, which reporting says was produced jointly by the City Attorney's Office and the Controller's Office, concludes that Chief Assistant Treasurer Tajel Shah improperly pushed the contract award toward Mechanical Orchard, a vendor linked to an executive Shah reportedly knew personally. According to the New York Post, the audit characterizes Shah's conduct as an abuse of her position.
What auditors found
Auditors and records reviewed by local reporters say Shah exchanged more than 1,100 emails and other communications with Mechanical Orchard executives during the procurement process. They report that she directed staff to tweak scoring and costs in ways that favored the company, including last-minute price changes that tacked roughly $1.7 million onto competing proposals. As detailed by The SF Standard, one ethics expert called the conduct extraordinary and warned it would flout basic transparency rules.
Timeline and fallout
Mechanical Orchard walked away from the deal in September 2025, and Shah was placed on paid leave the same week, according to earlier reporting. The contract was supposed to replace an aging system that touches nearly 90,000 businesses citywide, according to the Office of the Treasurer & Tax Collector. Local reporting pegs the taxes that the system helps administer at roughly $2.6 billion a year, not exactly pocket change for a city budget.
GrowSF and other outlets first surfaced the whistleblower allegations and internal documents that set the probe in motion, highlighting just how sensitive the contract had become inside City Hall.
Legal and ethics review
City officials say the audit grew out of a whistleblower complaint, with the City Attorney's Office and Controller's Office tasked with determining whether policies or laws were broken. The SF Standard first reported detailed accounts of the complaint and the internal records that prompted the independent reviews now folded into the audit.
Why it matters
The report lands at a delicate moment. The city's business-tax system is widely seen as overdue for an overhaul, and this controversy is likely to make selecting a new vendor politically charged and painfully slow. For local businesses and taxpayers, the big question is whether San Francisco can restart its modernization effort under stricter oversight and, in the process, rebuild public trust in how multimillion-dollar contracts are awarded.
