Audit Exposes Major Problems within San Francisco Housing Authority

June 19, 2013

A scathing audit released on June 3 by the San Francisco Board of Supervisors’ Budget and Legislative Analyst has highlighted multiple problems within the San Francisco Housing Authority (SFHA). The SFHA was the first public housing authority established in California and remains the 17th largest housing authority in the country. The audit evaluated the economy, efficiency, and effectiveness of SFHA’s financial, operational, and program management.

A scathing audit released on June 3 by the San Francisco Board of Supervisors’ Budget and Legislative Analyst has highlighted multiple problems within the San Francisco Housing Authority (SFHA). The SFHA was the first public housing authority established in California and remains the 17th largest housing authority in the country. The audit evaluated the economy, efficiency, and effectiveness of SFHA’s financial, operational, and program management. The report states that, due to mismanagement, the SFHA has a significant funding shortfall and no cash reserves to cover the deficit. As a result, the SFHA could face insolvency by July 2013

While HUD has reduced funding to SFHA over the past several years, resulting in shortfalls in funding for public housing operations and maintenance, the report finds that SFHA hasn’t sufficiently managed its existing resources. Steps have been taken in the past year to change the direction of the housing authority. The Board of Supervisors requested the audit after HUD awarded the SFHA a score of 54 out of 100 in December 2012. This failing grade landed the SFHA as one of only two California public housing agencies on HUD’s “troubled” list and prevented it from applying for competitive grants. And in February 2013, the former seven-member SFHA Commission resigned, with the exception of one commissioner representing tenants. The mayor replaced the six outgoing members with city department staff. This new Commission has worked quickly to identify organizational weaknesses and increase the Commission’s oversight function by requiring detailed financial updates and regular program reports from SFHA staff.

Even with these changes, however, the audit report has disclosed critical operational areas that require immediate action. Some of the problems identified in the audit include: 276 units sit empty while thousands are on a waiting list for public housing; waiting lists aren’t updated frequently despite HUD guidelines; vacant units deprived the agency of more than $6 million in lost revenue over the past five years; the agency fails to collect, on average, $1.5 million in rent every year; it has a broken procurement system resulting in unnecessary costs and improper contract awards; it has failed to overhaul its maintenance procedures; and it has a backlog of thousands of repair requests.

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