In 2018, the San Francisco Housing Authority (SFHA), which oversees housing for approximately 20,000 city residents, is nearly $30 million in the red. The agency’s bookkeeping department, reportedly the cause of the overspending, is allegedly so inept that City Hall will now take over SFHA directly.
At Tuesday’s Board of Supervisors meeting, Supervisor Aaron Peskin offered a bemused summary of the situation.
“Inexplicably, they spent $29.5 million they did not have,” said Peskin of SFHA. He added, “The good news is that it appears the city will [...be] actually taking over its day to day functions.”
Peskin says he will request a Legislative Analyst’s report “to look at the effect of the city incorporation on the housing authority.”
The San Francisco Chronicle broke the story of SFHA’s financial troubles October 15:
The deficit was discovered last week during an audit conducted by the accounting firm BDO and a “quality assurance team” from the federal Department of Housing and Urban Development [HUD].
[...] HUD had informed the city in September that the Housing Authority had a shortfall, but the amount — between $20 million and $30 million — was much higher than expected. It is common for HUD to cover shortfalls for local housing authorities at the end of the year, but typically the amount is in the hundreds of thousands of dollars, not the tens of millions.
Last Thursday, at a meeting of the board’s Government Audit and Oversight Committee, SFHA’s Acting Director Barbara Smith said that “over utilization of its Housing Assistance Payments” from the federal government led to the budget hole, noting that the authority had trouble retaining “experienced, competent finance staff.”
In short, the people responsible for balancing SFHA’s checkbook allegedly lost track and burned through everything before the year was out.
Smith estimated that the shortfall will continue into 2019.
The San Francisco Examiner reports that HUD will help bail out the housing authority to the tune of $10 million. The city will loan the authority up to $20 million, and a Tuesday vote by the SFHA board authorized tapping a $7 million-plus reserve fund as well.