The City of San Antonio Audit and Oversight Committee on Jan. 14 accepted an internal audit that found systemic documentation and internal-control failures across the city's housing-repair programs, and NHSD officials described steps to correct the problems.

The audit report (AU-3207) reviewed 29 housing-repair projects and concluded 27 had at least one instance of noncompliance with program policies, including missing eligibility documentation, projects starting before required approvals, inadequate insurance coverage, improperly processed change orders and at least one project paid in full before work began, the auditor told the committee.

Abel Del Estvez, the audit administrator who presented the report, summarized the scope and principal findings: "Revisamos veintinueve programas. En veintisiete de los veintinueve que revisamos tuvieron un ejemplo de, o ms, de no cumplimiento." He listed missing mortgage statements and insufficient denials or participant notifications among the documentation gaps.

Vernica Garca, director of the Neighborhood and Housing Services Department (NHSD), told the committee NHSD has agreed with the audit's recommendations and has implemented an action plan. She said the department has updated policies and procedures, reorganized staff assignments, retrained employees, clarified insurance and eligibility requirements, and is working with the city attorney and the Finance Department to tighten contract and payment reviews. "Hemos reorganizado a nuestro personal y ... ya actualizamos nuestras polticas y procedimientos para aclarar los requisitos de elegibilidad," Garca said.

Committee members pressed for details about scale, risk and follow-up. Councilmember White said the findings raised questions about potential fraud, waste and misuse of taxpayer funds and noted the audit covered Oct. 2022 through Aug. 2024. "¿Se esta gastando todo este dinero en el municipio? ... ¿Si saben si se esta o no usando este dinero de manera efectiva?" White asked.

Committee members and NHSD staff discussed change orders as a recurring problem: the audit found nine of 14 projects with change orders lacked required prior approvals, and some change orders increased projects beyond program limits. NHSD said it will set maximum contract amounts where appropriate and require director-level approval before work proceeds.

Committee members also raised performance-measure questions. Committee member Way and others said clearer, consistent metrics are needed to show how many homes are completed in a fiscal year versus how many remain in process; NHSD said it will report completed projects and those still underway in future reporting.

The committee voted to accept the audit report. Members discussed a planned follow-up audit in fiscal 2026 to test whether NHSD implemented the corrective actions and improved file documentation for sampled projects.

The acceptance motion passed; individual roll-call votes were not read into the record.

The audit and the committee discussion underscore tension between rapid program expansion after recent housing bond funding and the need to strengthen internal controls, staff capacity and project oversight before further growth.