Committee reviews BLA audit and forwards MOU and $20 million loan for San Francisco Housing Authority transition

Severn Campbell of the Budget & Legislative Analyst Office presented the office’s performance audit of the city’s assumption of essential functions for the San Francisco Housing Authority (SFHA) and the MOU before the committee. Campbell said the audit identified three major risk areas: an ongoing shortfall in the housing voucher program (historically reported up to $30 million), potential severance liabilities tied to staff reductions (estimated up to $5 million), and unfunded pension/OPEB liabilities (the audit cited roughly $61 million in retiree health liabilities and projected reductions with uncertainty after 2023).

Campbell said the audit included 16 recommendations aimed at strengthening financial reporting, requiring annual and mid‑year reporting on voucher utilization and liabilities, ensuring timely HUD applications for supplemental funding, evaluating severance funding and consulting with HUD about eligible uses of reserves, and setting clearer oversight for disposition of non‑housing assets. “We identified three major risk areas in this audit,” Campbell said, and noted that some recommendations were agreed to with qualifications while four were disputed by the transition team.

Deputy City Attorney John Givner cautioned that state law governs appointment authority for the Housing Authority commission and explained that the mayor retains discretion to appoint commissioners; Givner noted the mayor had provided a letter committing to follow Board recommendations for certain seats but that the commitment is not legally binding under existing state law.

Tanya Ladihoo, SFHA transition lead, disputed several of the audit’s characterizations about the agency’s fiscal state and described improvements since the prior reporting period. On the projected voucher shortfall, Ladihoo said SFHA’s current projection for the coming calendar year is “$8 to $10,000,000” and that HUD has committed funds to cover the shortfall in the year just ending. Ladihoo also said SFHA has fully funded the severance payment and is working to stabilize financial controls and reporting.

Campbell and SFHA representatives also discussed the MOU’s treatment of financial management and whether certain financial functions should be brought in‑house after transition; the BLA recommended stronger controller oversight and tighter integration of financial systems where feasible.

The committee reviewed redline amendments to the resolution and the MOU (clarifications to the voucher program description, references to HOPE SF master development agreements, and language clarifying the Board’s ability to declare itself the Housing Authority Commission by ordinance for oversight). After discussion and questions from supervisors about resident services and operational risks, the committee approved the amendments and forwarded the MOU and a retroactive loan of up to $20 million from the Mayor’s Office of Housing to SFHA to the full Board with a positive recommendation. The committee also closed the hearing on the BLA review and filed the matter for the record.