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Housing Authority reports approximately $29.5 million HCV shortfall; city and HUD coordination, BDO contract and possible city assumption discussed
Summary
SFHA acting director Barbara Smith told the committee the Housing Choice Voucher program faces an estimated shortfall of roughly $29.5 million tied to over‑utilization, forecasting-tool errors and retroactive rent obligations; SFHA has hired BDO for finance oversight and HUD shortfall assistance may require the city to assume SFHA functions.
Acting San Francisco Housing Authority (SFHA) Director Barbara Smith briefed the Government Audit & Oversight Committee on Oct. 25 about a large shortfall in the Housing Choice Voucher (HCV) program and the agency’s ongoing response.
Smith said prior improvements—conversion of 3,500 public housing units through RAD, repayment and reconciliation work, and an upgraded voucher management system—had strengthened the agency, but that a forecasting tool, data input errors and significant retroactive rent payments have produced an HCV funding shortfall.
"Reserve estimates at the beginning of the calendar year were $34,000,000. There were errors in our reporting, so the actual amount turned out to be $28,000,000…" Smith told the committee and described an estimated program deficit of about $29.5 million. SFHA has contracted BDO to manage finance operations; BDO and HUD are reviewing transactions and reserves to finalize the shortfall figure.
Committee members pressed SFHA on why earlier audits and the 2017 City Service Auditor report— which identified finance‑department weaknesses—did not prevent this outcome. Smith and SFHA staff said hiring and retaining experienced finance staff had been difficult, the agency had undertaken a lengthy procurement to secure a qualified contractor and that reconciliation work (with the city auditor’s assistance) had been underway.
HUD has a national shortfall fund and was engaging with SFHA; SFHA said HUD indicated it may increase budget authority, and that one HUD condition for shortfall support could be a city assumption of SFHA essential functions (effectively closer integration of SFHA into City operations) after meet and confer with labor unions. MOHCD Director Kate Hartley described city funding constraints and the tradeoffs of reallocating previously authorized housing trust funds to cover urgent SFHA obligations.
The committee received public comment alleging programmatic and policy contributions to the shortfall. Members agreed to continue the item to the call of the chair and to adopt an oversight posture focusing on transition planning and financial system integration with city systems.
