CalHFA board receives annual governance training, hears fraud-prevention briefing
Loading...
Summary
CalHFA board members completed annual governance training from CliftonLarsonAllen emphasizing fiduciary duties, open-meeting rules and fraud prevention; staff described existing controls, ongoing phishing tests and an agency fraud hotline.
Mandy Merchant, a principal with CliftonLarsonAllen, led the California Housing Finance Agency board through its annual governance training, walking directors through fiduciary duties, open-meeting obligations and fraud-prevention best practices.
Merchant told the board the basic fiduciary obligations are “duty of care, duty of loyalty, [and] duty of obedience,” and urged members to review board materials and “act as if you’re spending and approving as it’s your own money.” She highlighted the line between governance and management and said boards should avoid day-to-day operational involvement.
Legal counsel corrected one practical point during the presentation, noting the Fair Political Practices Commission gift threshold Merchant cited had been updated: “the current amount is $50 or, in the aggregate for a year, it’s $630 total,” and counsel offered legal help for reporting questions. Merchant also reminded members that Form 700 filings are due April 1.
The presentation shifted to fraud risks. Merchant summarized national ACFE findings and figures described during the briefing and warned that asset misappropriation is the most common scheme. She described mechanisms for detecting fraud, including fraud hotlines and tips, and said fraud awareness training shortens detection time and reduces losses. “The auditors never find it, unfortunately,” Merchant said, arguing the board’s role is prevention through strong internal controls and oversight of separation of duties.
CalHFA staff described existing measures: annual fraud and ethics training for employees, regular phishing tests run by information technology, dual control over financial processes, and recent efforts to strengthen contracting and separation of duties. Staff said they collaborate with auditors, expanded risk registers and are rolling out an agency-wide fraud training developed with CliftonLarsonAllen.
Board members asked about the board’s role in detection and whether more training or stronger reporting would help. Staff emphasized prevention and ongoing monitoring; they also said the agency maintains a fraud hotline for employee and public tips.
The training concluded with members thanking Merchant and noting plans to continue the annual fraud-awareness and governance work. The board did not take formal policy action during the presentation.
