SHRA financial audit: clean opinion on statements but material weaknesses found in voucher and public housing programs
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Summary
External auditors gave the Sacramento Housing and Redevelopment Agency an unmodified opinion on its financial statements but reported material weaknesses and significant deficiencies in certain federal programs, notably the Housing Choice Voucher and public housing programs, citing untimely annual certifications and inspection follow-ups; staff said these primarily reflect timeliness improvements needed, not fraud.
An external audit of the Sacramento Housing and Redevelopment Agency's 2024 financial statements presented to the Board on Feb. 24 found a clean (unmodified) opinion on the agency's financial statements overall, but identified material weaknesses and significant deficiencies within some federally funded programs.
Mandy Merchant of CliftonLarsonAllen described the audit scope and results, saying the financial statements received an unmodified opinion, and that the single‑audit for federal awards also received an overall unmodified opinion but included qualifications for two programs. Merchant flagged timeliness issues in the housing choice voucher program and public housing: in sampled files, a number of annual certifications were not completed within required timelines and a small number of failed inspections were not reinspected on schedule. She noted specifics: 23 of 60 files sampled had late annual certifications in the voucher review, 7 of 40 files tested in the public housing sample lacked timely annual certifications, and in the emergency services grant (ESG) sample 10 of 299 subrecipient distributions were not completed within the required 30 days.
Merchant emphasized progress from prior years: the agency had a significant reduction in required adjusting journal entries compared with earlier audits and staff has been making improvements in controls and closing processes. "We did have an unmodified opinion on the financial statements," Merchant said, and she described the audit as a risk‑based review that found primarily timeliness and process control issues rather than misstatement or fraud.
Supervisor Hume (Hough) noted the distinction between controls/process failures and malfeasance, saying in his reading "things weren't done as well as they should have been, but it wasn't necessarily a misrepresentation or anything rising to the level of fraudulent behavior." Board members thanked auditors and SHRA staff and accepted the report; in minutes staff noted the audit was "received and filed." Staff said they will continue improvements and will implement mitigation plans for noted findings.
Key takeaways: auditors identified material weaknesses in the housing choice voucher and public housing programs that staff is addressing; overall financial statements were clean; the county and SHRA will continue corrective actions and monitoring. The board did not take further formal action beyond receipt and filing of the audit.