We audited the Richmond Housing Authority due to a complaint alleging that the Authority violated procurement requirements related to legal and accounting services and wrote off tenant debts improperly.  The objective of the audit was to determine whether the Authority procured goods and services and managed tenant rents for its public housing program in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.

The complaint allegations had merit.  The Authority did not conduct procurement procedures for eviction legal and accounting services until October-November 2014.  When it conducted procurement procedures, its procurements had deficiencies and its contracts omitted the mandatory Federal clauses.  In addition, the Authority wrote off tenant accounts without using alternative methods of collection.  These conditions occurred because the Authority disregarded HUD procurement requirements.  Also, the Authority did not have adequate policies and procedures for rent collection.  As a result, it could not support that the use of $541,651 in HUD funds for legal and accounting services were best for the Authority.  It also lost revenue by improperly managing its rent collection process, not collecting on debts owed, and improperly writing off $109,770 in rents and other charges.

We recommend that the Acting Director of the San Francisco Office of Public Housing require the Authority to (1) provide documentation showing that $304,921 paid for eviction legal services and $236,730 paid for accounting services were best for the Authority or repay its public housing program from non-Federal funds, (2) amend its eviction legal services contracts to include all required clauses, (3) submit a list of all procurement contracts over $10,000 and its most recent 12-month vendor payment history to HUD for review annually for 3 years, and (4) develop and implement policies and procedures to address the deficiencies in rent collection.