OIG audited the Richmond Housing Authority due to a complaint alleging that the PHA 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 PHA procured goods and services and managed tenant rents for its public housing program in accordance with HUD requirements.

OIG found that the complaint allegations had merit. The PHA didn’t 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 PHA wrote off tenant accounts without using alternative methods of collection. These conditions occurred because the PHA disregarded HUD procurement requirements. Also, the PHA didn’t have adequate policies and procedures for rent collection. As a result, it couldn’t support that the use of $541,651 in HUD funds for legal and accounting services were best for the PHA. 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.

OIG recommended that the Acting Director of the San Francisco Office of Public Housing require the PHA to: (1) provide documentation showing that $304,921 paid for eviction legal services and $236,730 paid for accounting services were best for the PHA 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 three years; and (4) develop and implement policies and procedures to address the deficiencies in rent collection.

• HUD Audit: 2016-LA-1004, April 2016