May 26, 2010
By Tracy Seipel—Mercury News | The Santa Clara County Housing Authority will have to shell out $600,000 to reconstruct massive amounts of electronic data lost during a computer glitch, housing officials said Wednesday.
About 12 percent — or 1.6 million images — of the agency's backup records on tenants and owners of federally subsidized rental units disappeared in mid-January. The records, which covered 2008 and 2009, included personal information about participants in the program, such as copies of Social Security cards and driver's licenses, although officials do not believe any data fell into the wrong hands; it simply vanished.
Alex Sanchez, executive director of the Housing Authority, said both a hardware and software system failed. "Obviously, we were very concerned," Sanchez said. "We knew we were out of compliance" with federal regulations "and needed to get back into compliance as soon as possible." In fact, Sanchez flew to the U.S. Department of Housing and Urban Development in Washington, D.C., which oversees the country's 3,500 housing authorities, to reassure officials he is doing everything he can to determine how the incident occurred.
The agency's board voted Tuesday to spend the money from its reserve funds. Sanchez emphasized that only copies of the data were lost and that a team of contract workers will go back through the original information to compile a new backup database. In addition to retrieving the information, which Sanchez said should be completed by the end of the year, the Housing Authority has hired a consultant to conduct a data loss audit and an assessment of the authority's information technology system.
The agency also has negotiated an agreement with the federal government outlining steps to be taken to assure such problems won't happen again. Such steps could include buying up to $1 million worth of new hardware and software, though it's possible the agency's vendors may be on the hook for some of those costs. Sanchez said the error was caught immediately after a routine records check.
Bill Anderson, chairman of the Housing Authority's board, said he was relieved to discover that there "were no problems functionally or from an operational point of view." He said the agency has continued to make payments to landlords who participate in the subsidy program, which makes federal money available for low-income renters. He and Sanchez said the $600,000 won't make much of a dent in the $29 million reserve fund the Housing Authority has saved up over the years.
"It's a rainy-day fund," Anderson said. "Like any business or organization, we've set aside reserves for just the kind of thing that is happening now." The Housing Authority administers about $250 million of federal vouchers to about 17,000 households in the county, Sanchez said.