LA homeless authority facing criticism following audit

LOS ANGELES - Following the release of an audit citing financial-control issues with a joint city-county homeless service agency, Los Angeles County Board of Supervisors Chair Lindsey Horvath is proposing the creation of a county department to centralize homeless services.

The audit of the Los Angeles Homeless Services Authority (LAHSA) was requested by Horvath and the board in February, and its results were released late Tuesday.

The county Auditor-Controller Department report cited several concerns about LAHSA's management of homeless funding, such as failing to recoup cash advances provided to subcontractors, failing to establish repayment schedules for subcontractors, lack of adequate records for tracking cash advances awarded to other agencies and failure to adequately monitor contracts with recipient agencies and document whether subcontractors who received funds actually met the terms of their contracts.

LAHSA officials disagreed with many of the issues cited in the report, but acknowledged others and said many had already been recognized and recommendations from the auditor were already in the process of being implemented, "with many having already been resolved."

In its response to the audit provided to the county, LAHSA CEO Va Lecia Adams Kellum contended that several issues identified in the report were "in whole or in part attributable to LAHSA's fiscal practices during the COVID- 19 years. ... Therefore, these actions should be considered within a broader context of the public health emergency, rather than being assessed solely through the conventional accounting framework."

"LAHSA has needed reform for some time. The audit confirms that. I came to LAHSA to lead change and fix the problems. Many of the issues outlined in the audit are already known and have been addressed under our new leadership team, or changes are underway. Together we will ensure LAHSA operates efficiently to effectively address and solve the homelessness crisis." 

She also noted that the period of time examined in the audit -- fiscal year 2016-17 through 2023-24 -- "captured a time of rapid growth and expansion for LAHSA, both in its organizational size, scope and nature of its functions." She said that during that time, the agency evolved from a conventional "pass-through grant and contract administrator into a systems administrator with significant programmatic and direct services roles." She also wrote that the agency underwent a "complete agency-wide reorientation" between 2019 and 2022 to focus on public health responses due to the pandemic.

Horvath issued a statement Wednesday in response to the audit, saying its findings "underscore the urgent need for greater accountability in our homeless services system."

"LAHSA plays an important role, but the current structure is not meeting the scale of this crisis," Horvath said. "That's why I'm introducing a motion to create a new L.A. County department to centralize accountability and expedite the solutions and partnerships we know work. We must take bold steps to ensure our investments deliver real results for our communities and unhoused neighbors."

It was unclear what impact such a move would have on LAHSA and its operations.

LAHSA has come under scrutiny from public officials previously, with several Los Angeles City Council members calling for increased transparency about the agency's operations.

In response, LAHSA earlier this year introduced data dashboards on its website designed to give a better picture of its operations. The dashboards allow viewers to access data on street outreach, interim housing and time-limited subsidies; details on LAHSA-funded programs and their efficacy; as well as Los Angeles Mayor Karen Bass' Inside Safe initiative and the county's Pathway Home program.

The dashboards can show how many unhoused residents entered the rehousing system in respective City Council or Board of Supervisors' districts, how many people individual programs have helped, and the performance of local service providers.

"We've been working hard to provide the public access to clear, easy- to-digest data on homelessness in Los Angeles," Adams Kellum said at the time. "LAHSA is committed to transparency and accountability as we work toward ending homelessness for our unhoused neighbors."

LAHSA released the following statement, "The LA County Auditor-Controller’s recently released report predominantly covers issues that developed at LAHSA during a period of rapid growth and transition due to Measure H’s passage and the global COVID-19 pandemic. During those uncertain days, previous LAHSA leadership made financial decisions to ensure the survival of service providers and to avoid service disruption. This includes $50 million in working capital advances intended to last the 10-year life of Measure H. Since joining LAHSA 18 months ago, Dr. Va Lecia Adams Kellum and her new leadership team have implemented policies and procedures to improve the agency’s grant management and contract execution. LAHSA has already implemented many of the audit’s recommendations, and we continue to collaborate with the Auditor-Controller to improve the rehousing system."