The Brief

Auditors are flagging major problems with the handling of tax dollars by the L.A. Homeless Services Authority.

The failures surround poor bookkeeping and accounting of taxpayer money at the agency — which spent over $800 million in public funds last fiscal year. The issues emerged despite previous audits flagging serious oversight problems in prior years. The latest audit was conducted by an outside firm hired by the agency to meet federal requirements.

The agency’s financial statements initially included “significant” inaccurate amounts that needed to be adjusted late in the audit process, auditors found in their review of LAHSA’s last fiscal year that ended in June 2025.

The findings are from the federally-required “single audit,” a draft of which was presented to LAHSA’s audit committee on Monday. It found the inaccuracies stemmed from a "significant deficiency” in LAHSA’s “internal controls,” which are supposed to safeguard against financial inaccuracies and fraud.

The accounting failures contributed to delays in completing the audit — which was due to the federal government on March 31 — according to the draft report. Missing that deadline can put future federal funding at risk. LAHSA officials said at the committee meeting that they hope to submit the final audit report this coming Friday, more than three weeks after the deadline.

At a public meeting Monday, LAHSA CEO Gita O’Neill told LAHSA’s audit committee that her team was working to implement many of the auditors’ recommendations, which she called “great suggestions.”

The draft audit report now goes to the LAHSA Commission for approval on Friday. The audit committee was asked to approve it Monday but didn’t have majority support to move forward.

L.A. Mayor Karen Bass, who oversees the agency and is the only elected official on LAHSA’s governing commission, did not respond to a request for comment through a spokesperson.

The backstory

In response to previous audits that found major problems with LAHSA’s oversight of tax dollars, county supervisors decided last spring to withdraw all of the county’s $300 million-plus in annual funding of services through LAHSA and instead have the county directly manage it starting on July 1.

Problems identified in the latest audit reiterate why the county pulled its funding, Supervisor Kathryn Barger said in a statement Monday.

“LAHSA’s inaction and inability to meet its audit deadline is inexcusable,” Barger said.

In a statement, Supervisor Lindsey Horvath said the “significant financial problems” found in the audit give “further confirmation” why the county decided to shift its funds out of LAHSA.

“Accountability isn’t optional; it is required to end this emergency. Anything less is unacceptable,” Horvath said.

The city is considering moving in a similar direction as the county. A key City Council panel — its homelessness committee — recently recommended the full council start shifting city homelessness funding out of LAHSA over the course of the next fiscal year. Bass has urged caution, saying moving too quickly to shift funding could disrupt services for unhoused people.

LAHSA has long functioned as the L.A.’s homeless services department, with over $300 million in city money expected to flow through LAHSA this fiscal year.

As of last summer, LAHSA had $380.5 million in assets and $381 million in liabilities, and received a total of $810 million in operating revenues during the last fiscal year, according to the latest audit.

Other problems identified by auditors

During Monday’s discussion, lead auditor Justin Measley said LAHSA did not disclose millions of dollars in payments to a service provider whose executive was married to LAHSA’s CEO at the time, Va Lecia Adams Kellum. The audit is required to list “related party” transactions, Measley said, which involve an organization with immediate family ties to LAHSA’s leadership. He said auditors only learned about it later through reviewing news media coverage.

“The article is what triggered us knowing about this specifically,” said Measley, who works for the auditing firm CliftonLarsonAllen.

LAist uncovered documents showing Adams Kellum’s signature was on a $2.1 million contract and two other contract amendments with Upward Bound House, the Santa Monica-based nonprofit where her husband Edward Kellum works in senior leadership. The contract named Adams Kellum as the LAHSA official authorized to administer it.

Va Lecia Adams Kellum, former CEO of the Los Angeles Homeless Services Authority, at a news briefing at L.A. City Hall in June 2023.

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Gary Coronado

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Los Angeles Times via Getty Images

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A LAHSA-commissioned investigation cleared Adams Kellum of wrongdoing in part because “her signature was unintentionally applied by her staff, not by herself,” according to a summary released by LAHSA. LAHSA spokesperson Paul Rubenstein previously told LAist that Adams Kellum herself “mistakenly signed” the agreements. LAHSA officials also previously distributed an email from Adams Kellum’s official account to a colleague about one of the contracts with her husband’s employer, which stated “Please delete the document that I signed accidentally.”

Last year, state investigators at the Fair Political Practices Commission launched a conflict of interest investigation into the matter, which is ongoing.

Monday’s audit committee meeting also included discussion of the auditors’ findings that LAHSA is locked into paying $75 million for long-term leases over the coming years that cannot be canceled. Those leases are largely through its master leasing program that started over the last couple of years, which leases 14 apartment buildings, totaling 772 units, to provide housing for unhoused people. LAHSA management says the master leasing program is currently significantly underwater financially.

A presentation last week by LAHSA management said the master leases are causing an annual budget hit of $10 million to LAHSA, which is prompting the agency to pull from other grants to pay for the leases.

LAHSA’s lease accounting was at the center of a "significant” correction to the agency’s financial statements late in the audit process, the audit states in its findings.

The auditors also found that LAHSA failed to comply with requirements for payroll costs that it charged to the federal government. The agency’s management failed to ensure timesheets for its employees were approved for three of the 40 timesheets the auditors reviewed, despite the law requiring federally-funded salaries to be based on accurate records of work, auditors found.

Southern California was built on radio.

"I can still hear the jingle KFWB News 98,” wrote  Taline in Los Feliz, during a recent conversation on LAist's daily news show, AirTalk, which airs on 89.3 FM. “I grew up hearing that in my dad's minivan on the way to and from school. It has a special place in my heart.”

Back in April, broadcast company Audacy announced KNX News — one of the last-remaining all-news FM stations — was leaving the FM dial where it had simulcast on 97.1 FM since 2021. The station, which is also one of the oldest in L.A., is not budging from 1070 AM where it has been on the air for more than 100 years. The move away from FM officially happened in May to make way for a new sports talk station, which Audacy officials called an area of growth for advertisers in today’s media landscape.

The move is one in a long line of changes for radio and a reminder that before podcasts, playlists and algorithms, many Southern Californians built their days around radio broadcasts.

Radio, a daily ritual

The construction of KNX

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Herman J. Schultheis

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Los Angeles Public Library

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Michael Jackson, a well-known KNX, personality

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Los Angeles Public Library

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Larry Mantle, now in his 41st year hosting AirTalk, remembers being a kid and dreaming of what it might be like to be behind the mic at one of these radio stations.

“ I grew up with KNX," he said. “My dream job as a kid was to be an anchor on KNX or KFWB, the two local all-news radio stations, 'cause there was nothing like hosting AirTalk that even existed at that point.”

Mantle opened up the phone lines on a recent show to hear from his fellow SoCal radio lovers about the shows they miss and the memories they have. Here's what they had to say:

A love for radio, then and now  

A pilot of KMPC's traffic alert helicopter pictured with his daughter and grandson.

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Los Angeles Public Library

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A 1963 picture of Valley State College (now Los Angeles Valley College) preparing to launch KVCM

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Larry Leach

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Los Angeles Public Library

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“When you'd walk down Hollywood Boulevard where the station was, you could hear it playing as you went down the street,” said  Olivia in Glendale about KLAC 570 with Al Jarvis.

 Larry in Yorba Linda shouted out KBCA Jazz for its 24-hour jazz, saying “When I first moved out here in '68 from Phoenix, which had like an hour a week, it was a real wonder.”

 Mark in Glassell Park emailed that he loves KCRW’s Henry Rollins, writing, “I used to bristle at his unique DJ persona, but over time, I came to love him and his crazy eclectic playlists. I find his knowledge in history and punk rock fascinating. He's a gem and a legend."

"I'd like to give a shout-out to all the DJs working at KXLU, the college station at Loyola Marymount University, said  Jeremy in Culver City in an email. “That station's been on the air for nearly 60 years. I believe it's one of the best examples of what's possible with radio."

"KFWB and KRLA back in the day when they were rock music stations —  Dr. Demento, one of my favorite on-air personalities, also had eclectic music taste," said  Carrie in Desert Edge.

“ Dr. Demento was must listening when I was a kid in junior high school at Le Conte Junior High in Hollywood,” Mantle added. “Every Sunday night on KMET, we would make sure we were listening to Dr. Demento and his funny records.”

The question remains…

An 11-year-old winning a car in a KMPC contest in 1963.

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Los Angeles Public Library

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Listener support is vital to any radio station, and it’s clear KNX has many lifelong fans. AirTalk listeners highlighted their support for household KNX names over the decades like Bill Keene, Melinda Lee, Mike Roy and Jackie Olden.

As KNX makes changes, many are watching closely and thinking about the future of radio.

Listeners like Tommy in La Quinta are left wondering if the radio dial will be the same…

“I’m a hardcore listener, but I don't know about casual listeners [and] if they'll tune to AM,” he said.

After months of hand-wringing, Los Angeles and LA28 have come to a tentative agreement on how Olympics organizers will reimburse the city for its expenses for the 2028 Summer Games.

According to the deal, the private Olympic organizing committee will pay upfront for the estimated cost of services that are not eligible for federal reimbursement, like trash pick-up and traffic control. Under another proposal, the city would also be able to tap an LA28 contingency fund if it isn't fully repaid by the federal government for policing costs at Olympic venues.

The agreement is nearly nine months overdue and still needs approval by Mayor Karen Bass and the City Council.

The 2028 Olympics are intended to be privately financed, and an existing city agreement with LA28 states that the Olympics organizers, not L.A., will pay for extra costs for public services in support of the Games. But L.A. is the financial back-stop for the Olympics, meaning if LA28 goes in the red, taxpayers will pick up the bill.

Beyond that, the city services agreement presents another area where L.A. could incur additional unexpected expenses for hosting the Games. L.A. City Councilmember Monica Rodriguez warned LA28 CEO Reynold Hoover earlier this year that a bad deal could "bankrupt" the city.

Jacie Prieto Lopez, an LA28 spokesperson, and Paul Krekorian, who leads the city's office of major events, said in statements that the freshly inked agreement would help deliver a fiscally responsible Games.

"Mayor Bass’ priority is that the 2028 Olympic and Paralympic Games be fiscally responsible, protect taxpayers, and benefit Angelenos for decades to come. This agreement helps deliver that commitment," Krekorian said.

But the contract between the two parties doesn't fully resolve one of the biggest areas of financial risk for the city: the enormous cost of security for an event as extensive and high-profile as the summer Olympics and Paralympics.

Organizers are counting on the federal government to pay for public safety at Olympic venues that are considered part of a "national special security event." That includes costs for LAPD staffing. LA28 has not included security costs in its $7.1 billion budget — a fact that City Attorney Hydee Feldstein Soto criticized earlier this year.

The federal government has so far allocated $1 billion for security costs for the Olympics. Exactly where those federal funds will go has not yet been determined, and there's no guarantee they will cover all of L.A.'s policing costs.

To address this, city officials have also proposed an amendment to a 2021 agreement between the city and LA28. That amendment would establish that if L.A. is not reimbursed by the federal government for all its eligible expenses, it could dip into LA28's contingency fund of $270 million before the private organizing committee could use those funds for any legacy projects.

But that bucket of money will first be used for any costs that Olympics organizers still owe if they run out of revenue — meaning if the Olympics don't turn a profit, the city's access to that money will depend on how much is left for the taking.

Civil rights attorney Connie Rice, who has been tracking the city's negotiations with LA28, told LAist the agreement was a "PR document" not a deal. She pointed out that if the federal government does not pay up for security spending as expected, L.A. could be in trouble.

" It leaves the taxpayers with a GoFundMe strategy," she said.

The city services agreement lays the groundwork for more negotiations between LA28 and the city. Each venue will require its own agreement, to be negotiated by July 1, 2027. Venues in the city of L.A. include Dodger Stadium, the L.A. Convention Center, L.A. Memorial Coliseum and the Venice Beach Boardwalk.

The City Council's ad-hoc committee on the 2028 Games will meet Tuesday afternoon to vote on the agreement.