LAHSA's federal funding at risk after homelessness agency blows audit deadline

The Los Angeles region’s homelessness agency will miss a Tuesday deadline for submitting its federally required annual audit of the agency’s financial records, which could jeopardize its federal funding.

LAHSA executives blamed the delay on a “perfect storm” of leadership changes and competing priorities within LAHSA’s finance department, including an L.A. County review of LAHSA’s delayed payments to contractors.

“Our staff made a good-faith effort to meet the deadline,” interim CEO Gita O’Neill said at a LAHSA Commission meeting Tuesday. “However, over the past year, we've experienced several transitions. As a result, we could not get all the required materials to the auditors as quickly as needed.”

Each year, LAHSA, like all non-federal agencies and organizations that get substantial federal dollars, is required to hire an outside auditor to determine whether it’s properly tracking and reporting the taxpayer funds it manages.

LAHSA’s single audit report for last fiscal year was due March 31, nine months after fiscal year 2024-2025 ended. Earlier this month, LAHSA officials said they were on track to meet the March 31 deadline.

Justin Measley, lead auditor for the firm CliftonLarsonAllen, had warned that LAHSA was months behind schedule turning over records.

At a meeting Tuesday, Measley explained that because of LAHSA’s earlier delays, the firm would need at least an additional week to complete a quality-control review process.

“We’re moving at the fastest pace we possibly can,” Measley said.

On Tuesday, LAHSA officials said the single audit will be filed “at the earliest possible opportunity,” within the next few weeks.

Federal funds at risk

LAHSA manages hundreds of millions of federal dollars each year, through grants from the U.S. Office of Housing and Urban Development, or HUD.

O’Neill said the agency has been communicating with HUD officials regularly about the missed audit deadline and is “hoping for understanding.”

Janine Lim, LAHSA’s deputy chief financial officer, said she’s also been talking with HUD.

“They seem amenable to our situation and to our stated timelines,” Lim said. “So, we are hopeful that this will be a good outcome, despite having missed the deadline.”

HUD told LAist Thursday that the agency expects LAHSA to follow federal rules.

“Submitting a Single Audit is a requirement for certain recipients of federal funds, including LAHSA," an agency spokesperson said in a statement. "HUD expects federal recipients to adhere to those requirements.”

What went wrong 

Measley said LAHSA’s financial statements should have been turned over around last December, but LAHSA only submitted them this month, after blowing through multiple extended deadlines.

Measley said he contacted LAHSA’s governing commission about the overdue documents March 3.

He said he also previewed his firm’s findings, noting one “significant deficiency” in its draft report, related to LAHSA’s timeliness in detecting accounting errors.

LAHSA could contest those findings, officials said. That would add additional back-and-forth between the homelessness agency and accounting firm before the audit report is ready to file.

Justin Szlasa, a LAHSA commissioner who chairs the audit subcommittee, told LAHSA’s CEO he’s concerned that there was no time provided for LAHSA’s governing body to review the audit report.

“Next year, we will absolutely do that,” O’Neill responded. “I think this year, we were under the gun, and so we felt it was the most important thing was to get it uploaded on time.”

O’Neill said the agency hired accounting firm KPMG to help modernize LAHSA’s financial systems, with a focus on its contractor payments.

“We have an outside, trusted voice to help us create a system that works going forward because the system we have is not working at all, in finance,” O’Neill said.