Homeless service providers that owe millions in cash advances to the county revealed, after pressure from judge

A federal judge on Thursday demanded the names of several Los Angeles-area service providers that received more than $48 million in advances from the region’s top homelessness agency but have not yet paid it back.

The unpaid debt was revealed in a recent audit of the Los Angeles Homeless Services Authority, which administers funding to nearly 100 providers in the city and county of L.A. The taxpayer funds in question were doled out in 2017.

“I want those gifted providers on the record,” said U.S. District Judge David O. Carter during a hearing in downtown L.A. “This court is not going to forgive and forget that.”

Earlier in the day-long hearing, he demanded to know who these “rather special people” were and kept asking that question as the hearing went on.

County authorities eventually provided the names Thursday afternoon, after a midday recess.

Service providers that received funding advances

After the dozens of service providers were identified, Carter went through them line by line, dollar by dollar.

As of July 2024, they include:

• People Assisting the Homeless (PATH) — more than $8.2 million owed, a little more than $40,000 recouped.
• Special Services For Groups, Inc. — more than $5.8 million owed, less than $815,000 recouped.
• Volunteers of America of Los Angeles — more than $4.9 million owed, a little more than $135,000 recouped.
• St. Joseph’s Center — more than $2.8 million owed, about $120,000 recouped.
• Lamp Community, Inc. — more than $2.4 million owed, about $26,000 recouped.

A list of the providers who received advances.

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Makenna Sievertson/LAist

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Thursday’s hearing came after a scathing audit released Tuesday night by the L.A. County Auditor-Controller’s office found that contracts by LAHSA with various providers didn’t set proper standards or measure outcomes, resulting in inconsistent and poor care.

“I’m starting to believe, and I hope I’m wrong, that this is the tip of the iceberg,” Carter said in court, adding that he analyzed the findings “all night long.”

The L.A. County Board of Supervisors is now considering a proposal to pull funding from the embattled agency. A vote is scheduled for Tuesday.

 Audit costs scrutinized 

Carter originally scheduled the hearing so he could ask the city, county and LAHSA to “justify their delays and non-payment” of outstanding fees to an independent audit he’s overseeing.

The probe, by the firm Alvarez & Marsal, was launched in order to find more information about where the money was going and how it was being spent. It’s related to a settlement reached almost two years ago in a long-running lawsuit between advocates for the unhoused and the city and county of L.A.

The city of L.A. originally agreed to pay Alvarez & Marsal $2.2 million.

But because of delays in delivering data from LAHSA, the bill has grown by a little more than a million dollars, and authorities are questioning whether they should pay the extra money.

A majority of the money is to pay for auditing of services provided by the county, according to court documents.

That leaves $440,000 to be paid, and attorneys for L.A. questioned whether the additional money was necessary and needed to be paid by the city.

Carter said it was. He said he was “astounded” by the budget for the audit the council approved in the first place, adding that it had “every possibility of being inadequate.” The price range the firm originally provided was between $2.8 million and $4.2 million.

He asked the city’s attorneys if this was an effort by the council to “underfund” the audit so it was incomplete, which they denied.

Carter then repeatedly pressed for a guarantee that the $440,000 would go before the City Council for a vote. The judge said he’d be happy to hear from L.A. Mayor Karen Bass or City Administrative Officer Matt Szabo.

“This audit isn’t going to be shortchanged by a couple hundred of thousands of dollars by a city council,” he said during the hearing. “I will not allow this to be an inadequate audit.”

Later in the afternoon, Valerie Flores, a chief assistant city attorney, confirmed the $440,000 payment will go before the City Council the week of Dec. 2.

The first draft of the audit is now expected in late February, according to Alvarez & Marsal.