LA County supervisors to vote on pulling over $300 million out of homeless services agency

L.A. County supervisors are set to vote April 1 on whether to overhaul homeless spending by redirecting the vast majority of county funding from the troubled L.A. Homeless Services Authority (LAHSA). If they approve the proposal, the county would take direct control of overseeing more than $300 million taxpayer dollars it sends to the agency each year.

The vote was announced Thursday by Supervisor Lindsey Horvath. The motion from Horvath and Supervisor Kathryn Barger would yank the funding from LAHSA and instead have the county oversee the spending.

The decision to schedule the vote comes after a pair of scathing audits found a systemic lack of accountability by the homelessness agency.

“To end the madness of the homelessness crisis in Los Angeles, we must streamline and consolidate our services and resources, and be driven by measurable outcomes,” Horvath said in a statement announcing the motion.

If the proposal is approved by at least three supervisors, county staff would be ordered to start the process of shifting the money over to the county “as soon as possible,” with a deadline to finish by July 1, 2026, according to the motion.

On Friday, in a motion added to the agenda for next week's meeting, Supervisor Holly Mitchell called the timeline proposed by Horvath "aggressive." Mitchell is proposing that the board first hire a consultant to do a detailed analysis on transitioning funding away from LAHSA, and to do more outreach to unhoused people about the proposed transition.

Details of the proposal

For many years, supervisors have outsourced management of a large share of the county’s taxpayer spending on homeless services and housing to LAHSA. Much of that money comes from voter-approved sales tax revenue that began with Measure H in 2017 and was increased when Measure A passed in November.

If approved, the motion would redirect the vast majority of those funds. They would instead be directly managed and supervised by the county under a new department that would merge the county’s two main offices that manage homeless services.

The new department would be directed to follow “best practices” for contract oversight, according to the motion. That includes recommendations in a November county audit report on LAHSA.

Horvath and Barger say this would lead to more accountability over homelessness dollars spent by the county.

“A transparent, efficient system overseen by one entity, directly responsible to the Board of Supervisors and held accountable to clearly defined performance-based outcomes, will both empower the County to act and hold the County directly responsible for the voter-approved funding from Measure A,” the motion states.

LAist has reached out to all five supervisors’ offices for comment, and will update this story as we receive responses.

The backstory

The county audit released in November found LAHSA failed to adequately monitor service providers to make sure they’re complying with the terms of their funding, with half of LAHSA’s planned reviews failing to monitor whether a provider was providing the required services. The audit also found that in some cases, LAHSA gave taxpayer funds meant for other purposes to providers who weren’t supposed to receive the money.

Then, a highly critical audit of LAHSA’s handling of city funding was released last week, generating widespread public criticism of the agency. That audit, conducted by the consulting firm Alvarez and Marsal and supervised by U.S. District Court Judge David O. Carter, found that it’s nearly impossible to accurately track homelessness spending by LAHSA because the agency has failed to collect accurate data on its vendors and hold them accountable.

"This audit is another reminder of what we already know — the current homelessness services system is broken,” Horvath said in a statement on the latest audit which described the current system as a “nightmare.”

“We cannot accept this dysfunction any longer," she added. "No more waste through duplicated resources. No more contracts for services that don’t deliver."

L.A. Mayor Karen Bass has been critical of plans to pull funding from LAHSA, saying the city’s work should focus on serving unhoused people, not creating new bureaucracies.

LAist has reached out to Bass’ spokesperson for comment on the new motion.

A motion for the city of L.A. to study how to pull its funding from LAHSA was passed unanimously out of a City Council committee last week, and next heads to a full council vote for final approval in the coming weeks.