5 takeaways from LA’s troubling new homelessness spending audit

A long-awaited audit of homelessness spending in the city of Los Angeles was released this week. The findings portray a system that cannot account for exactly what local taxpayers have received in recent years in exchange for billions of dollars in funding.

The audit was commissioned by U.S. District Judge David O. Carter. He has been overseeing a case brought by the L.A. Alliance for Human Rights, an advocacy group made up of residents and business owners, against local governments over failures to ameliorate the region’s growing homelessness crisis. Settlements in that case have led to requirements for more shelter beds.

The court case has also produced one of the deepest looks yet at how L.A.’s homeless services system has spent billions of dollars in recent years. The highly anticipated findings were released Thursday in a draft audit report published by the court.

At a time when public frustration over homelessness in L.A. is high, and elected officials are considering defunding the region’s lead homeless service agency, the audit could have a large impact on how the city tackles homelessness moving forward.

Here are five takeaways.

1. No one’s collecting clear data on spending

Many local governments are spending money on homelessness throughout the L.A. area. Among the largest are the county of L.A., the city of L.A. and the joint city-county agency known as the Los Angeles Homeless Services Authority, or LAHSA.

The auditors found that data collection across all these government entities is fragmented and inconsistently reported, making it difficult to determine what costs are associated with each shelter bed.

The auditors wrote: “The lack of uniform data standards and real-time oversight increased the risk of resource misallocation and limited the ability to assess the true impact of homelessness assistance services.”

2. The system connecting people to services is disjointed

Unhoused people in L.A. are supposed to be matched to shelter beds and available housing through what’s known as the “coordinated entry system.”

But auditors said L.A.’s system is far from coordinated. Instead, they found the process to be siloed, opaque and potentially unfair in who gets prioritized for help.

“This variation caused confusion among stakeholders, including service providers, and increased the risk of inequitable and inefficient resource allocation, potentially delaying timely shelter and housing placements,” the auditors wrote.

3. L.A.’s lead homelessness agency doesn’t track subcontractor compliance

The auditors found that when city and LAHSA officials review invoices from the service providers they pay to help unhoused people directly, they’re mainly looking at how much funding is distributed and to whom, not whether providers are delivering adequate services.

This conclusion echoes a separate report published in November by L.A. County auditors, who also found that LAHSA often fails to monitor contract compliance.

As a result of these oversight lapses, LAHSA officials could have approved funding for services they don’t know were ever actually provided, the auditors said.

The auditors wrote LAHSA’s contract reviews “did not include receipts or clear indications of the specific services delivered, allowing for potential misalignment between the services being reimbursed and those outlined in the service providers’ contracts.”

When LAHSA officials did look deeper into a small subset of contracts, they often found problems, according to the audit.

“LAHSA’s monitoring activity revealed a high level of noncompliance among the limited number of service provider contracts reviewed,” the auditors wrote.

4. Different providers charge widely different prices for the same services

The auditors found that the city has been paying different providers very different sums of money for similar services.

One reason for those differences stems from the greater level of help needed by certain unhoused people, the auditors found. But they also chalked up the varying costs to uneven staffing levels across providers and inconsistent tracking of outcomes.

After reviewing per-bed daily costs at some shelters, the auditors found that “personnel expenses ranged from $67 to $7, food or meal expenses ranged from $18 to $7, and security expenses ranged from $32 to $2.”

5. Few people are leaving shelters for permanent housing

The auditors looked at a sample of shelters and interim housing sites across the city to determine how often people are leaving temporary housing for permanent housing. They found a fairly low success rate at getting shelter residents housed and a high likelihood of residents returning to the streets.

In the previous fiscal year, about 22% of shelter and interim housing residents moved into permanent housing. About 48% left shelter and returned to homelessness.

Service providers have long said that “document readiness,” the process of gathering all the identification documents needed to move into permanent housing, is one of the biggest barriers to getting people housed. But the auditors found that even long-term shelter residents who had documents in hand appeared to be no more likely to get housed than someone who had not.

“Overall, the reported metrics did not demonstrate consistent trends or correlations,” the auditors wrote. “A high percentage of document-ready participants or prolonged stays did not appear to result in higher permanent housing placements.”