For LA council member, new homeless services audit was ‘the straw that broke the camel’s back’

The fallout continues from an audit last week that found serious accounting issues at the Los Angeles Homeless Services Authority (LAHSA).

The findings leave LAHSA’s fate unclear. Created 31 years ago, the agency is jointly overseen by the county and the city of L.A. This year, the city contributed nearly $307 million to LAHSA’s annual budget of $875 million. The agency also receives $348 million in funding from L.A. County, and additional money from the state of California and the federal government.

Some top city and county officials are now openly questioning whether that money is well spent.

First, L.A. County Supervisors Lindsey Horvath and Kathryn Barger last week called for pulling hundreds of millions of dollars in funding to the agency. Now, some L.A. City Council members want to follow suit.

Councilmember Monica Rodriguez introduced a motion — seconded by Councilmember Bob Blumenfield — that aims to sidestep LAHSA and keep homelessness funds in the city’s hands.

“The audit was just, for me, the straw that broke the camel's back,” Rodriguez told LAist. “I'm tired of the people's money being expended in a manner that has zero transparency, zero consequences for failure to perform and zero feedback on what the outcomes are.”

Rodriguez and other lawmakers are reacting to an audit released last week by the L.A. County Auditor-Controller’s office which found LAHSA advanced close to $51 million dollars to homeless service providers without formal agreements to get that money repaid. The audit also found LAHSA routinely pays providers late, and often fails to monitor whether providers are following the requirements in their contracts.

What the city is considering

Rodriguez’s motion would first need to be approved by the housing and homelessness committee before a vote by the full council. It asks city officials to report back on “how the City of Los Angeles can directly contract with Service Providers on all programs we currently fund. This would allow the City to bypass [LAHSA] who historically administers all programs.”

Rodriguez has frequently grilled LAHSA officials in City Council hearings about what she sees as the agency’s lack of transparency over spending.

“I want to make sure that taxpayers are protected — that they know where their money is being spent, that it's spent in a fashion that will be accountable, and there will be transparency,” Rodriguez said. “Right now, I don't feel that's what they're getting.”

In a separate motion last week, Horvath and Barger proposed redirecting county funds away from LAHSA and into a new county department tasked with overseeing homeless services. Horvath chairs the board and also serves as a LAHSA commissioner. Their motion is scheduled to come up for a vote in the Board of Supervisors meeting on Tuesday.

Would the city do a better job?

Not everyone agrees that homeless services would improve if funds were stripped from LAHSA and administered by the city and county directly.

Mike Arnold was LAHSA’s executive director from 2009 to 2014. He acknowledges that LAHSA experienced growth issues as its annual budget swelled from $63 million in 2014 to more than $800 million in recent years. But he doubts the city or the county will do much better at administering funds.

“How long does it take the city to fill a pothole?” Arnold said. “Every time homelessness becomes a hot political issue, I think, there's a lot of activity done to divert attention from the real issues.”

LAHSA was created in 1993 as a joint city-county agency in order to coordinate the response to this region-wide problem. This isn’t the first time elected leaders have floated the idea of pulling back from LAHSA. But with frustrations running high, some are supporting efforts at both the county and the city to chart a different course.

On Monday, Rodriguez sent a letter of support to Horvath and Barger for their efforts at the county to withdraw funds from LAHSA. She said new homelessness departments embedded within the city and county could collaborate without LAHSA’s involvement.

“My goal is for the departments to partner to more efficiently and effectively administer public funds and actually solve the homelessness crisis,” Rodriguez wrote.

How LAHSA is responding

Paul Rubenstein, LAHSA’s spokesperson, sent a statement saying many of the problems identified in the audit happened during a period of rapid growth for LAHSA, and during the COVID-19 pandemic. He said Va Lecia Adams Kellum, the agency’s chief executive, has already implemented a number of changes recommended in the audit since she came to LAHSA in early 2023.

“LAHSA will work with the City to evaluate the best path forward to ensure our community ends unsheltered homelessness,” Rubenstein wrote. “While that City legislative process unfolds, LAHSA will remain focused on improving the rehousing system and bringing more of our unsheltered neighbors inside.”

Upcoming meetings

L.A. County Board of Supervisors is scheduled to consider a motion introduced by Horvath and Barger:

• Time and date: Tuesday, Nov. 26, at 9:30 a.m.
• Location: 500 West Temple St., Room 381-B, Los Angeles
• To call in: (877) 226-8163 | Participant Code: 1336503
• Watch virtually
• Full agenda