LA's homeless agency is ill-equipped to manage $140 million in new funds, review finds

About a year ago, L.A. County voters approved a new sales tax to fight homelessness. Now a new review has found the agency tasked with managing tens of millions of those taxpayer funds is ill-equipped to do so.

L.A. County's Auditor-Controller, in a report released Tuesday, found the L.A. Homeless Services Authority is understaffed and lacks adequate financial management to effectively roll out and monitor about $140 million in new funds the agency is receiving.

The infusion marked a steep rise in LAHSA's annual budget and is a major chunk of the $355 million being generated a year by Measure H. 

"There's going to be natural growing pains whenever you scale up," said Rabbi Noah Farkas, chair of the L.A. Homeless Services Authority Commission, which oversees the agency. "Unlike many Silicon Valley corporations that scale up without showing where all the growing pains are, in government it's just different, we have to be transparent."

The review found:

• Delays in signing up and paying contractors.
• Auditors found nearly $5 million of the active $6.9 million in accounts payable was between one and 120 days past due
• High staff turnover in the finance department — five of seven accounting positions were vacant.

Farkas said LAHSA has completed a comprehensive staffing assessment and is looking for a new chief financial officer to oversee finances. The agency has also begun overhauling its finance department. 

Staffing, he said, has been a challenge for any group involved in homelessness efforts for the past year or so.

"The entire sector is growing," he said. "Everyone's trying to snap up and hire up because there's just so much more capacity."

LAHSA has lost employees to other agencies, he said. The agency has, however, hired about 150 people in the last year.

L.A. County Supervisor Mark Ridley-Thomas said the county would do whatever necessary to correct the problems "in short order."

"When the voters of L.A. County passed Measure H, they expected accountability, transparency, and a level of performance that had not been previously witnessed," he said. "We're trying to make the strongest foundation possible to combat homelessness."

Which is why, he said, the county put a Measure H monitoring committee in place and then requested an audit of LAHSA to identify any issues.

Officials have pledged to house 45,000 people and keep another 30,000 from entering homelessness in the first five years of the ten-year tax. They've also stressed that homelessness at L.A. County's level took a long time to devolve into the crisis it is today and will take patience to fix. 

In addition to L.A.'s voters, those people living on the streets are also eagerly anticipating Measure H's success.

"I have lots of hope," said Matthew Yonce, who's been in a tent in Hollywood since his mother died seven years ago and he was evicted from the apartment the two shared. "This is the best time in the world to be homeless, they don't want us on the streets."

He said he recently found a caseworker to help him apply for housing and hopes that getting into an apartment might allow him to rebuild his mental health and career prospects.

His neighbor, Victoria.

"It's a lot of money, and it's not here," she said. "I don't see it."

If anything, she said, there are fewer places to go for food, showers, and general help.

Yonce, however, was confident local officials would find a way to succeed.

'The Olympics are coming," he said. "They're not going to want tourists coming here and seeing this."

Update: An earlier version of this article twice used the term “audit” to describe the report. County officials said it was a “review.”

Read the report: