Scathing audit finds L.A. homeless spending lacks oversight, accountability

Yahoo

08-03-2025

Homeless programs funded by the city of Los Angeles are a virtual black hole when it comes to oversight and tracking of outcomes, a court-ordered, independent audit has found.
The audit, released on Thursday, was conducted by Alvarez & Marsal, a global consulting firm. It looked at four years of homeless services managed by the Los Angeles Homeless Services Authority (LAHSA) from June 1, 2020, through June 30, 2024.
A&M said it encountered information gaps and incomplete data that hindered its ability to assess the results of approximately $2.3 billion in homeless spending over that time period.
'Such gaps in documentation complicated efforts to track expenditures comprehensively, highlighting the need for more accurate recordkeeping within LAHSA's financial and performance oversight processes,' A&M said in its executive summary.
In many instances, auditors found that independent contractors operated under vague arrangements with weak oversight, and the money they received couldn't be properly accounted for.
In one example, A&M's team found inconsistencies with the 'exit rate' of homeless individuals into permanent housing during the 2023-24 fiscal year.
'A sample of sites reported a median permanent housing exit rate of approximately 22.0%, whereas 47.8% of exits resulted in a return to homelessness, exceeding the rate of exits to permanent housing,' the report stated.
Auditors also found that LAHSA frequently approved payments to contractors before verifying that services were provided.
Responding to A&M's report, Councilwoman Monica Rodriguez labeled LAHSA a 'modern-day Titanic.'
'The audit's findings confirm what I've repeatedly warned about—billions have been wasted on homelessness without oversight, accountability, or results,' Rodriguez told KTLA on Friday. 'For over a year, I've pushed legislation to end this failed arrangement, while my colleagues have stalled for more than a year, pouring taxpayer dollars into a system and programs that continue to fail. This blatant mismanagement reflects leadership failure and it is time to untether the city from this modern-day Titanic known as LAHSA.'
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The L.A. Times obtained a statement from LAHSA acknowledging the 'siloed and fragmented nature of our region's homeless response' for the oversight and accountability issues.
The audit was ordered by U.S. District Judge David O. Carter and stemmed from a 2020 lawsuit filed by the L.A. Alliance for Human Rights. The Alliance, comprised of local business owners and 'concerned residents,' alleged the city had failed to protect public health and safety by allowing rampant homelessness.
The suit was settled in 2022, but the group has accused the city of failing to live up to the terms, which included providing more beds and housing.
On her first day in office in 2022, Mayor Karen Bass declared a state of emergency on homelessness and launched her hallmark Inside Safe program. Among its goals is to dramatically lower the cost of building affordable and temporary housing, get people off the streets and provide them with various services.
According to the program's website, nearly 3,900 homeless individuals have 'moved indoors' since the mayor took office, and 878 have found permanent housing. The latest point-in-time count found more than 75,000 people living on the streets of L.A. in 2024.
The mayor's office did not immediately respond to KTLA's request for comment on the audit.
California Governor Gavin Newsom, who once threatened to withhold homeless funds from cities and counties, has pushed for greater accountability.
'This reaffirms the state's prior findings that local governments need to do a better job of tracking homelessness spending,' Tara Gallegos, a spokesperson for Newsom, told KTLA. 'That's why Governor Newsom has implemented new, strict accountability measures to increase accountability and ensure every dollar is spent effectively.'
Gallegos directed the public to visit accountability.ca.gov to track spending on homelessness and affordable housing.
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