Audit Reveals L.A.'s Failure to Track Billions in Homelessness Spending, Raising Accountability Concerns

Yahoo

07-03-2025

An independent audit commissioned Thursday by U.S. District Judge David O. Carter shows how L.A. city officials have neglected tracking homelessness spending. The city has failed to collect accurate data on its vendors, relying mostly on outsourcing from an agency. This highlights another frustrating case of taxpayer dollars becoming misallocated, after auditors reviewed $2.4 billion in city funding.The global consulting firm Alvarez and Marsal audit highlights inadequate financial oversight that paints a lack of accountability for taxpayer dollars. "Insufficient financial accountability led to an inability to trace substantial funds allocated to the City Programs," the report states. "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."Most of the discrepancies were found at the Los Angeles Homeless Services Authority (LAHSA). The government agency has outsourced management of much of the city's homelessness funding—including sheltering, feeding, and serving people.Tracking the spending became impossible when auditors reviewed the poor documents provided by the agency. Auditors also found that LAHSA 'failed to verify whether the services invoiced were provided.'Elizabeth Mitchell, an attorney for the L.A. Alliance for Human Rights whose lawsuit prompted Carter to order the audit, said in a statement: 'These findings are not just troubling — they are deadly."She emphasized the failure of financial integrity, programmatic oversight, and dysfunction of the system resulting in devastation on the streets for both housed and unhoused. "Billions have been squandered on ineffective bureaucracy while lives are lost daily. This is not just mismanagement; it is a moral failure.'While managing the homelessness spending was mainly outsourced to LAHSA, the responsibility for the city's tax dollars lies in the hands of the elected officials: Bass and the City Council. All five members have been invited to comment at Carter's scheduled public hearing to discuss the audit on March 27. This also includes Council President Marqueece Harris-Dawson, City Controller Kenneth Mejia, county Board of Supervisors Chair Kathryn Barger and the auditors.An incredibly flawed system prompts the question about stripping hundreds of millions in annual funding out of LAHSA to instead have cities and counties manage homelessness spending.Mayor Bass has been critical about defunding LAHSA before. 'New urgency has been at the core of our work to bring people off the street, not the creation of new bureaucracy,' Bass said in a statement. 'We can't afford to just create new paperwork or slow momentum to reduce encampments and connect people with housing and mental health treatment.L.A. County Board of Supervisors Committee chair Nithya Raman also emphasizes that LAHSA has shown its ability to make the most from homeless services contracts by leveraging city funds to secure additional federal and state funding.'My recommendation to this committee is that we move this forward so that we can be cognizant of the benefits that this kind of effort could bring,' Raman said, 'but also for us to be able to answer what potential losses we might face as a result of bringing these contracts in house.'
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