Comments
HOUSING/HOMELESSNESS - A court-ordered audit has revealed a deep lack of financial oversight in Los Angeles’ homelessness spending, raising concerns about the mismanagement of billions of taxpayer dollars. The audit, released by U.S. District Judge David O. Carter, found that the Los Angeles Homeless Services Authority (LAHSA) and city officials failed to accurately track expenditures, verify services, or ensure accountability among vendors.
The review, conducted by Alvarez & Marsal, found that $2.4 billion in city funding for homelessness assistance was marred by poor documentation, fragmented record-keeping, and an overall failure to monitor how public funds were spent. Auditors struggled to trace spending, citing a lack of uniform financial reporting and real-time oversight that led to high risks of misallocation.
Findings Highlight Systemic Failures
One of the most alarming revelations was LAHSA’s inability to provide documentation for approximately 2,300 housing sites under its management. Seventy percent of the contracts reviewed lacked any record of expenses over the past year, making it impossible to determine whether services were actually delivered. The audit also noted that LAHSA failed to verify invoices submitted by vendors, raising concerns about potential waste and fraud.
“The failure of financial integrity, programmatic oversight, and total dysfunction of the system has resulted in devastation on the streets, impacting both housed and unhoused residents,” said Elizabeth Mitchell, an attorney for the L.A. Alliance for Human Rights. “This is not just mismanagement; it is a moral failure.”
City and county officials reacted strongly to the audit’s findings. County Supervisor Lindsey Horvath called LAHSA’s financial mismanagement “a nightmare” and announced plans to hold a vote on pulling county funding from the agency in favor of direct county oversight.
Los Angeles Mayor Karen Bass acknowledged the systemic failures identified in the report, stating, “The broken system this audit identifies is what I’ve been fighting against since I took office. This audit validates our work to change what’s festered for decades. We still have work to do, but changes we’ve made helped turn around years of increases in homelessness to a decrease by 10%—the first one in years.”
Growing Calls for Reform
While Mayor Bass has expressed hesitation about severing ties with LAHSA entirely, some city council members are pushing for direct oversight of homelessness spending. Councilmember Monica Rodriguez, who has long raised concerns about LAHSA’s financial transparency, called the audit a “wake-up call” and renewed her push to shift funding away from the agency.
Councilmember Nithya Raman echoed the need for reform, advocating for a centralized oversight division within the Los Angeles Housing Department to ensure that homelessness programs are properly monitored. “No one within the city is actually charged with tracking how well these programs are working,” she said. “Are our service providers doing what they’re supposed to be doing? How best can we spend our dollars?”
Legal and Financial Implications
The audit’s findings could have legal repercussions as well. The L.A. Alliance for Human Rights has argued that the city’s financial mismanagement has exacerbated the homelessness crisis. A hearing on March 27 will address the audit findings and a request for potential consequences against the city for failing to meet its commitments in a 2022 legal settlement.
Judge Carter, who ordered the audit after city officials blocked the L.A. Controller from reviewing the mayor’s Inside Safe program, has suggested that existing funds could be used more efficiently to house more people.
“The city claims it can’t afford additional shelter beds, but this audit suggests the real issue is how the money is being spent,” Carter remarked in a recent hearing.
As the city council prepares to vote on the future of LAHSA’s funding, many questions remain about how L.A. will address these systemic failures. With billions of dollars at stake and homelessness remaining a critical issue, calls for greater accountability and oversight are only growing louder.
###
