Comments
NICK KNOWS - If Los Angeles had a Tower of Babel, it would be the collapsed structure chaotically formulated to respond to homelessness. Created was a confusing system where no one had full authority, and where management broke down at every interface. Wobbly, and without true leadership, it came down hard and fast.
Responsibility was shared among the City of Los Angeles, Los Angeles County, the Los Angeles Homeless Services Authority (LAHSA), and various service providers. But chaos ruled. Communications crumbled because each group used different terminology: the City focused on shelters, encampments, and public safety; the County dealt with mental health, social services, and clinical needs; LAHSA emphasized real time data collection and reporting, coordinated entry, and provider networks; while other providers spoke in terms of caseloads, trauma, and funding cycles.
This fragmentation significantly hindered the ability to deliver consistent care and enforce standards effectively. Each entity maintained separate databases that could not fully interoperate—the modern equivalent of speaking different languages.
Worse yet, financial controls failed. The City and LAHSA paid providers regardless of performance, including billing for unverified staff time and meals that were never served. In fact, providers were paid even when services were not delivered. Consequently, no one really knows the cost of each segment of the program, what outcomes were achieved, and which, if any, providers were effective.
About one year ago I called in this space for the city to perform a forensic audit to find out specific waste and abuse, and the alleged fraud that may exist, all born out of the homeless industrial complex and its manufactured revolving door, one in perpetual motion, which draws in money and returns little, if any, results.
A forensic audit, I knew from my days as president of the Los Angeles Department of Water and Power, could work. For me, it resulted in the recovery of $2.9 million of taxpayer money, although the city controller and outside audit firms had already performed audits. I knew that standard audits checked compliance, but a forensic one uncovers funds that may have been misallocated, misrepresented, or fraudulently billed.
Finally, on February 28, Supervisor Lindsey P. Horvath called for a forensic following a LAHSA Finance Committee meeting that she says raised serious concerns about the agency's economic management.
Among the issue raised by Horvath included LAHSA lack of staff and expertise to pay its bills; has received advanced county funding yet cannot pay service providers for work completed months ago; has refused 24 qualified county staff offered at no cost to assist with operations; and is providing balance sheets to commissioners that do not reconcile or reflect real-time financial data.
"If LAHSA were a publicly traded company, regulators would shut them down," Horvath said in a statement.
Plainly stated, the system is undergoing major changes as entities realign after years of issues with performance, oversight, and payments. The three groups are now misaligned with their roles, funding, and authority, influencing the regional response. Los Angeles’ homelessness system is moving from a fragmented tri-agency approach to a City–County split: LAHSA is downsizing, the County is creating a new department, and the City is determining its next steps. Providers await payment of millions in invoices.
The County has already taken decisive action: it withdrew more than $300 million in annual funding from LAHSA last year and is shifting those dollars to its new County Department of Homeless Services & Housing.
The City is openly debating whether to pull some $300 million annual contribution out of LAHSA and bring homelessness contracts inhouse, or to keep funds at LAHSA but increase oversight. Another option is to move the funds to new City-operated homelessness department or transfer the funds to the new County homelessness department. Mayor Bass has urged the Council not to withdraw funding abruptly, warning that a rushed transition could worsen street conditions.
LAHSA is facing a severe operational crisis. It owes $53–69 million in unpaid invoices to service providers with some forty percent of invoices more than two months old, forcing providers to take on debt to keep shelter doors open.
As expected, frustration in the political front is mounting with Horvath saying that Mayor Karen Bass “is living in the LAHSA twilight zone.”
City Councilmember Monica Rodriguez delivered her own blunt message at the meeting of the Housing and Homelessness Committee: “The structure is fractured, the chain of command is unclear, and the public is being asked to keep paying into a system that still can’t prove who is actually in charge. Homelessness is not a money issue but a leadership failure".
Where, then, do we go from here? I expect the forensic audit will produce high-value findings. First, it will present a clear tracing of money, results that are actionable because it exposes misdeeds, bottlenecks, and failures that no one can deny. Secondly, it will identify clearly the true structural failures, and these findings may well become the backbone of structural reform. And finally, it can convert complaints from providers into documented, time‑stamped evidence that forces action.
With the system cracked open, we can redesign it in broad daylight. First, create one visible command structure. The money and contracts should be housed with that authority. Currently, money flows through entities that do not fully control operations.
A reliable homelessness system is essential for every city, impacting human dignity, public order, economic stability, and government legitimacy. It is not charity, but a fundamental infrastructure, particularly for a global city like Los Angeles.
(Nick Patsaouras is an electrical engineer, civic leader, and a longtime public advocate. He ran for Mayor in 1993 with a focus on rebuilding L.A. through transportation after the 1992 civil unrest. He has served on major public boards, including the Los Angeles Department of Water and Power, Metro, and the Board of Zoning Appeals, helping guide infrastructure and planning policy in Los Angeles. He is the author of the book "The Making of Modern Los Angeles.")
