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iAUDIT! - Writing from personal experience in government, sometimes the most consequential issues are veiled in mundane reports and memos. The day-to-day operations of a local government agency are generally pretty mundane, and the language is couched in carefully measured bureaucratic lingo. This isn’t necessarily bad or conspiratorial. All professions have their unique jargon, and government is no different. In addition, local governments are subject to a dizzying array of state and federal regulations, so when a manager prepares a report, he or she must ensure it contains language that meets external requirements. These factors mean that many documents are long and full of dense prose. While they may meet technical requirements, reports may be hard for the general public to understand. Occasionally, managers may try to hide controversial or negative information behind an otherwise routine forest of words.
A good example of important information being masked by bureaucratic language is a recent report from the City of LA’s Chief Legislative Analyst on how the city contracts with LAHSA. The report is a review of how the City contracts with LAHSA, or more accurately what it doesn’t do. The City has no overarching general agreement with LAHSA. Instead, it has eight master contracts covering various program groups like interim housing and street outreach. Within those eight contracts are numerous sub-agreements funding specific programs encompassing 182 providers (p. 2). Each contract is unique, and to change one element of a contract, the entire agreement must be modified and resubmitted to the City Council for approval. For example, if the number of beds at one shelter changes, the contract for the entire shelter system has to be modified and resubmitted for approval. Also, since payments are made at the master contract level, if there is a question about one part of a bill, the entire payment can be delayed. Needless to say, this makes contract management unnecessarily complex and can delay payments. Late payments are especially problematic because LAHSA has its own serious issues paying its vendors on time.
Some key points mentioned in the report include:
- On page 3, the CLA’s report states, “As a result, it is difficult to determine under the current funding agreements how much City funding is spent on IH; determining funding for individual interim housing sites is less clear”. This is almost a word-for-word quote from the report by audit firm Alvarez & Marsal (A&M) that stated the City doesn’t know what its spending on homelessness.
- Building on the quote above, the City budgets by fund instead of by program, so it’s very difficult to tell how much the city is spending on any given intervention. It also makes it hard for the city to track the costs of programs with mixed funding because there is no single budget showing all funding sources for a given program.
- The complex funding and contract structure requires even trivial issues to be brought to Council for approval. For example, on pp. 3-4, the report states the CAO recommended 46 changes to the City/LAHSA contract in its latest Council update, one of which included a transfer of one cent in the Health and Wellness Program for women experiencing homelessness.
- Because there is no central contract authority, contract management is siloed and inconsistent, (page 5). Besides being inefficient on the city’s side, it makes it hard for LAHSA’s contract liaisons to work with the city because each city department may have different requirements and management approaches.
After discussing the problems with city’s contractual relationship with LAHSA, the CLA made a series of recommendations:
Unsurprisingly, the CLA’s first recommendation was to create a master Memorandum of Agreement (MOA) for all LAHSA services. The City pays LAHSA hundreds of millions every year, yet it has never had an overarching written agreement for services or performance expectations. The CLA recommended creating a general MOA/master agreement that covers the standard terms and conditions for all the other contracts and allows for changes at the program level, so each small adjustment doesn’t have to be brought back to the Council for approval. The CLA also recommended creating a shared contract database so the city and LAHSA work from common data.
The recommendations section also includes a discussion of provider performance. If I understand the report correctly, sometime between the County’s November 2024 audit and the release of A&M’s report in March 2025, LAHSA claims it implemented two proactive programs called “Active Contracts Management” and “Active Systems Management” (pages I-1 - I-2). These programs are meant to address LAHSA’s poor contract and financial management practices. Among the programs’ provisions are new performance monitoring activities and the creation of performance improvement plans for under-performing providers. LAHSA told the CLA’s office these new programs address the concerns raised by the County and A&M. Oddly enough, they didn’t stop LAHSA from paying Urban Alchemy for safe camping sites it wasn’t providing, nor has it helped the Authority dig itself out from under the pile of late payment to providers.
If you read the CLA’s report in the context of the November 2024 L.A. County audit, A&M’s report and other items, you can see how it’s just the latest in 30 years of mismanagement by the City and LAHSA. Many of the problems in this report are the same mentioned years ago, and the excuses are always the same: short staffing, lack of resources, etc. Master agreements are very common for long-term contractual relationships where the basic parameters don’t change much; its stunning the City and LAHSA never had one. Buit that’s one reason, as federal Judge Davis O. Carter said, that its so easy for the City and LAHSA to point fingers at each other--you can’t hold an agency accountable for an agreement that doesn’t exist.
Writing as a performance auditor, I think the problem is fairly obvious. It is a failure of leadership. Competent leaders may sometimes accidentally hire incompetent managers, but the managers don’t last long. Incompetent leaders, on the other hand, rarely hire competent managers because they’re threatened by them. So, someone like former LASHA CEO Dr. Va Lecia Adams Kellum will promote an inexperienced supervisor Janine Trejo to CFO even though she can’t meet a federal audit deadline. Change the leadership and the structure and then you’ll see improvements.
It’s also notable that this report was written by the Chief Legislative Analyst’s Office rather than by City Controller Kenneth Meija. It reads very much like a performance audit in that it identifies how things should work and compares it to reality and then makes recommendations to correct the problem. One must wonder why Mejia hasn’t addressed this issue after more than three years in office.
(Tim Campbell is a longtime Westchester resident and veteran public servant who spent his career managing a municipal performance audit program. Drawing on decades of experience in government accountability, he brings a results-driven approach to civic oversight. In his iAUDIT! column for CityWatchLA, Campbell emphasizes outcomes over bureaucratic process, offering readers clear-eyed analyses of how local programs perform—and where they fall short. His work advocates for greater transparency, efficiency, and effectiveness in Los Angeles government.)
