The Los Angeles Homeless Services Authority is under-staffed to handle Measure H funding and historically routinely failed to pay service providers on a timely basis, according to a review by the Los Angeles County Auditor-Controller released Tuesday.
The fiscal operations review was requested by Los Angeles County Chief Executive Officer Sachi Hamai because LAHSA is expected to increase operations from $94 million in fiscal year 2016-17 to $234 million in 2017-18 due to Measure H funding, according to the report.
More than $5 million of the agency’s accounts payables were between one and 120 days past due as of Oct. 25, the auditors found. About one-third of that total was more than 30 days beyond the due date.
The agency has since put a new process in place that resulted in 97 percent of payables being current as of January, according to a letter in response to Auditor-Controller John Naimo from LAHSA Executive Director Peter Lynn. Lynn told Naimo that paying providers on time is one of the agency’s highest priorities.
However, some of the auditors’ other findings seem to indicate that LAHSA is struggling to catch up with a growth spurt in revenues as a result of new Measure H funding to deal with the homelessness crisis.
Lynn said LAHSA is working to transform the way it does business, in part through hiring independent management and business processes consultants and buying a new contract management system.
However, auditors noted insufficient staffing and high turnover in the agency’s finance department and called for more management oversight of those employees to make sure they clearly understand their responsibilities.
In other cases, the reviewers called for fewer layers of bureaucracy to speed payments and operations efficiency.
Another recommendation was that the agency seek a line of credit to access adequate cash flow for its service providers while awaiting receipt of its own revenues. LAHSA is a pass-through agency that does not generate its own revenue, but says it has solved that problem and now has adequate cash on hand.
LAHSA officials say they plan to make 13 new finance hires and are engaged in a national search for a new chief financial officer.
Both LAHSA and the audit letter referenced “significant improvements” since the time of the review, which was based on sampling during some portion of the 2017-18 fiscal year.
The report was not on the agenda or discussed during the Board of Supervisors’ meeting and no action was taken.
Program services under Measure H include providing shelter, assistance with housing and social services to homeless families and individuals.