Los Angeles’ homelessness programs are hampered by poor oversight resulting in an inability to track substantial funds allocated to the city’s assistance services, according to the draft of a court-ordered audit issued Thursday.
Auditors with the firm Alvarez & Marsal identified $2.3 billion of funding, including appropriations, commitments, or spending related to city programs, according to the assessment released by U.S. District Judge David Carter.
“Due to the manner in which the city recorded expenditures for homelessness assistance services, A&M was unable to completely quantify the total amount spent by the city for each component of the city programs using the data provided,” the preliminary assessment stated. “Multiple funding sources and allocations across various city departments resulted in fragmented accounting records.”
Further, auditors said, the city and the Los Angeles Homeless Services Authority “did not initially provide all requested financial data, prompting A&M to make multiple efforts to identify, trace and reconcile relevant data as it was produced to A&M.”
A&M said it relied on the financial data produced by the city and LAHSA, as A&M did not have direct access to the financial information systems used by the city. As a result, since the city and LAHSA were unable to identify and calculate relevant expenses for all city programs, auditors were unable to quantify the total amount of money spent to establish beds and provide associated homeless supportive services, the report stated.
In addition, limited financial oversight and performance monitoring of homeless programs resulted in oversight that frequently missed verifying the quality, legitimacy or reasonableness of expenses, A&M determined.
Carter set a hearing for March 27 in Los Angeles federal court to discuss the assessment.
“The invoicing process between the city and LAHSA, or the `cash request’ process, was a time-consuming, manual process at risk of human error, exposing the city and LAHSA to potential accounting inaccuracies and complicating precise reconciliation of contract expenditures,” the report said.
Also, contracts between the city, LAHSA and service providers “frequently contained broad terms without clear definitions, which created ambiguity about the scope and type of service delivered,” A&M found.
L.A. City Councilwoman Nithya Raman, chair of the City Council’s Housing and Homelessness Committee, said the preliminary report underlined her own findings that more oversight of the city’s homelessness assistance programs was needed.
“The findings of this audit reinforce the need for real oversight and performance management of our city’s homelessness response,” she said Thursday. “This is exactly what I have proposed in my motion to create a division in the Los Angeles Housing Department to centralize performance management and oversight of the city’s spending on homelessness programs. This work must happen now: This is about more than just metrics — this is about saving people’s lives by bringing them indoors into safety.”
The councilmember has introduced a motion calling for more oversight of the city’s homelessness response.
Raman’s office pointed out that despite the city investing over $1 billion annually into its regional homelessness response, “there is currently no staff or department within the city government tasked with monitoring the outcomes of this investment, and very little data to hold the system accountable.”
The homelessness assistance programs to be scrutinized by A&M include, but are not limited to, programs used by L.A. Mayor Karen Bass in her 2024-2025 draft budget summary, which includes a $1.3 billion commitment to end homelessness, court papers show. The audit was to look at three specific areas, Carter said, including Bass’ Inside Safe program, designed to move unhoused residents from street encampments indoors, and two other agreements.
Carter’s decision to hire A&M came about as part of a lawsuit brought in March 2020 by the L.A. Alliance for Human Rights, a group of downtown business owners, who sued the city and county of Los Angeles to compel elected officials to rapidly address the homelessness crisis, especially in light of the COVID-19 pandemic.
The plaintiffs demanded the immediate creation of shelter and housing to get people off the streets, services and treatment to keep the unhoused in shelter, and regulation of public spaces to make streets, sidewalks and parks safe and clean.
Carter has expressed frustration regarding the accounting of public funds to battle the homelessness crisis, and has repeatedly mentioned from the bench that $600 million was distributed to city programs in years past — before Bass was elected mayor in 2022 — without proper accounting.
Poor oversight is right there’s not a damn person in the oversight committee that’s ever had a license or an education to do the job that they’re doing in the oversight committee then you have an oversight to make for the law enforcement there’s never been one person to graduate from the academy in 250 years but still alive today. So that means there’s 250 years of fucking complete fucking morons out there that ain’t got no education at all in law enforcement but they’ve receive a $8 billion dollar paycheck after 40 years to receive $150 million a year for retirement at what point do you see $20 in the near future for you to get paid. And that requires an education at high school for you to even get a job in the world today but at law enforcement it’s not a requirement! It’s not a requirement to have a driver’s license or an identification approved that you have a concealed weapons permit! It’s never been a requirement to have an education in law enforcement it’s just a requirement to sign up on the book for a futuristic classroom sometime within 40 years. Then overall you know I mean there’s all sorts of problems nobody’s being checked out but how everybody else is having all the problems because they can’t make no money in this world but you got to pay your corruption at City Hall 15 figures a year and you can’t make 20 bucks an hour just doesn’t seem right that you put God through all the bullshit because it’s Medusa curse that cost you the problem