Homeless programs funded by the city of Los Angeles are essentially a black hole when it comes to oversight and the tracking of outcomes, a court-ordered, independent audit has found.
The report, released on Thursday, was conducted by Alvarez & Marsal, a global consulting firm. It looked at four years of homeless services managed by the Los Angeles Homeless Services Authority (LAHSA) from June 1, 2020, through June 30, 2024.
A&M said it was stymied by information gaps and incomplete data that hindered its ability to gauge the results of approximately $2.3 billion in homeless spending over that time period.
“Such gaps in documentation complicated efforts to track expenditures comprehensively, highlighting the need for more accurate recordkeeping within LAHSA’s financial and performance oversight processes,” A&M said in its executive summary.
In many instances, auditors found that independent contractors operated under vague arrangements and haphazard bookkeeping, and the money they received couldn’t be properly accounted for.
In one example, A&M’s team found inconsistencies with the “exit rate” of homeless individuals into permanent housing during the 2023-24 fiscal year.
“A sample of sites reported a median permanent housing exit rate of approximately 22.0%, whereas 47.8% of exits resulted in a return to homelessness, exceeding the rate of exits to permanent housing,” the report stated.
Auditors also found that LAHSA frequently approved payments to contractors before verifying that services were provided.
Responding to the report, Councilwoman Monica Rodriguez labeled LAHSA a “modern-day Titanic.”
“The audit’s findings confirm what I’ve repeatedly warned about—billions have been wasted on homelessness without oversight, accountability, or results,” Rodriguez told KTLA on Friday. “For over a year, I’ve pushed legislation to end this failed arrangement, while my colleagues have stalled for more than a year, pouring taxpayer dollars into a system and programs that continue to fail.”
The L.A. Times obtained a statement from LAHSA blaming the “siloed and fragmented nature of our region’s homeless response” for the accountability issues.
The audit was ordered by U.S. District Judge David O. Carter and stemmed from a 2020 lawsuit filed by the L.A. Alliance for Human Rights. The Alliance, comprised of local business owners and residents, asserted that the city failed to protect public health and safety by allowing rampant homelessness.
The suit was settled in 2022, but the group has accused the city of not living up to the terms, which included providing more beds and housing.
On her first day in office in 2022, Mayor Karen Bass declared a state of emergency on homelessness and launched her hallmark Inside Safe program. Among its goals is to dramatically lower the cost of building affordable and temporary housing, get people off the streets and provide them with various services.
According to the program’s website, nearly 3,900 homeless individuals have “moved indoors” since the mayor took office, and 878 have found permanent housing. The latest point-in-time count identified more than 45,000 people living on the streets of L.A. in 2024.
Mayor Bass insists the audit’s findings validate her work.
“The broken system the audit identifies is what I’ve been fighting against since I took office,” Bass said. “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.”
The point-in-time count did, in fact, note a drop in homelessness in the city from 2023 to 2024, from 46,260 individuals to 45,252. Countywide, the numbers were largely unchanged at 75,000.
California Governor Gavin Newsom, who once threatened to withhold homeless funds from cities and counties that didn’t show progress, has also pushed for greater accountability.
“This (audit) reaffirms the state’s prior findings that local governments need to do a better job of tracking homelessness spending,” Tara Gallegos, a spokesperson for Newsom, told KTLA. “That’s why Governor Newsom has implemented new, strict accountability measures to increase accountability and ensure every dollar is spent effectively.”
Gallegos directed the public to visit accountability.ca.gov to track statewide spending on homelessness and affordable housing.
