Court-Ordered Report Finds City Funds Mismanaged, Services Lacking Accountability
A court-ordered independent audit has revealed that homeless programs funded by the City of Los Angeles operate with minimal oversight, making it nearly impossible to track spending and outcomes effectively.
The report, released Thursday by global consulting firm Alvarez & Marsal, analyzed four years of homeless services managed by the Los Angeles Homeless Services Authority (LAHSA) from June 1, 2020, through June 30, 2024.
U.S. District Judge David O. Carter mandated the audit as part of a 2020 lawsuit filed by the L.A. Alliance for Human Rights, a coalition of local business owners and residents who alleged the city failed to address homelessness and protect public health and safety.
The audit found that LAHSA’s contracts were vague, leading to inconsistencies in services and costs. Auditors reported that insufficient financial accountability prevented officials from tracing large sums allocated to city-funded homeless programs.
“The lack of uniform data standards and real-time oversight increased the risk of resource misallocation and limited the ability to assess the true impact of homelessness assistance services,” the report stated.
The findings echo a separate report from the Los Angeles County Auditor-Controller in November, which identified failures to track millions of dollars in cash advances to contractors, as well as delays in paying providers even when funds were available. You can read that report here. In the report it was noted, “There are a woefully inadequate number of people moving from interim to permanent housing: Less than 20% of people in interim housing secured permanent housing, and more than 50% of people exiting interim housing returned to homelessness or unknown destinations.”
“There are also major concerns about long-term stability for people who have been placed in permanent housing. Furthermore, over the 5-year scope covered in this audit, an average of 1 in 4 interim beds – which are the gateway to permanent housing – went unused costing taxpayers an estimated $218 million.”
Mayor Bass’s office said via a press statement, “The broken system the audit identifies is what I’ve been fighting against since I took office. This audit validates our work to change what’s festered for decades. 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.”
LAHSA has not responded.
Elizabeth Mitchell, attorney for L.A. Alliance for Human Rights, stated, “These findings are not just troubling — they are deadly,” Mitchell said. “The failure of financial integrity, programmatic oversight, and total dysfunction of the system has resulted in devastation on the streets, impacting both housed and unhoused.
County Supervisor Lindsey Horvath described LAHSA’s issues as “a nightmare” and announced plans to introduce a measure to shift funding away from the agency and have the county directly oversee homeless programs.“We cannot accept this dysfunction any longer,” Horvath said.
Elizabeth Mitchell, an attorney representing the L.A. Alliance for Human Rights, called the findings “not just troubling — they are deadly.”
“The failure of financial integrity, programmatic oversight, and total dysfunction of the system has resulted in devastation on the streets, impacting both housed and unhoused,” Mitchell said.
