LOS ANGELES—A federal judge said Thursday he does not trust figures the city of Los Angeles is receiving from homeless service providers and has “grave doubts” about efforts to monitor the programs.
Carter described the problem that has bedeviled city leaders dealing with homeless issues for at least 18 years as “no accountability. This is old news.”
During the hourslong hearing in downtown Los Angeles, the judge presented a history of attempts to audit the city’s homeless services since 2007, with most revealing poor oversight, inaccurate accounting, unclear metrics, and untrustworthy results. At least two studies pointed to the Los Angeles Homeless Service Authority—a city-county joint agency—as a source of problems.
In the most recent effort, a court-ordered audit by the firm Alvarez & Marsal, $2.3 billion of funding, including appropriations, commitments, or spending related to three city programs—including Mayor Karen Bass’ much-touted Inside Safe program—were analyzed.
A&M’s scathing assessment released earlier this month by Carter revealed familiar results—a disjointed and poorly managed system resulting in the auditors’ inability to track substantial funds allocated to various services.
“There was a lot of stonewalling going on,” Carter observed. “If you don’t have the documentation, just say so.”
One possible solution, the judge determined, would be a centralized system, rather than multiple separate entities trying to address homelessness. The current system “is not working,” he said, adding that a “unified homeless strategy” with rigorous oversight might be a workable solution.
Bass, who rushed to the hearing after Carter called her assistant on the carpet when the mayor was not present at the start of the morning—despite the judge’s personal recommendation that she attend—told the court she has long known the system was “broken.”
Bass said there was much in the report she agreed with. However, she said, she was sure of one thing above all: “I believe we can stop people from dying on our streets.”
Carter had requested—but not ordered—that Bass, Council President Marqueece Harris-Dawson, City Controller Kenneth Mejia, and Board of Supervisors Chair Lindsey Horvath show up at the hearing Thursday morning. The judge was especially irked that LAHSA chief executive Va Lecia Adams Kellum was a no-show.
Told that Kellum was in Boston, Carter responded, “That’s not acceptable to me.”
The judge said the hearing on Thursday should “take precedence. This is important. This is not business as usual.”
Costing $2.8 million, the A&M report found information gaps, along with a lack of accurate and complete data and documentation, posed “significant obstacles” to auditors. Further, insufficient financial accountability led to an inability to trace substantial funds allocated to the city’s programs, investigators said.
Fragmented data systems across LAHSA, the city, and Los Angeles County, along with inconsistent reporting formats, “made it challenging to verify spending and the number of beds or units reported by the city and LAHSA, track participant outcomes, and align financial data with performance metrics,” A&M said.
“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 consulting firm determined.
In other words, according to court papers filed by the county, “LAHSA does not know who it is paying and for what. The city doesn’t know how much it is paying, and for what. The system is disjointed and mismanaged, with layers of redundancies and bureaucracy built on top of itself. There is nearly zero financial oversight or accountability by the city and county, of LAHSA, or by LAHSA of the service providers with whom it contracts.”
A&M stated that due to the manner in which the city recorded expenditures for homelessness assistance services, auditors were “unable to completely quantify the total amount spent by the city for each component of the city programs using the data provided.”
In addition, the firm said, the city and LAHSA “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.”
Because 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, according to the report.
The judge said he would hold another hearing next month to continue discussions.
Carter’s decision last year to order the assessment 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 without proper accounting.
Paul Webster, executive director of the L.A. Alliance, said the report confirmed what the plaintiffs have been alleging for years.
“We knew this was a fractured, ineffective system, [rife with] financial mismanagement,” he said. “We just didn’t know how deep it went, and how difficult it was for A&M to get basic accountability information.
“A&M used words like ‘difficult’ and ‘complex’ and ‘challenging’—not referring to getting people off the streets—but to emphasize how difficult it was for them to get basic information [from the city about expenditures].”
Webster said that because the systems used by the city, county, and LAHSA are so “fractured and ineffective,” there is little consistency in terms of data tracking and accountability.
“Our conclusion is this audit really validates what we’ve been saying, and it calls for a complete overhaul of the homelessness [response] system,” he said.
