On March 6th, the independent audit results revealed that the city of Los Angeles has been unable to track billions of dollars in expenditures for homeless services. The audit, commissioned by Federal District Judge David O. Carter and conducted by Alvarez Marsal Public Sector Services, found significant challenges in quantifying how the approximately $2.3 billion funds were utilized by Los Angeles officials in providing shelter, food, and services to the homeless population.
The report highlighted that due to incomplete and inaccurate record-keeping and data collection processes within Los Angeles’ homeless assistance program, it was difficult for A&M to fully quantify how the funds were being utilized. The repeated instances of missing information and lack of accurate and comprehensive data and documentation posed significant obstacles to the evaluation.
Established in 1993, the Los Angeles Homeless Services Authority (LAHSA) is responsible for managing and distributing funds for homeless services on behalf of the city and county of Los Angeles. However, the fragmented data between LAHSA, the city government, and the county government made it challenging to verify expenditures and align financial data with performance metrics. The audit revealed that LAHSA was unable to demonstrate if services were provided based on invoiced items.
Additionally, the audit identified that contracts between the city government, LAHSA, and service providers often contained broad and unclear terms, resulting in a lack of defined boundaries regarding the scope and types of services provided, leading to ambiguity.
The report emphasized the need for unified data standards and real-time monitoring to enable auditors to thoroughly assess the true effectiveness of the homeless assistance program and address concerns about improper resource allocation.
A&M recommended that Los Angeles consider appointing an independent financial manager to establish a robust framework for reviewing and approving invoices from service providers and LAHSA’s invoices or cash requests.
The auditors also suggested that the city government should require service providers to provide detailed itemized invoices outlining specific costs with clear supporting documentation to verify the delivery of services.
As of now, LAHSA has not responded to requests for comments.
According to the report, Los Angeles is facing a historic level of homelessness. Another report released by the Los Angeles County Department of Public Health on March 6th revealed that seven homeless individuals die every day in Los Angeles. The report noted that the homeless death rate is 4.5 times higher than the overall population death rate in Los Angeles County, with drug overdose being the leading cause of death.