Waste of the Day: “Insufficient Accountability” in L.A.’s $2.3 Billion Homelessness Spend
Topline: An independent auditing agency found it impossible to track the $2.3 billion the county and city of Los Angeles spent on homeless services last year, according to a report filed with a federal district court on March 6.
Key facts: Auditors from Alvarez & Marsal Public Sector Services wrote that the Los Angeles Homeless Services Authority’s spending records are littered with “information gaps,” a “lack of accurate and complete data” and “insufficient financial accountability.”
As a result, auditors were unable to figure out what the $2.3 billion had been spent on or if it had any positive impact.
The Homeless Services Authority signs contracts with outside vendors to provide services, but the agency was unable to identify how many contracts had been signed or which were still in effect. The department told auditors that 139 contracts had been signed, but the auditors were eventually able to find 215. The auditing company “never received a definitive list of the relevant service provider contracts.”
For contracts that were tracked, there was little-to-no effort to “verify the quality, legitimacy, or reasonableness of expenses” before paying city money, auditors wrote.
The poor accounting left auditors unable to evaluate the success of Los Angeles’ homelessness services. In theory, the expenditure of taxpayer money should have led to more support for the homeless population, but auditors said it was impossible for them to verify whether that was the case.
Los Angeles County supervisors will vote April 1 and decide whether to remove fund from the Homeless Services Authority so the county can oversee it directly.
Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Supporting quote: “The broken system the audit identifies is what I've been fighting against since I took office,” Mayor Karen Bass’ office told CBS News in a statement. “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."
Critical quote: "It's heartbreaking," said Elizabeth Mitchell, an attorney for LA Alliance for Human Rights, which advocated for the audit to be conducted. "It's atrocious. It's immoral. It's unjustified. But, what it is not, is surprising."
Background: Los Angeles’ homeless spending issues are just one part of an issue that has plagued the state for years.
An audit released last year found that the California Interagency Council on Homelessness was not evaluating the effectiveness of its programs. The agency had spent $24 billion in five years without tracking if the spending accomplished anything.
The spending certainly needed a thorough evaluation. One program in San Francisco used $5 million to treat alcoholism by handing out free beer and vodka to homeless addicts.
Summary: Los Angeles is learning that simply throwing money at a problem does not lead to a solution. Local programs need oversight and accountability, not just billions of funding.
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