Newsom can not account for $24 billion spent on the homeless. LA Marxist Mayor did not spend $550 million to solve the homeless crisis. That may be a good thing. We have an audit that shows the city can not account for more than $50 million spent on the “homeless”.
“Most of the audit’s findings appear to violate basic accounting rules, if not simple common sense.
For example: Over $50 million in annual Measure H-funded cash advances were doled out to various subrecipients beginning in 2017, without formal agreements on how these would be repaid.
As is likely often the case when millions of dollars are handed out without a binding contract, most of the money is still outstanding. As of July of this year, LAHSA had recouped just $2.5 million – 5% — of the advances they distributed between 2017-2024.
This is more proof as to why you should NEVER vote for a bond or a tax increase. When you do, you should know the money will be misspent, abused.
Audit Reveals LAHSA’s Financial Mismanagement: Over $50M in Taxpayer Funds Unaccounted For
Angela McGregor, Westside Current, 11/26/24 https://www.westsidecurrent.com/news/audit-reveals-lahsa-s-financial-mismanagement-over-50m-in-taxpayer-funds-unaccounted-for/article_0c69ab7c-ab8e-11ef-853a-ffdb2db76109.html?utm_source=westsidecurrent.com&utm_campaign=%2Fnewsletter%2Foptimize%2Fdaily-headlines%2F%3F-dc%3D1733239809&utm_medium=email&utm_content=headline
LOS ANGELES – The Los Angeles County’s Auditor-Controller released “a review of LAHSA’s Finance, Contracts, Risk Management, and Grants Management and Compliance units, as requested by the Board of Supervisors on February 27, 2024.”
The results of that review add to the increasing evidence of LAHSA’s fiscal incompetence. Simply put, LAHSA – in addition to being incapable of providing reliable data on the efficacy of the city’s efforts to combat homelessness — is not in compliance with accepted financial management standards.
County Supervisor Lindsay Horvath, a staunch supporter of LAHSA in the past, told LAist that this is clear evidence that “the structure we have for service delivery is not working.”
Most of the audit’s findings appear to violate basic accounting rules, if not simple common sense.
For example: Over $50 million in annual Measure H-funded cash advances were doled out to various subrecipients beginning in 2017, without formal agreements on how these would be repaid.
As is likely often the case when millions of dollars are handed out without a binding contract, most of the money is still outstanding. As of July of this year, LAHSA had recouped just $2.5 million – 5% — of the advances they distributed between 2017-2024.
LAHSA has responded that they are “working on” recouping the money and requested this finding be “removed” because having an actual plan and/or contract for repayment of more than $50 million in taxpayer dollars isn’t specifically spelled out in their contract with the County. Seven years after the money was initially handed out, LAHSA has now agreed to “work with sub-recipients to establish agreements with repayment terms.”
On Thursday, November 21, Judge David O. Carter, who is presiding over the L.A. Alliance Lawsuit Settlement, which is conducting its audit of LAHSA, demanded that LAHSA provide the names of these “gifted providers” to the court.
On that list is the St. Joseph’s Center in Venice, which has paid back just $120,000 of the $2.8 million LAHSA has gifted them as of 2024. Dr. Valecia Adams Kellum, the current CEO of LAHSA, was St. Joseph’s President and CEO during the years these advances were made. When Dr. Adams Kellum was made head of LAHSA in January 2023, County Supervisor Janice Hahn described her appointment as “pushing the reset button in how we are addressing homelessness.” Dr. Adams Kellum’s compensation — $430,000 per year – is more than $200,000 per year more than her predecessor was paid.
There were instances where LAHSA used government funds specifically earmarked for one purpose to pay for another, a violation of government accounting standards so egregious that Current contributor (and former government auditor) Tim Campbell called the practice “borderline illegal.”
LAHSA responded – despite the audit listing two specific examples – that “available funds are only used for their intended purposes” and indicated that they had implemented corrective action in July. However, the audit states that “they did not provide any documentation to support that they took corrective action.”
A review of 13 randomly selected payments to subrecipients between July 2023 and May 2024 found that five of them were late and that LAHSA didn’t even bother to invoice the County for reimbursement for almost two months after one was received.
In other words, while LAHSA hands out money with no strings attached to some subrecipients, others wait months for payment despite filing actual invoices.
This finding echoes a 2018 county audit, which also found that “LAHSA did not execute contracts with their sub-recipients timely.” LAHSA responded that they were initiating a new system that would “streamline” and “automate” the contract workflow process, which would be implemented in 2019.
According to the audit, that system currently contains five different lists of contracts, with totals varying from 676 to 1078. And none of these lists “accounted for all of the active contracts LAHSA reported having,” according to the audit.
In a “press availability” ahead of the release of the audit, Dr. Adams Kellum insisted that most of these shortcomings (which she termed “pain points”) predated her arrival at the agency in 2023. But the other LAHSA official on that call, Chief Financial Officer Janine Trejo, has been with LAHSA since 2017, according to publicly available records showing that she has received a promotion every year since 2018, when she was a “Supervisor of Budgets.”
Unlike Dr. Adams Kellum (whose doctorate from Stanford is in Psychology), Trejo’s resume is not available on Linkedin, nor does her listing on LAHSA’s website include a CPA or MBA credential or a mention of prior government experience.
We reached out to LAHSA to ask what her qualifications are to manage the finances of a nearly $1 billion government entity (and whether said entity is required to utilize government accounting standards and practices) and are waiting for a response.
Measure A, passed by Los Angeles County voters this month, is a .5% sales tax estimated to collect as much as $1 billion per year to be spent on “Comprehensive Homelessness Services.”
The measure requires an annual report by the County Auditor of all receipts and expenditures, which goes to both the County Board of Supervisors and LAHSA for inspection. Still, it doesn’t specify what should be done in the event the auditor’s report uncovers gross mismanagement of these funds.
he Board of Supervisors will vote on a new motion introduced by Supervisors Horvath and Barger today, November 26, which would create a new County Department of Homelessness to which Measure A revenue would be exclusively directed that would “integrate funding, programs, oversight, and implementation and administration of the complex network of services dedicated to addressing homelessness” – in essence, starving LAHSA of most of its funding and “streamlining” LAHSA to focus on its role as a care provider, manager of the annual homelessness count, and “other emergency response actions.”
The motion cited the issues in the latest audit, pointing out that “LAHSA’s ability to correct these significant issues is a concern, as these issues have persisted for years, even after prior reviews.”
But while this new motion and county entity appear to constitute at least a tacit acknowledgment of LAHSA’s long history of mismanagement and a corporate culture that doesn’t appear to value professionalism (let alone common, accepted standards of fund management), they don’t spell the end of LAHSA. The motion merely asks for a report to determine the feasibility of this restructuring, which is based on the findings of a 2021 “Blue Ribbon Commission on Homelessness Report,” which, until now, appears to have been largely ignored.
Rather than replacing the LAHSA personnel responsible for this egregious mismanagement, the motion states that this new department will be filled by “an open recruitment in which consideration is limited to employees currently employed by LAHSA.”
On November 22, City Councilmember Monica Rodriguez introduced two motions inspired by the audit’s findings, according to LAist. The first instructed the City’s Chief Legislative Officer to report back on ways the city could bypass LAHSA altogether and contract directly with service providers. The second called for a report on Measure A revenue, specifically “the provisions of the recently approved ballot measure that would support the city’s housing and homelessness priorities.” As with the County’s motion, these new reports follow years of similar reports that have revealed LAHSA’s egregious shortcomings and have, apparently, been ignored.
