Review of Los Angeles Homeless Services Authority Faults Fiscal Management
Last month, Los Angeles County Supervisor Mark Ridley-Thomas called for an evaluation of whether the Los Angeles Homeless Services Authority (LAHSA) is capable of managing the large influx of funds generated by Measure H. This comes after a county auditor’s critical review of the agency’s management. The fiscal review was conducted by the county’s auditor-controller and it revealed that the LAHSA had many faults that include things such as its finance operation being understaffed, a lack of management oversight, and paying its bills too slowly. Supervisor Ridley-Thomas filed a motion asking for a report from top county officials on “relevant structural adjustments necessary … to improve the outcomes and accountability of Measure H funds.” In an interview with the Los Angeles Times last month, Supervisor Ridley-Thomas stated,
It would be prudent for the county to assess the capacity of LAHSA to manage the increased funding levels resulting from Measure H and to take the steps necessary to strengthen accountability of these funds. The auditor-controller is saying there is reason for substantial concerns, and that would be a huge problem if not corrected sooner rather than later. The question then becomes whether or not LAHSA is capable of correcting the issues.
Measure H is the quarter-cent sales tax approved by voters last year that is expected to raise about $355 million annually to combat homelessness. The LAHSA was formed in the 1990s to manage homelessness programs for the city and county, and it currently administers about $100 million in funds. The LAHSA is in charge of eight of the 21 county homeless strategies funded by Measure H. The LAHSA is expected to see an increase of $140 million to its operations thanks to Measure H.
According to the Los Angeles Times, the review conducted by county’s auditor-controller validated complaints from homeless services providers that the LAHSA’s slow invoicing process forces them to pay program expenses with their own resources months before being reimbursed. Apparently, the LAHSA didn’t complete contracts in time, had inadequate cash flow to pay subcontractors on time and sometimes was late submitting reimbursement claims to its funding sources. The review also revealed that for the period covered, 72% of the agency’s accounts payable were one to 120 days overdue. The LAHSA acknowledged the issues but said it had already fixed many of them. We will have to wait and see if the LAHSA was actually able to fix its issues and is able to handle the larger influx of funds from Measure H.