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HOMELESS CRISIS - The recent blistering audit of the Los Angeles homeless problem was not only expected, but it was also anticipated, long before the examination was ordered by U.S. District Judge David O. Carter.
The facts have always been crystal clear. Without oversight and direction, homelessness not only turned bleak and unmanageable, but the program had fallen prey to the “Homeless Industrial Complex.”
Without delay the city must perform a forensic audit, in addition to the just released financial and performance assessment only audit, to find out the specific waste and abuse, and the possible fraud, all born out of the Homeless Industrial Complex and its manufactured revolving door, one in perpetual motion, which draws in money and returns little, if any, results.
We were stirred two years ago when Miguel Santana of the California Community Foundation told the Urban Land Institute, “We have created a system not for the homeless, but for the interests who benefit from that system.” It was an honest appraisal.
We knew that the antiquated and inefficient methods of data collection—and data not collected—and the poor referral processes significantly inhibited the efforts by the city to respond to the crisis with the urgency that it required.
When I was on the Board of the Los Angeles Department of Water and Power I had to resort to such a forensic audit regarding performance of an Owens Lake multimillion multiyear contract to discover that the department was defrauded over several years, although the subject contract had been audited before. LADWP sued and was able to recover $2.9 million of the ratepayers` money.
That CPA performed audit among other issues.
- Analyzed financial transactions: Reviewed invoices, payment records, and financial statements for irregularities.
- Identified patterns: Used data-mining techniques to look for patterns of behavior that could indicate fraud.
- Investigated counterparties: Looked into the other parties involved in the contract.
While overseeing the design and construction of homeless shelters for Mayor Eric Garcetti as part of the A Bridge Home program, an embarrassing reality emerged: the tail truly wagged the dog.
Providers supplying services arbitrarily added unreasonable requirements and demands that resulted in skyrocketing construction costs, ensuing in housing delays, while seven homeless die every day in the streets of Los Angeles. These requirements were stricter than those of the Building and Safety Department, or the Fire Department. Safety, of course, always demands a high priority, overplaying it and adding exorbitant costs is unacceptable.
Homeless services are provided by the Los Angeles Homeless Services Authority, a broken system which produces fabricated data, fails to meet goals, and is so troublesome it becomes vulnerable to waste and fraud.
Immediately, we need to apply forensic methods and techniques to gain a true picture of this protracted challenge, and we must slam the door shut on the Homeless Industrial Complex.
(Nick Patsaouras is a transportation and civic leader who served on the boards of the Southern California Rapid Transit District and the Los Angeles County Metropolitan Transportation Authority, advocating for bus transit. He has also held key oversight roles in Los Angeles city projects, as the former president of the Department of Water and Power board, UCLA/Harbor Medical Center expansion, and the LAPD headquarters construction.)
