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iAUDIT! - Over the past few weeks, there has been a lot of talk, and even some action, on reforming homelessness interventions in Los Angeles. On March 25, the L.A. City Council voted to explore direct service provision, transferring money and services from LAHSA to the City. On April 1, the Board of Supervisors approved the process of withdrawing most of its LAHSA funding and creating a new County department to manage County homelessness programs. These actions took place after an independent auditor issued a damning court-ordered assessment of the City’s and LAHSA’s homelessness programs. That report was preceded by a November 2024 County audit exposing LAHSA’s history of financial mismanagement. At a lengthy and often contentious hearing about the independent review from the audit firm Alvarez & Marsal (A&M), federal judge Davod O. Carter called out the City and LAHSA for the multiplicity of their failures to effectively address the homelessness crisis. During that hearing, Judge Carter blasted LAHSA and City leaders for years of inaction and obfuscation.
LAHSA has been the target of most of the negative news, and deservedly so. As the A&M and County audits showed, its financial systems are deeply flawed and cumbersome, and effective contract management is virtually unknown. A&M noted providers are allowed to interpret contract requirements pretty much as they please, with little oversight from LAHSA’s contract managers. Instead of holding providers accountable for real outcomes, LAHSA pays for whatever its billed. As Judge Carter noted, LASHA’s history of problems goes back to at least 2007.
LAHSA’s leaders and supporters tried to rally in its defense. A week before the court hearing, LAHSA issued a press release claiming an estimated five percent reduction in unsheltered homelessness, based on the “raw numbers” of the 2025 PIT count. This was the first time in years LAHSA has released the numbers before summer. The data behind the “raw numbers” was anemic, consisting of a summary table with no local detail. Former LAHSA CEO Dr. Va Lecia Adams Kellum said the early release was a response to the negative news about her agency. She went on to claim the 2025 count proved “we’re onto something” since it was the second year unsheltered homelessness declined. What she neglected to mention was the supposed 2024 reduction was so small, it was well within the count’s margin of error and was called “insignificant” by the USC professor LASHSA hired to interpret the data. The early release was so transparently self-serving, even Judge Carter called it “political grandstanding”.
LAHSA also claimed much of A&M’s review covered years before Dr. Adams Kellum became CEO, and she had been instituting reforms since she was appointed. LAHSA made the same claim in response to the County’s November 2024 audit. However, much of A&M’s review covered 2023 and 2024, when Adams Kellum was CEO. In any case, whatever reforms she implemented didn’t stop her from approving contracts for a nonprofit where her husband works.
Mayor Bass and Councilmember Raman also rushed to LAHSA’s defense, claiming defunding the Authority would cripple the “successes” made to date. They co-signed a letter to the Board of Supervisors urging members to withhold approval of the County’s proposed breakaway plan. Their plea fell on deaf ears, as the BOS approved the plan 4-0, with Supervisor Mitchell abstaining. Perhaps the Mayor and Councilmember were motivated by their personal stake in maintaining the current system’s status quo, as described in an earlier CityWatch article. City and LAHSA officials depend on each other to bolster their spurious claims of success, and there was a hint of desperation in the letter Bass and Raman wrote to the Board of Supervisors. If one agency falls, the next may soon follow. As expected, the LA Times joined the chorus defending LAHSA, publishing an April 1 puff piece painting LAHSA as an agency on the brink of great success, yet set upon by evil forces who want to dismantle it. Given the publication date and blatant pro-LAHSA bias, it would be easy to dismiss the Times’ story as an April Fool’s Day joke.
However, it is not enough to advocate for breaking LAHSA up. The City and County have proved themselves equally inept and equally guilty of gross mismanagement of homelessness programs. Simply transferring money and authority from one dysfunctional organization to another will improve nothing. At the March 27 hearing, attorneys for the L.A. Alliance for Human Rights advocated for receivership over LA homelessness programs. [Disclaimer, I do volunteer audits and program reviews for the Alliance]. A receiver would assume control over homelessness programs and have the authority to fundamentally reform the entire system. Judge Carter rightfully treaded lightly in that direction, asking Alliance attorneys what a receivership would look like. He was especially concerned an unelected judge would appoint an unelected receiver over taxpayer funds. Alliance attorneys responded that “the remedy needed to be extraordinary because the failure of the city and the county is extraordinary.” Given the long history of failures despite multiple promises for reform, that is hardly hyperbole. As I and others have reported several times, the system is fundamentally flawed, with three barely functional agencies (the City, County, and LAHSA) operating in their own silos, often at odds with one another.
But what would receivership look like? Can LA’s sprawling, multi-billion-dollar homelessness industry be tamed by one person? We can answer the second question first; no, one person cannot control all of Los Angeles’ homelessness programs. Nor should we expect one person to. A “homelessness czar” is a misnomer. The most effective leaders accept they don’t know everything and know the value of others’ expertise. A receiver would need a staff of experts on everything from mental health to performance measurement. That would be a major departure from the make-up of LAHSA’s current Board of Commissioners, which lacks a medical professional specializing in mental health or addiction, which plagues at least 50 percent of the unhoused population. In addition, LAHSA’s Board has shown no proclivity to hold providers accountable for the more than $700 million it pays in contract services every year. Indeed, it has shown reluctance to hold its own CEO accountable for writing checks to her husband’s business.
The check-writing scandal points to an absolutely vital qualification for a receiver. He or she cannot come from the incestuous culture of LA’s homelessness system. No matter what agency or what position, most homelessness senior program managers come from the same world. Dr. Adams Kellum was CEO of St. Joseph’s Center, one of LAHSA’s biggest contractors. Councilmember Yaroslavsky’s Director of Homelessness was a senior manager of LA Family Housing, another large nonprofit. Katie Hill, Supervisor Solis’ appointee to LAHSA’s Board of Commissioners, was a senior manager with PATH and HOPICS. With one or two exceptions, the remainder of LASHA’s Board is made up of community and housing advocates, with deeply entrenched political beliefs about the causes of and solutions to homelessness, none of which have worked in 30 years. A receiver would need to bring fresh perspectives, including a laser focus on performance and outcomes, to LA’s homelessness system.
A receiver’s main job would be to bring a sense of purpose, accountability, and responsibility to agencies that have largely been allowed to define how they choose to set their priorities. As A&M noted, providers and agencies often work in silos, with little regard for what others may be doing. A receiver’s first priority would be to provide an overarching vision and have all parties work toward common goals.
I don’t claim to have all the answers, but some of the initial steps to reforming homelessness are fairly obvious. For too long, leaders have been putting the cart before the horse by deciding what various programs should cost and then budgeting to fit the program. The result is nonprofits’ ability to dictate their program costs to the Council, as described in this article from the All Aspect Report. Instead, a receiver would identify the available funding (and any restrictions attached to it), and create a system from the ground up, with the intention of meeting stated goals, such as a targeted reduction in street homelessness within one year. Conservative estimates of total homelessness expenses in LA are about $2 billion per year, (they may be as high as $4 billion since various city and county departments have their own homelessness budgets). The question becomes how best to use that funding to benefit as many homeless people as possible, with priority given to those in greatest need of services. A receiver would consult experts in recovery, shelter management, outreach and housing to create, fund, and monitor the performance of programs targeted at specific populations. Gone would be the one-size-fits-all Housing First solution, which to date has resulted in ever-increasing budgets and an ever-expanding homeless population.
Perhaps as we move closer to receivership and reform, more details on what it would look like can be explored. For now, the most important thing is to send a clear message; business as usual will no longer be tolerated, and the voices of reform may have their chance to control the narrative.
(Tim Campbell is a resident of Westchester who spent a career in the public service and managed a municipal performance audit program. He focuses on outcomes instead of process in his iAUDIT! column for CityWatchLA.)
