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iAUDIT! - Normally, I defer to fellow columnist and local budget guru Jack Humpreville when it comes to discussions of LA’s use of taxpayer dollars. He has vast experience and expertise in Los Angeles’ byzantine budget process. But I’d like to focus on how the city and county are using our tax dollars in the homelessness universe, where billions of dollars flow through dozens of departments and programs, much of it shrouded behind a veil of finance-speak and PR spin.
Before getting into the specifics, readers should understand public officials’ obligation to use public funds responsibly. US Government Auditing Standards state public managers have an affirmative duty to use their resources to achieve the best possible results. GAO standards state, “The concept of accountability for use of public resources and government authority is key to our nation’s governing processes. Management and officials entrusted with public resources are responsible for carrying out public functions and providing service to the public effectively, efficiently, economically, ethically, and equitably within the context of the statutory boundaries of the specific government program”. And “As reflected in applicable laws, regulations, agreements, and standards, management and officials of government programs are responsible for providing reliable, useful, and timely information for transparency and accountability of these programs and their operations. Legislators, oversight bodies, those charged with governance, and the public need to know whether (1) management and officials manage government resources and use their authority properly and in compliance with laws and regulations; (2) government programs are achieving their objectives and desired outcomes; and (3) government services are provided effectively, efficiently, economically, ethically, and equitably.” What that means in plain English is that all government officials use the resources they’ve been given to their best and highest use.
As a former public service manager, I can attest how seriously professional civil servants take our obligation to use taxpayer money responsibly, (and don’t forget public servants are taxpayers too). It’s in everyone’s best interests to use public resources as efficiently and effectively as possible. I never forgot we were using other people’s money. Let’s take a look at how seriously local elected officials take that obligation.
On September 25, the Westside Current published a story about Urban Alchemy, (UA), a nonprofit providing homelessness services in several Western states. San Francisco's Controller/Auditor is investigating the NPO for blowing out its budget to the point it risked insolvency. As usual, UA's well-paid and politically connected CEO, Lena Miller, went on offense, claiming the investigation is politically motivated (although she didn't say by whom). This investigation is in addition to the one started by LA’s City Controller Kenneth Mejia but stymied by Mayor Bass (who knows Miller). UA's staff have been the subject of civil lawsuits and criminal investigations in several other cities. Yet the City of Los Angeles’ contract has been renewed and amended with no review four times since 2021 and is now at least $19.3 million not counting zero dollar lease agreements.
When faced with challenges and investigations, UA adopts the typical NPO tactic of screaming it will be forced to lay off many of its staff and cut back on programs, despite seeing its revenue and executive compensation skyrocket.
We really have to wonder what it is about Urban Alchemy that makes cities like San Francisco and LA keep contracting with it despite the scandals swirling around it. One reason may be the political ties Miller has with elected officials. Another may be appearance. UA tends to hire formerly incarcerated people as peer counselors, claiming they more readily connect with the unhoused. although there is little empirical support for that claim. But it makes good PR, especially in LA, where including people with "lived experience” in homelessness programs has become a near-obsession.
Moving from one investigation to another, LAist reported on the County’s investigation of LAHSA’s senior management. The Office of County Investigations, (OCI), an arm of the County Auditor/Controller, is looking into LAHSA’s failure to notify the office of allegations of fraud and abuse, as required by an agreement between LAHSA and the OCI. The investigation will also look into the allegations themselves, which include possible misuse of taxpayer money on staff parties and manipulation of homelessness count numbers. The OCI investigation comes on the heels of a devastating County audit of LAHSA’s financial mismanagement and an equally damning assessment ordered by federal judge David O. Carter. LAHSA’s management tried to defend its failure to report the allegations by claiming they were part of an ongoing personnel investigation, which is not subject to the disclosure agreement. As the LAist article points out, LAHSA failed to notify the OCI even after it settled the whistleblower lawsuit, which would have terminated the personnel investigation but left the allegations unaddressed. Even though it’s been almost a year since LAist first revealed the problems with LAHSA financial practices, (including the former CEO approving contracts with her husband’s nonprofit), LAHSA has been typically slow to act. It is just starting to address the need for managers to disclose financial conflicts of interest, meeting on September 25 to discuss a draft policy, 10 months after the LAist revealed Va Lecia Adams Kellum, the former CEO, approved contracts worth at least $2.1 million to a nonprofit where her husband was a senior manager.
Turning back to the City, its use of taxpayer money is response to the court-ordered assessment and its fallout can best be described as schizophrenic. On one hand, the City Council is studying plans to break away from LAHSA and establish its own homelessness agency, reflecting earlier actions by the County to defund LAHSA because of its poor performance. On the other hand, it authorized almost $6 million in payments to law firm Gibson Dunn & Crutcher to appeal Judge Carter’s decision to appoint a monitor to ensure the city’s reports on homelessness are as accurate as possible. That approval came after the City Attorney allowed a $900,000 contract to balloon to $1.8 million without telling Councilmembers. But despite the appeal, the City recently agreed to the appointment of former City Controller Ron Galperin as the monitor, and to pay his costs. On September 25, the CAO’s office, despite assurances during hearings in May that it can meet its obligations to provide the number of shelter beds in its settlement with the LA Alliance for Human Rights, brought a new plan to meet the target number of beds to the Council’s Homelessness Committee. If the City was confident in May that it could meet its shelter bed obligations, why would it need a new plan? In its agenda letter, the CAO claimed the city’s Time Limited Subsidy (TLS) program has a 67 percent transfer rate to permanent housing. If true, this would be remarkable since most other programs barely reach 20 percent. Unfortunately, the 67 percent comes from, at least partially, LAHSA, whose numbers are notoriously unreliable. So, the City will spend at least $6 million fighting a lawsuit that requires it to agree to a monitor over its performance reporting, while simultaneously paying that monitor and claiming its revised shelter plan is already sufficient, but revising it per the court order it is appealing. If that sounds confusing, it is. But its consistent with local government’s pinball game style of homelessness programming, where the focus--and the money--bounces from one subject to another with no coherent plan.
It seems some of our Councilmembers are willing to fund programs that reflect their ideology, even when its clear they don’t work. In a September 24 article in the City Journal, social researcher Stephen Eide describes the chaotic scene in and around MacArthur Park. Norm Langer, long-time owner of the delicatessen that shares his last name, discussed the park’s decline since the early 2000’s. What could be a jewel of green space for the working-class families in the Westlake neighborhood is instead a dangerous open air drug market accompanied by routine overdoses and sex trafficking in the surrounding side streets. Eide’s article outlined how Councilmember Eunisses Hernandez’s approach using “life affirming responses and services” have done nothing to stem the tide of overdose, crime, and death in the park, (the day after Eide visited the park, a corpse was found floating in the park’s lake). Rather than using law enforcement as one of several tools to restore order, Hernandez is a vocal supporter of defunding the police, instead favoring services that have been proved to be largely ineffective in an environment where fentanyl, methamphetamines, and other powerful drugs hold hundreds of victims in their grip, and untreated mental illness is commonplace.
These are just a few examples of how our elected leaders use taxpayer money. Rather than applying objective performance-based measures to homelessness programs, leaders rely on rhetoric and ideology, as I described in a previous column. It seems that once they have access to taxpayer money, many leaders feel as if they can use the money as they choose, with little accountability to the public. This attitude is in direct conflict with GAO guidelines and the principles of ethical governance. But it is up to us as residents and taxpayers, to inform ourselves on how our money is being used, and to hold those who misuse it accountable for their actions.
(Tim Campbell is a longtime Westchester resident and veteran public servant who spent his career managing a municipal performance audit program. Drawing on decades of experience in government accountability, he brings a results-driven approach to civic oversight. In his iAUDIT! column for CityWatchLA, Campbell emphasizes outcomes over bureaucratic process, offering readers clear-eyed analyses of how local programs perform—and where they fall short. His work advocates for greater transparency, efficiency, and effectiveness in Los Angeles government.)
