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iAUDIT! - If there’s one thing that’s easy to find in online media, it’s stories about driverless cars going out of control. Some stories are amusing (at least from afar), like when Waymos froze in the streets during a citywide power failure in San Francisco. Others are tragic, such as stories of Teslas losing control while in driverless mode. In Santa Monica, neighbors waged a guerilla war against a Waymo charging center; when the city failed to act on complaints of excessive noise and stalled cars in a narrow street, local residents took matters into their own hands by placing bags over the vehicles’ sensor domes and taping over cameras to freeze them in place. They also flooded the City Council with complaints until it finally ordered the rideshare company to cease overnight operations. For its part, despite being “driverless”, Waymo employs about 70 remote managers to provide around the clock vehicle monitoring who can take control when the car is in a situation its onboard AI software can’t handle. However impressive the concept of driverless cars is, at present its clear humans cannot abdicate complete control to our computer overlords just yet.
Apparently, LAHSA’s leaders expect its financial operations to take care of themselves like a supercharged Waymo. The lack of effort to oversee an $800 million annual budget would be a source of shame in any other public agency. Despite a history of negative audits and findings stretching back 20 years, LAHSA’s leaders have shown no inclination to reform its financial processes.
The latest fiasco involves the Authority’s failure to meet the March 31 deadline for its federal annual Single Audit. The Single Audit must be submitted by non-federal public agencies receiving at least $1 million in federal money; LAHSA receives millions in HUD homelessness solutions funding every year. The Single Audit's objective is to provide assurance to the federal government as to the management and use of federal funds by recipients such as states, cities, universities, non-profit organizations, and Indian Tribes. The audit is performed by an independent audit firm and encompasses both financial and compliance components. As intimidating as the language appears, the Single Audit is primarily ministerial and procedural. It is not a performance audit and makes no judgement about how effectively funds are used. It is considered a routine annual task by most local governments.
I’d never heard of a public agency missing its Single Audit deadline, so I Googled what the possible consequences are. They include:
- Funding Suspension/Termination: Federal agencies may freeze or terminate current grants and withhold funds until the audit is submitted and deficiencies are remedied.
- Debarment and Future Funding Loss: Continued non-compliance can lead to being listed on the SAM.gov (System for Award Management) database, prohibiting the organization from receiving future federal awards.
- Increased Audit Scrutiny: The organization may be classified as a "high-risk auditee," resulting in more rigorous audits for future years.
- Mandatory Repayment: Auditors or federal agencies may demand repayment of funds if compliance cannot be documented.
- Reputational Damage: Late audits can damage relationships with funding agencies, donors, and the public, affecting future funding opportunities.
The last point about reputational damage is probably the least of LAHSA’s worries, given the dismally low opinion most people--including the homeless themselves--have of the Authority’s ability to serve its target population.
LAHSA’s leaders took their usual blasé approach to missing the deadline. They used the same excuses they’ve used for nearly 20 years, including staff turnover, which is no excuse; unless former staff were replaced by complete incompetents, there is no reason existing or new Finance employees could not provide the auditors with the required documentation. In a particularly ironic statement, LAHSA’s Deputy CFO Janine Lim told the Commissioners she’s been talking to HUD, and the federal agency as been “amenable to our situation”. The statement was ironic because, while she’s been talking to HUD, she and LAHSA CEO Gita O’Neill seemed to have forgotten to communicate with Commission members themselves. As you can see in a video of the March 18 meeting of LAHSA’s Audit Committee, neither O’Neill not Lim bothered to notify Audit Committee members there was a problem with the audit timeline until a few weeks before the submission deadline.
In what has become a depressingly familiar excuse, O’Neill told Commissioners she hired accounting firm KPMG to advise on modernizing the Authority's financial systems, including the need to pay contractors on time, a major problem that has plagued LAHSA for years, culminating in owing providers more than $69 million. O’Neill’s statement is troubling because it’s an implicit admission that internal financial leadership has failed to fulfill a basic obligation of a public agency’s finance team: to properly track payments and ensure there is sufficient documentation to trace revenues and expenses. Perhaps this failure is one of the reasons LAHSA CFO Janine Trejo has been on an extended leave, as reported by LAist. Under her watch, an LA County audit found LAHSA pays on contracts that have expired or have not yet been approved. It also moves money from restricted funds to pay providers with past due bills. It doesn’t even have an accurate database of current contractors. As I’ve said before, LAHSA doesn’t know how much its paying, who its paying, or what its paying for. In the much broader context of LAHSA’s chronic mismanagement, a missed audit deadline is merely a symptom of deeper structural problem.
LAHSA exists primarily as a funding conduit. It collects money from the federal and state governments, plus the City and County of LA, and uses those funds to pay a huge constellation of providers. The Authority has an annual budget of $800 million and a staff of more than 800. Given that financial operations are its primary function, one would think it would be a model of responsible business practices. Instead, we see an organization in such disarray it doesn’t even know who its contracting with. For 30 years, leadership’s obsession with appearance over results has left LAHSA with a leadership vacuum. Although there may be people occupying key positions, clearly those people lack the professional expertise to run a complex public agency. The CFO can’t seem to get a handle on basic financial functions, and the CEO seems incapable of demanding accountability from her executive team.
There may be no better example of LAHSA’s crisis of leadership than its former CEO, Dr. Va Lecia Adams Kellum. Dr. Adams Kellum took office in early 2023, with the enthusiastic support of personal friend Karen Bass and the County Board of Supervisors. According to whistleblower complaints, she soon fired key staff, replacing them with unqualified friends from her former nonprofit, St. Joseph Center. She also approved multi-million dollar contracts with a nonprofit where her husband is a senior manager, (supposedly by accident), and approved contracts with St. Joseph Center within a few months of becoming LAHSA’s CEO, in possible violation of state conflict of interest laws. Adams Kellum resigned in April 2025, after the County voted to pull $350 million from the Authority because of its failure to substantively address homelessness.
Despite obvious and deep-seated mismanagement, two whistleblower suits settled for more than $800,000, and approving contracts with her husband’s nonprofit, an internal investigation cleared Dr. Adams Kellum of any wrongdoing. Compare that outcome with a similar situation in San Francisco, where former Executive Director of the city’s Human Right’s Commission, Sheryl Davis, has been charged with felonies surrounding her misuse of public funds. The allegations against Ms. Davis include steering almost $8.5 million in grants to a nonprofit collation her domestic partner leads. While it took years for the City of San Francisco to take legal action, at least it has tried to bring some kind of accountability to the situation. We cannot say the same in Los Angeles.
Like the missed audit deadline, Dr. Adams Kellum mismanagement and questionable contract practices are just symptoms of a deeper structural problem. For years, local officials from the City, County, and LAHSA have treated homelessness as either a social justice issue or a public relations problem. Tremendous amounts of effort and resources have gone into painting the unhoused as helpless victims of a merciless and unfair economic system. That’s one of the reasons LAHSA’s Board of Commissioners does not have a member who is a medical professional specializing in substance abuse or mental health but has multiple members representing the advocacy and development communities. Its why press events are long and rhetoric and short on reliable performance data. Its easier (and more profitable) to pay lip service to social issues than to do the hard work of addressing the many root causes of homelessness, including pervasive substance abuse and untreated mental illness.
A few weeks ago, before it admitted it would miss the audit submission deadline, I wrote a column on LAHSA’s slow and painful financial suicide. The Authority is systemically incapable of reform because it can’t (or won’t) hire the professionals needed to impose organizational coherence to its operations. That level of professionalism is anathema to LAHSA’s culture of politicalization of homelessness and the promotion of rhetoric over results. As I said in my column, perhaps the best thing to do is let LAHSA die the death it seems to be working so hard to achieve.
BTW, to see the absurd lengths LAHSA’s PR team will go to in an effort to avoid accountability, see this column in Circling The News. While leaders frittered away the days ignoring the impending deadline, LAHSA’s Communications Director was busy denying the Authority wouldn’t miss the audit’s due date.
(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.)
