Enough Is Enough: City Hall, LAHSA, and the Mayor’s Office Funneled $1

THE BOTTOM LINE - Los Angeles is now facing a scandal so massive it can no longer be dismissed, excused, or spun. One of the city’s largest homeless service providers received over $100 million in taxpayer funds while violating mandatory federal audit laws, and the very institutions responsible for oversight — the Mayor’s Office, City Administrative Officer, City Council leadership, LAHSA’s executive team, and the County Chief Executive Office — kept the money flowing and stayed silent. This is not a paperwork problem. This is a system-wide governance failure.

For years, Angelenos have been told to trust the “coordinated” homelessness response between the City and County. But this scandal exposes the truth: the system is not coordinated — it is collusive. It protects its own insiders, its own contractors, and its own political interests, while the public is denied transparency and accountability.

The LAist investigation confirms what thousands of residents have suspected for years: L.A.’s homelessness bureaucracy has become a multi-agency shield, not a solution.

The Mayor’s Office pushed unprecedented homeless spending without demanding audit compliance.
The City Council’s leadership committees approved contracts without ensuring federal requirements were met.
The City Administrative Officer signed off on funding despite red flags.
The LAHSA Commission and executive leadership failed to enforce the law.
The County CEO’s Office allowed the same provider to continue receiving funds.

Every layer of oversight failed. Every single one.

Meanwhile, the region’s homeless population has exploded to over 75,000, even as L.A. County pours more than $3 billion a year into a homelessness system that cannot perform basic financial oversight. The City of Los Angeles increased its homelessness spending to $1.3 billion in the current budget, yet homelessness increased 10% last year. If this is the result of “coordinated leadership,” then leadership has failed.

Federal law requires strict annual audits for any entity receiving $750,000 or more in federal funds. This provider received more than 100 times that amount, failed to comply, and still saw its contracts renewed. Instead of pulling funding,
City Hall approved more. LAHSA distributed more. The Mayor’s Office defended more.

The homelessness system isn’t broken — it is functioning exactly as its political architects designed it: unaccountable, opaque, and self-protective.

LAHSA — now approaching a $1 billion budget with over 1,000 employees — has proven itself incapable of overseeing the providers it funds. Its failure is not procedural — it is structural. It was built to distribute money, not enforce accountability. That is why providers can fail audits, fail performance benchmarks, fail financial controls — and still get richer.

City Hall and the County are no better. They have created a nonprofit industrial complex that absorbs billions, delivers minimal outcomes, and shelters underperforming agencies behind layers of bureaucracy. Some nonprofit executives make $350,000 to $400,000 per year running organizations that cannot pass federal audits or meet housing placement standards.

And what do Angelenos get for the billions spent? A system where only 4 out of every 100 unhoused people entering LAHSA’s system reach permanent housing — and in some programs, over half fall back into homelessness within a year.

These outcomes are not the result of insufficient funding — they are the result of insufficient oversight from the institutions responsible for enforcing it.

And the most damning fact of all: none of this was revealed by the Mayor’s Office, the City Council, LAHSA, the CAO, or the County.
It was revealed by journalists.
The oversight agencies did not blow the whistle — because they are part of the system that allowed this to happen.

This requires more than reforms. It requires a reckoning.

Here is what must happen now — not eventually, not symbolically, but immediately:

The Mayor’s Office, LAHSA executive leadership, and the City Administrative Officer must freeze all contracts and payments to any provider that fails federal audit compliance. Not one more dollar.
A full federal-level forensic audit must be launched into all major homeless providers — and into LAHSA itself, including its executive operations and grant management practices.
The City Council must pass an ordinance mandating public quarterly audit and performance disclosures for every homelessness contractor and for LAHSA as an institution.
LAHSA must be restructured or dismantled if it cannot enforce full compliance with federal audit and performance standards.
The leadership roles responsible for this breakdown — Mayor’s Office homelessness deputies, LAHSA executives, CAO budget oversight teams, and Council committee chairs — must face public accountability.

Los Angeles is not failing because it lacks money. It is failing because the institutions entrusted with billions have failed to guard the public trust. A provider taking $100 million in violation of federal law and still receiving more funding is not a homelessness scandal. It is a government scandal.

This is not an exception. This is the system. And until the institutions responsible for this failure — the Mayor’s Office, LAHSA, City Hall, and the County bureaucracy — are forced to confront their role in this disaster, nothing will change.

Angelenos deserve accountability. And they should demand it — loudly, relentlessly, and without apology.

(Mihran Kalaydjian is a seasoned public affairs and government relations professional with more than twenty years of experience in legislative affairs, public policy, community relations, and strategic communications. A respected civic leader and education advocate, he has spearheaded numerous academic and community initiatives, shaping dialogue and driving reform in local and regional political forums. His career reflects a steadfast commitment to transparency, accountability, and public service across Los Angeles and beyond.)