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Los Angeles County officials approved a plan Tuesday to take over payments to homeless service providers after serious financial problems surfaced at the Los Angeles Homeless Services Authority, known as LAHSA. The move is intended to ensure providers are paid and that services for unhoused residents continue.
The Los Angeles County Board of Supervisors voted 5-0 to approve the plan introduced by Third District Supervisor Lindsey Horvath. The county will also place its own staff inside LAHSA to review financial records and monitor the agency’s payment system.
The action comes after Horvath revealed major problems with LAHSA’s financial obligations, including missed payments to service providers even though the county had already advanced funding to the agency.
“This problem is not new. We learned (in late February) that LAHSA cannot provide real financial information and has refused to allow county workers to provide them help, while county service providers remain unpaid,” Horvath said. “My phone is ringing off the hook from service providers.”
LAHSA Interim Chief Executive Officer Gita O’Neill responded to the concerns and said the agency is working to resolve the payment delays. She said the agency was overwhelmed by a large number of invoices.
According to O’Neill, the backlog was caused by contracting delays, outdated internal policies, and the loss of key staff members with institutional knowledge.
“We have identified many of the problems and are already taking corrective action,” O’Neill said.
Los Angeles County Acting Chief Executive Officer Joseph Nicchitta said the county will continue working with LAHSA through the end of the current fiscal year. After that, funding for homeless service providers will remain with the county and will be administered through the county’s Department of Homeless Services and Housing.
Nicchitta said LAHSA has historically carried over accounts, meaning some invoices and payments could continue beyond July. He said the county is currently waiting for documentation related to about $11 million in pending payments.
Under the motion approved by the Board of Supervisors, the county will directly pay homeless service providers for work performed under county-funded programs. County employees will also be embedded inside LAHSA to help address financial and administrative problems.
The board also ordered a full audit of LAHSA’s finances. The audit will be led by Los Angeles County Auditor-Controller Oscar Valdez and is expected to take two to three weeks.
Valdez will present an oral report to the Board of Supervisors on April 14. The report will include the results of the audit and a corrective action plan designed to improve transparency and ensure timely payments to service providers.
“I did meet with the county’s auditor-controller and the Homeless Services & Housing department leadership,” Nicchitta said on Tuesday. “We all agreed a review of LAHSA policies, procedures, financial records and advances was warranted. In order to make sure this does not happen again.”
Nicchitta said he has scheduled a meeting later this week with O’Neill to discuss the situation further.
LAHSA officials have said they are willing to cooperate with the county auditor-controller’s office and provide assistance during the review.
County officials are also coordinating with the City of Los Angeles. Nicchitta said he has been meeting with Los Angeles City Administrative Officer Matthew Szabo and his staff to share information.
“Information is being shared at those meetings. We are communicating,” Nicchitta told the Board of Supervisors.
Board Chair and First District Supervisor Hilda Solis said the public expects answers and that service providers should receive their payments.
“I will await to see what the auditor will report back. And for money to go to those providers. Our constituents want to know,” Solis said.
