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ICYMI: Federal Judge Greenlights Scope of Audit on L.A. Homelessness Initiatives

LOS ANGELES - A federal judge Friday adopted plans for a comprehensive financial and performance audit of each and every homelessness assistance program and initiative funded or conducted by the city of Los Angeles.

U.S. District Judge David Carter said he approved of the scope of the forthcoming audit as outlined in a filing by the L.A. Alliance for Human Rights and indicated that he had the names of 14 auditing firms to choose from. He said he expected firms to begin presentations to the court of their ability to undertake the work at an April 4 hearing in downtown Los Angeles.

A time line for completion of the extensive accounting was not discussed.

The L.A. Alliance seeks to determine whether expenditures made by the city and/or the Los Angeles Homeless Services Authority -- LAHSA -- are effective in reducing homelessness and providing shelter or housing or whether the programs have a negative impact on achieving that goal, according to the guidelines for the audit.

The audit would also seek to determine whether public funds are utilized effectively and efficiently by the city, LAHSA and/or service providers; whether accurate data is being used in reporting the results of homelessness assistance programs; whether the city and/or LAHSA has a process to hold service providers accountable for poor performance; and how many net new housing and shelter beds have been created, how many individuals have been placed, and therefore, how many people have been served by each of the programs since March 2020.

Similar independent audits have been undertaken in Oakland, as well as Austin, Texas, and elsewhere.

The homelessness assistance programs to be scrutinized are to include, but are not limited to, programs used by L.A. Mayor Karen Bass in her 2024- 2025 draft budget summary, which includes a $1.3 billion commitment to end homelessness, the filing states.

The audit would look at three specific areas, the judge said, referring to Bass' Inside Safe program, designed to move unhoused residents from street encampments indoors and two other agreements.

Carter said at a brief hearing Friday that homelessness service providers must be aware that if they don't provide substantial documentation of the work they've ostensibly done in exchange for city funds, "the presumption is they didn't do the work."

Earlier this week, Bass and the head of LAHSA committed to providing increased transparency about money spent on homeless services. Both agreed to publicly post detailed invoices from service providers, a first for the city, the judge said.

The hearings are part of a lawsuit brought by the L.A. Alliance, a group of downtown business owners who accuse the city of failing to meet the terms of its 2022 settlement agreement to clear homeless encampments and create more shelter beds. The county settled with the plaintiffs last year.

Carter recently said that the plaintiffs were apparently "misled" by the city, but declined to immediately rule on a request by the L.A. Alliance to have the city pay a nearly $6.4 million fine for allegedly missing deadlines detailed in the settlement.

While the proposed fine is still on the table, the latest hearings in Los Angeles federal court have focused on efforts to determine exactly where the dollars budgeted for homeless services have been going and whether those programs are effective.

The judge reminded the parties Monday that three years ago it was found that there had apparently been "absolutely no accounting and no transparency" for at least $600 million that had flowed through the city to combat homelessness in years before Bass was elected mayor in 2022.

Quoting from former California State Auditor Elaine Howle's February 2021 report on homelessness in California, Carter said, "The state continues to lack a comprehensive understanding of its spending to address homelessness, the specific services the programs provide or the individuals who receive those services."

Carter approved the city and county's settlements with the L.A. Alliance on the condition that he closely monitor their progress in meeting deadlines and goals.

Part of the April 4 hearing has been set to discuss the county's efforts to meet its own settlement goals. Carter said Friday he was impressed with the county's progress.

"The county has done an exemplary job in meeting its goals," the judge said from the bench. "In fact, it may have over-performed."


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