City Officials May Have to Answer for “Damning” Homeless Audit

By TIM CAMPBELL

The ongoing legal wrangling between the LA Alliance for Human Rights and the City of Los Angeles took a dramatic turn on Thursday, May 15.  Federal Judge David O. Carter scheduled in-person testimony to begin May 27 on the recently-completed report by the audit firm Alvarez & Marsal (A&M).  As has been reported by several news agencies, the report was damning; auditors found neither the City nor LAHSA properly manage hundreds of millions of dollars in contracts, paying providers with no proof of performance.

In some instances, A&M found evidence of fraud, such as serving only two meals to people in shelters but charging for three and overstating the staffing levels at some shelters.  In addition, the report found the City could not prove its claim to have created more than 1,000 housing units, a story described in detail in LAist. A few days before the May 15 hearing, LAist also reported that two whistleblowers alleged LAHSA’s CEO, Dr. Va Lecia Adams Kellum ordered her staff to alter the statistics on Inside Safe, Mayor Bass’ hallmark homelessness program.

The City’s legal team has been doing its best to avoid having its officials testify in open court.  Many of the City’s objections are based technical objections to the plaintiff’s, (the LA Alliance for Human Rights), timing of its requests for testimony.

Remarkably, the City’s attorneys said Mayor Bass should be exempt from testifying because she’s simply too high up the organizational ladder.  Lesser officials have the same knowledge.  Judge Carter found that argument lacking, stating “The conversation has to ‘start at the top of responsibility.’” Just as she has tried to dodge responsibility for the City’s Palisades fire response, the Mayor seems to be trying to avoid answering for the many questions the A&M and other audits have raised.

She may be wise to avoid testifying. After a rushed March 27 appearance before the court, Mayor Bass made the outrageous claim A&M’s audit was just about “administration” while she was more concerned with “people.”

The statement was a perfect example of the hubris and deflection that have defined homelessness program leadership for 20 years.  The city attorneys’ argument to prevent Mayor Bass’ testimony raised an interesting question.  If she can appear at a press event and tout the supposed success of her programs, as she did last December, why can’t she describe that success in court?

As those who have been following the lawsuit know, the LA Alliance for Human Rights has been making the case for Judge Carter to appoint a receiver to manage the City’s, County’s, and LAHSA’s homelessness programs.

Judge Cater has properly proceeded cautiously, concerned that an unelected judge might appoint an unelected receiver to control billions in taxpayers’ dollars.  At the May 15 hearing, A&M’s lead auditor, Diane Rafferty, seemed to support the idea of a receiver, telling the court, “All of this needs to be looked at in a different way,” saying a review of the city’s homelessness services “needs to start from the ground up.”

So, how does scheduling hearings relate to the push for a receivership?  Keeping in mind Judge Carter’s cautious approach, he likely wants to be sure a receiver is the only option for true reform.

As the May 15 LAist article explains, the judge intends to take a deeper look at the questionable numbers uncovered by A&M and an earlier audit by the L.A. County Auditor.

If a deep dive into the numbers is coming, LAHSA, the City and the County have good reason to try to avoid a public hearing.  While City and County officials use controlled press events to tout supposed success, they have been much more reticent in responding to audits.  Besides Mayor Bass’ snide reference to “administration”, neither the City nor LAHSA have submitted responses to A&M’s report refuting its findings.

Holding hearings in court will force local officials to answer publicly for the reports’ findings.  Remember, these are the same officials who claim they are driving reform, such as the County’s Board of Supervisors’ decision to pull its funding for LASHA.

We should rightly suspect their sincerity, especially in light of the fact the people overseeing Measure A’s new revenues are the same ones who run the current programs that have wasted hundreds of millions of dollars over the past several years.

Can we really expect these officials to implement the fundamental changes needed to restore the public’s trust in the effectiveness of LA’s homelessness programs?  If local officials can’t explain how their programs provide substantial assistance to the unhoused, and what systemic reforms they intend to implement, then perhaps we’ll be one step closer to a receivership.