Audit Prompts Upgrades at LA County Homeless Agency

(CN) – The agency tasked with reimbursing local providers who service Los Angeles County’s homeless residents must overhaul its process for reimbursement and improve management of funds, according to a state audit released Thursday.

The California State Auditor report said the Los Angeles Homeless Services Authority, or LAHSA, uses “outdated written procedures and a flawed documentation process” to collect data on providers and manage federal funds and money from voter-approved tax measures.

“To have a complete picture of the homeless services in [L.A. County], it should have complete and accurate data at each point of the funding process,” the audit said. “This should include the number of eligible providers, the reason providers do not apply for certain requests for proposals, which providers win funds and why, where they are located, and how programs are affecting homelessness. [LAHSA] is the only entity that has access to all of this information and how it intersects.”

LAHSA hired a contractor in 2016 to update policies and procedures, but still doesn’t have “current written procedures for much of its application evaluation process,” the audit said, nor does it “fully document certain aspects of its evaluation process.”

The agency used emails between staff members, management and the director of finance for application reviews and did not use a network hard drive to store documents, “which creates inefficiencies and decreases the transparency of the application evaluation process,” according to the audit.

LAHSA is responsible for partnering with local service and housing providers and reimbursing them for their services through federal funding. The authority’s funding comes from Los Angeles, L.A. County and the U.S. Department of Housing and Urban Development, or HUD.

The agency’s budget is expected to grow to $234 million in 2018 under Measure H, a one-quarter of a cent sales tax approved by voters. The tax is projected to raise $355 million annually for 10 years for housing projects for the homeless.

Peter Lynn, executive director of LAHSA, said the recommendations by the state auditor will “enhance LAHSA’s ability to track, report, and analyze funding decision data,” once implemented.

Between 2016 and 2017, Los Angeles received about 45 percent of the over $100 million LAHSA manages. About 55,000 homeless individuals reside in the area covered by LAHSA, the largest homeless population in a service area for the state.

California leads the nation with both the highest number of people experiencing homelessness, about 134,000, or 24 percent of the nation’s total, and the highest proportion of unsheltered homeless persons of any state at 68 percent, the audit said.

According to a January 2017 report by HUD, nearly 554,000 people were experiencing homelessness in the United States. The count includes both sheltered and unsheltered homeless people.

The number of homeless Americans increased for the first time in seven years, according to HUD. The largest increase was in California, where the homeless population increased by 14 percent between 2016 and 2017.

California also has the highest rate of unsheltered homeless: more than two‑thirds of the state’s homeless are living in vehicles, abandoned buildings, parks, or on the street, according to the audit.

“California should do more to address homelessness,” its summary states.

California funds 11 different support programs for homeless individuals and their families across the state. Multiple state agencies direct those services, instead of one single department managing the state’s efforts.

State Auditor Elaine Howle urged the Legislature to fully fund a central body to coordinate the state’s effort to end homelessness. Other states have reduced their homeless populations because they’ve established a “specific organization dedicated to addressing homelessness,” Howle said.

The Homeless Coordinating and Financing Council, a state body on homelessness established in 2016, was meant to act as the coordinator of projects and funding across the state. But Howle said the council “had no permanent staff and no funding for such staff” and therefore can’t act as the coordinating body.

“A single state entity could help the lead agencies resolve issues such as the need for additional resources to implement HUD-recommended activities and improve services for California’s homeless population,” Howle said.

LAHSA was cited in the report for awarding the smallest amounts of funding to service providers outside Los Angeles. Howle said the reason for this is LAHSA being limited in allocating funding to specific geographic areas, and few providers apply for funding from outside the city.

The agency is also tasked with helping local service providers update their operations and develop more capacity but doesn’t properly identify potential providers due to inefficient management which capture “limited data” on providers, the audit said.

LAHSA “could not accurately determine how much money it distributed to each service area for our audit period,” according to the report.

LAHSA’s operations were heavily criticized in another audit this month by the Los Angeles County Auditor-Controller’s office. The report said the agency is inadequately staffed to handle the scale and scope of its fiscal duties. It has also allegedly delayed payment to service providers, resulting in providers dolling out services without a contract.

The agency has said it hopes to have its offices fully staffed by June 30 and implement a streamlined, computer-based system of tracking finances and contracts.

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