LOS ANGELES (AP) — Los Angeles officials moved Tuesday to take control of hundreds of millions of dollars in homelessness spending, citing two scathing audits that found the government agency currently responsible for that money has spent it recklessly and without transparency.

An audit this month found poor record-keeping prevented the Los Angeles Homeless Services Authority, or LAHSA, from tracking spending and verifying whether paid-for services were provided. The authority also paid invoices late, lacked an adequate system to monitor contracts and could not provide documentation to account for $5 million in cash advances sent to five service providers, according to a report in November.

On Tuesday the LA City Council unanimously approved a motion asking staff to produce a report on how Los Angeles could effectively sidestep the authority and directly contract with homeless service providers.

The agency, which is jointly funded by the city and county, was formed in 1993 as a result of a lawsuit settlement addressing limited access to public funds. It coordinates and manages money that goes toward shelter, food programs and a wide range of services for unhoused residents. It has an annual budget of approximately $875 million.

The homelessness crisis is visible in downtown Los Angeles, where hundreds of people live in makeshift shanties that line entire blocks in the notorious neighborhood known as Skid Row. Tents regularly pop up on the pavement outside City Hall. Encampments are increasingly found in suburban areas under freeway overpasses. A 2024 survey found that more than 75,000 people were homeless on any given night across LA County.

California accounts for nearly a third of the homeless population in the United States.

Los Angeles Mayor Karen Bass, who has made tackling homelessness a major priority, did not immediately comment on Tuesday's vote. Va Lecia Adams Kellum, a Bass ally, has been CEO of LAHSA since 2023, including for more than a year during the timeframe reviewed by auditors.

City Councilmember Monica Rodriguez, who introduced the measure, said the city should have cut ties with the agency years ago.

“It's now been verified by two audits that they cannot produce an account for the work that they are funded to do. And that, to me, is an egregious breach of taxpayer trust,” Rodriguez told The Associated Press on Monday.

Rodriguez also wants to create a city department accountable to the council and the mayor, that would develop and manage programs for unhoused residents.

The authority did not address the criticisms in a statement after the vote, but noted the county's unsheltered homeless population has declined over the past two years.

"To keep this momentum going, all partners in this effort must remain committed to the alignment and to continuing the improvement being made,” the statement said.

Meanwhile the Los Angeles County Board of Supervisors will vote April 1 on a proposal that would shift nearly $350 million in annual taxpayer funds that go to LAHSA to create a new county department on homelessness.

“With recent audits underscoring the urgent need for reform and stronger accountability, now is the time to implement long overdue change,” Supervisor Lindsay Horvath said in a statement.

Under the motion before supervisors, the authority would continue to get support from the county for a limited number of programs and services required by the federal government, including the annual homeless count.

This month LAHSA released preliminary results from January's annual tally of unhoused residents that anticipated a 5% to 10% decrease in unsheltered homelessness in the region, which would continue a decline first seen last year.

“When I first came to LAHSA, I publicly stated that we wanted to reduce unsheltered homelessness within three years,” Adams Kellum said in a statement accompanying the early numbers. “We’ve done it in two.”

The final results of the 2025 count are expected to be released in May or June. The agency said the preliminary figures indicate LA County is moving in the right direction toward solving homelessness.

News from © The Associated Press, 2025