Late last month, an executive with the Los Angeles Homeless Services Authority informed an oversight body of a brewing problem: the agency was delayed in paying millions owed to homeless service providers.
The executive, deputy chief financial officer Janine Lim, in part blamed staff resignations and plummeting moral amid uncertainty over the agency’s future.
Come July, following years of criticism directed at LAHSA for mismanagement, the county will have moved most of its funding from the joint city-county agency and transferred it to a new county department. The city of Los Angeles is considering a similar move.
“LAHSA is experiencing a monumental change which at the heart of it has affected our people’s ability to pivot,” Lim told LAHSA commissioners last month.
On Tuesday, the County Board of Supervisors stepped in and directed staff to formulate a plan to speed up payments. It also approved funding for a county financial review of LAHSA that was announced last week.
The action came at the request of Supervisor Lindsey Horvath, who has repeatedly chastised the agency, saying that if it were a public company “regulators would shut them down.”
“My phone is ringing off the hook from service providers who are demanding to be paid,” Horvath said Tuesday.
LAHSA has long faced criticism for how it manages the region’s homeless services. Audits have found the agency lacked proper oversight over its funds and programs, leaving them susceptible to waste and fraud. Nonprofit providers have also repeatably complained about late payments.
County supervisors cited those issues when last year they voted to remove funding from LAHSA and set up a new county homeless department to manage county-funded programs.
But those dollars and contracts won’t transfer until the next fiscal year, starting in July. And LAHSA is once again delayed in paying nonprofit operators, even though the county in 2024 approved cash advances to LAHSA to avoid the problem.
During the February LAHSA finance meeting, Lim said the agency owed providers $69.3 million, with $26.9 million of that owed on invoices that are at least two months old. On Tuesday, a LAHSA spokesman said the overall backlog had been reduced to $53.4 million.
Those figures include contracts that LAHSA manages for the county and the city and LAHSA said the city was delayed in transferring it money, contributing to the delays.
Horvath on Tuesday also said LAHSA previously denied an offer from the county to provide additional employees during the transition to the new department.
In a statement last week, LAHSA CEO Gita O’Neill said “outdated internal policies” have also caused delays and the agency is working on fixing the problem.
She said she believed the county financial review would “show the same pain points in our invoice payment processes that LAHSA is already identifying.”
“We look forward to [the county review’s] insight and assistance as we move forward with planned changes to this process,” O’Neill said.
