As the region\u2019s lead homelessness agency, the main job of the Los Angeles Homeless Services Authority this year was to dole out nearly $700 million to contractors who operate shelters and other services for unhoused people.<\/p>\n
But it turns out that more than halfway through the budget year, many of LAHSA\u2019s 116 service providers are still waiting for LAHSA to pay them for those services. In all, the agency told LAist that it owes at least $69 million in outstanding invoices to providers. About 40% of those invoices are more than two months old.<\/p>\n
Those delayed payments are causing cash flow problems for organizations large and small. Several providers told LAist that they’ve have had to dip into reserves or take on debt.<\/p>\n
\u201cThese delays are one of the biggest issues for our organization because if we cannot pay our staff, we don’t operate,\u201d said Stephanie Klasky-Gamer, CEO of the nonprofit LA Family Housing<\/a>. “That breaks the entire system and renders people homeless.\u201d <\/p>\n Learn the ins and outs behind L.A.’s housing crisis.<\/p>\n Sign up for Building Your Block, a seven-issue newsletter course from LAist that explains the obstacles around housing development in L.A. and what you can do to make things better.<\/p>\n Where things stand<\/p>\n At a LAHSA Finance Committee meeting Friday, Janine Lim, the agency’s deputy chief financial office, broke down the issues based on agency.<\/p>\n Under contracts funded by city, the agency doesn\u2019t have some of the money it owes providers, Lim said.For county-funded contracts, LAHSA has the funds, but has failed to pass some of them to providers, she said. <\/p>\n Lim acknowledged her department failed to request certain county funds and told commissioners her team is overwhelmed by staff turnover and nonstop crisis management. <\/p>\n Lindsey Horvath’s rebuke<\/p>\n The meeting prompted a harsh rebuke from L.A. County Supervisor Lindsey Horvath Friday night, who issued a statement demanding a public hearing about LAHSA\u2019s late payments, a forensic audit and immediate payment of all outstanding invoices to county-funded contractors. <\/p>\n \u201cIf LAHSA were a publicly traded company, regulators would shut them down.\u201d Horvath said, in a statement \u201cLAHSA balance sheets don\u2019t balance, and they fail to provide real-time financial information to their very own commissioners.\u201d <\/p>\n LAHSA officials have said they’re working to fix delays and make internal changes so that they don\u2019t happen again. <\/p>\n And they offered more details on how they got here:<\/p>\n They said some payments were delayed because the agency is struggling to process an influx of recently submitted invoices. Other payments are delayed because the agency is still waiting for millions in payments, mostly from the city of L.A.<\/p>\n \u201cWhile a combination of contracting delays, outdated internal policies, and a leadership vacuum caused by the historic funding shifts happening within the rehousing system all contributed to this bottleneck, we are already taking corrective action,\u201d Ahmad Chapman, a LAHSA spokesperson, said in a statement. <\/p>\n LAHSA\u2019s funding sources <\/p>\n LAHSA has an approved budget of about $828 million this fiscal year. Most of that money \u2014 $697 million \u2014 comes from a variety of government sources and passes along to contracted service providers.<\/p>\n This budget year it breaks down like this, according to LAHSA records<\/a>:<\/p>\n 46% from L.A. County35% from the city of Los AngelesNearly 11% from the federal governmentMore than 8% from the state of CaliforniaA small fraction from private philanthropy, <\/p>\n LAHSA representatives said the delayed payments stem partly from delays in finalizing contracts with homeless service providers this fiscal year, which started July 1. <\/p>\n By that time, the agency had only finalized about one third of its contracts with providers. Providers can\u2019t file invoices until those contracts are final. <\/p>\n Now, eight months into the budget year, LAHSA said more than 99% of contracts are in place. But many weren\u2019t finalized until December. Now that contracts are executed, there\u2019s an \u201cavalanche\u201d of recent invoices from providers, covering the past six months, according to LAHSA officials. <\/p>\n Challenges for providers\u00a0<\/p>\n