The agency\u2019s financial statements initially included \u201csignificant\u201d inaccurate amounts that needed to be adjusted late in the audit process, auditors found<\/a> in their review of LAHSA\u2019s last fiscal year that ended in June 2025.<\/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 The findings are from the federally-required \u201csingle audit,\u201d a draft of which<\/a> was presented to LAHSA\u2019s audit committee on Monday. It found the inaccuracies stemmed from a “significant deficiency\u201d in LAHSA\u2019s \u201cinternal controls,\u201d which are supposed to safeguard against financial inaccuracies and fraud.<\/p>\n The accounting failures contributed to delays in completing the audit \u2014 which was due to the federal government on March 31 \u2014 according to the draft report. Missing that deadline can put future federal funding at risk. LAHSA officials said at the committee meeting that they hope to submit the final audit report this coming Friday, more than three weeks after the deadline.<\/p>\n At a public meeting Monday, LAHSA CEO Gita O\u2019Neill told LAHSA\u2019s audit committee that her team was working to implement many of the auditors\u2019 recommendations, which she called \u201cgreat suggestions.\u201d<\/p>\n The draft audit report now goes to the LAHSA Commission for approval on Friday. The audit committee was asked to approve it Monday but didn\u2019t have majority support to move forward.<\/p>\n L.A. Mayor Karen Bass, who oversees the agency and is the only elected official on LAHSA\u2019s governing commission, did not respond to a request for comment through a spokesperson.<\/p>\n The backstory<\/p>\n In response to previous audits that found major problems with LAHSA\u2019s oversight of tax dollars, county supervisors decided last spring to withdraw<\/a> all of the county\u2019s $300 million-plus in annual funding of services through LAHSA and instead have the county directly manage it starting on July 1.<\/p>\n Problems identified in the latest audit reiterate why the county pulled its funding, Supervisor Kathryn Barger said in a statement Monday.<\/p>\n \u201cLAHSA\u2019s inaction and inability to meet its audit deadline is inexcusable,\u201d Barger said.<\/p>\n In a statement, Supervisor Lindsey Horvath said the \u201csignificant financial problems\u201d found in the audit give \u201cfurther confirmation\u201d why the county decided to shift its funds out of LAHSA.<\/p>\n \u201cAccountability isn\u2019t optional; it is required to end this emergency. Anything less is unacceptable,\u201d Horvath said.<\/p>\n The city is considering moving in a similar direction as the county. A key City Council panel \u2014 its homelessness committee \u2014 recently recommended<\/a> the full council start shifting city homelessness funding out of LAHSA over the course of the next fiscal year. Bass has urged caution, saying moving too quickly to shift funding could disrupt services for unhoused people.<\/p>\n LAHSA has long functioned as the L.A.\u2019s homeless services department, with over $300 million in city money expected to flow through LAHSA this fiscal year.<\/p>\n As of last summer, LAHSA had $380.5 million in assets and $381 million in liabilities, and received a total of $810 million in operating revenues during the last fiscal year, according to the latest audit<\/a>.<\/p>\n Other problems identified by auditors<\/p>\n During Monday\u2019s discussion, lead auditor Justin Measley said LAHSA did not disclose millions of dollars in payments to a service provider whose executive was married to LAHSA\u2019s CEO at the time, Va Lecia Adams Kellum. The audit is required to list \u201crelated party\u201d transactions, Measley said, which involve an organization with immediate family ties to LAHSA\u2019s leadership. He said auditors only learned about it later through reviewing news media coverage.<\/p>\n \u201cThe article is what triggered us knowing about this specifically,\u201d said Measley, who works for the auditing firm CliftonLarsonAllen.<\/p>\n LAist uncovered documents showing Adams Kellum\u2019s signature was<\/a> on a $2.1 million contract and two other contract amendments with Upward Bound House, the Santa Monica-based nonprofit where her husband Edward Kellum works in senior leadership. The contract named Adams Kellum as the LAHSA official authorized to administer it.<\/p>\n Va Lecia Adams Kellum, former CEO of the Los Angeles Homeless Services Authority, at a news briefing at L.A. City Hall in June 2023. <\/p>\n (<\/p>\n Gary Coronado<\/p>\n \/<\/p>\n Los Angeles Times via Getty Images<\/p>\n )<\/p>\n A LAHSA-commissioned investigation cleared Adams Kellum of wrongdoing in part because \u201cher signature was unintentionally applied by her staff, not by herself,\u201d according to a summary released by LAHSA. LAHSA spokesperson Paul Rubenstein previously told LAist<\/a> that Adams Kellum herself \u201cmistakenly signed\u201d the agreements. LAHSA officials also previously distributed an email<\/a> from Adams Kellum\u2019s official account to a colleague about one of the contracts with her husband\u2019s employer, which stated \u201cPlease delete the document that I signed accidentally.\u201d<\/p>\n Last year, state investigators at the Fair Political Practices Commission launched a conflict of interest investigation into the matter, which is ongoing.<\/p>\n Monday\u2019s audit committee meeting also included discussion of the auditors\u2019 findings that LAHSA is locked into paying $75 million for long-term leases over the coming years that cannot be canceled. Those leases are largely through its master leasing program that started over the last couple of years, which leases 14 apartment buildings, totaling 772 units, to provide housing for unhoused people. LAHSA management says the master leasing program is currently significantly underwater financially.<\/p>\n How to reach me<\/p>\n If you have a tip, you can reach me on Signal. My username is ngerda.47.<\/p>\n A presentation last week by LAHSA management said the master leases are causing an annual budget hit of $10 million to LAHSA, which is prompting the agency to pull from other grants to pay for the leases.<\/p>\n LAHSA\u2019s lease accounting was at the center of a “significant\u201d correction to the agency\u2019s financial statements late in the audit process, the audit states in its findings.<\/p>\n The auditors also found that LAHSA failed to comply with requirements for payroll costs that it charged to the federal government. The agency\u2019s management failed to ensure timesheets for its employees were approved for three of the 40 timesheets the auditors reviewed, despite the law requiring federally-funded salaries to be based on accurate records of work, auditors found.<\/p>\n","protected":false},"excerpt":{"rendered":"Auditors are flagging major problems with the handling of tax dollars by the L.A. Homeless Services Authority. 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