L.A.\u2019s homeless services agency has not completed any internal audits in years \u2014 and one that was started two years ago is still incomplete because management is taking months to provide responses, officials said Monday.<\/p>\n
The delayed audit has been looking into why the L.A. Homeless Services Authority, known as LAHSA, failed to spend $7 million in federal dollars it was granted to house and serve people in need. The roughly six-page audit report hasn\u2019t been released because it\u2019s missing LAHSA management responses that were requested over two months ago, officials said.<\/p>\n
Internal audits are considered<\/a> critically important<\/a> to protecting taxpayer dollars at every level of government. L.A. County auditors, for example, issued about 100 reports<\/a> in a recent fiscal year.<\/p>\n \u201c\u200aWe haven\u2019t gotten anything,\u201d said Erum Shahnawaz, LAHSA\u2019s chief internal auditor, referring to the lack of response from LAHSA management at a meeting of the agency\u2019s audit committee on Monday.<\/p>\n \u201cThat\u2019s the only thing that’s holding us from issuing the final report,\u201d Shahnawaz said of the underspending audit.<\/p>\n That audit is examining a repeat problem. A previous, external audit in January 2022<\/a> found LAHSA had left $3.5 million in federal grants on the table by not using them.<\/p>\n Shahnawaz flagged management\u2019s delays to the LAHSA Commissioner Justin Szlasa, Szlasa said. He chairs the commission\u2019s audit committee, and has repeatedly called out LAHSA executives\u2019 delays in providing information about taxpayer spending over the past year.<\/p>\n \u201c\u200aI’ve been trying to intervene and use whatever I can to try to help provide support,\u201d said Szlasa as he described his attempts to get the auditor the answers needed to complete the report. <\/p>\n Szlasa was appointed to the commission by L.A. County Supervisor Kathryn Barger.<\/p>\n \u200a\u201cIt shouldn’t take us two months to receive a\u2026management response to an internal audit,\u201d Szlasa said at Monday\u2019s meeting. He said the industry standard for internal audits is eight or nine weeks from start to finish. That compares to the two years \u2014 and counting \u2014 for LAHSA\u2019s federal underspend audit.<\/p>\n \u201cWe haven’t had a single internal audit completed here in the last couple of years, which is nuts,\u201d Szlasa added. He called for internal audits to happen much more frequently.<\/p>\n Long delays to LAHSA audits also are not new. In November 2024, the county issued a widely-seen audit<\/a> that included findings that LAHSA was failing to complete internal audits.<\/p>\n Half of LAHSA\u2019s governing commission is appointed by L.A. Mayor Karen Bass and half appointed by each of the five county supervisors. Bass is also the only elected official on the commission. She served on the audit committee for several months last fall. Records show she was absent for all of the meetings during that time.<\/p>\n Janine Lim, LAHSA\u2019s deputy chief financial officer, said management\u2019s responses to the audit on underspending haven\u2019t been provided yet because LAHSA leadership did not have clearly defined roles for who is supposed to coordinate responses to internal audits.<\/p>\n \u201c\u200aWe need to work on clarifying that role internally,\u201d Lim said.<\/p>\n \u200a\u201cThe last two months have been probably some of the most stress-filled two months that we’ve had at LAHSA,\u201d said Paul Rubenstein, chief of staff to LAHSA CEO Gita O\u2019Neil, pointing to mass layoffs.<\/p>\n Szlasa said there\u2019s not that much in the audit for management to respond to.<\/p>\n \u201cIt’s like, six pages or less,\u201d he said.<\/p>\n Szlasa said \u200aanother option is to \u201cjust say we’ve asked management for responses and we’re awaiting management response. We can publish the results.\u201d<\/p>\n In response, Shahnawaz said that if management doesn’t have an updated timeline for a response, then she\u2019ll go ahead and issue the report without the response.<\/p>\n Once they floated that idea, Lim committed to providing the responses by next Tuesday.<\/p>\n LAHSA\u2019s leadership has downsized the internal audit team \u2014 dropping from a staff of three to just one in the agency\u2019s proposed budget up for approval Friday.<\/p>\n Delays in getting access to financial records<\/p>\n The delayed responses from management are not the only thing that\u2019s been slowing down audits, Szlasa said at the meeting.<\/p>\n LAHSA policy, approved by its governing commission, says internal auditors are \u201c\u200aauthorized to access all organizational records, personnel, and systems necessary for conducting audits,\u201d he said.<\/p>\n But the auditor has faced challenges in actually getting that access, Szlasa said \u2014 including delays in being allowed to view LAHSA\u2019s databases that show contracts and financial payments.<\/p>\n \u200a\u201dWe finally were granted access, but it wasn’t, it wasn’t easy, it wasn’t immediate. It was slow,\u201d Szlasa said.<\/p>\n Many failed outside audits<\/p>\n The delays on the internal audit come even after LAHSA failed multiple external audits in recent years, which have found the agency \u2014 overseen by city and county elected officials \u2014 has neglected to properly track billions of dollars in spending.<\/p>\n Largely in response to earlier audits, L.A. County supervisors pulled funding from LAHSA and are having the county instead oversee it directly. L.A.\u2019s mayor and City Council have continued to have LAHSA manage the city\u2019s homeless spending while the council delays plans to start studying a possible plan<\/a> to transition away city tax dollars.<\/p>\n Signatures under scrutiny<\/p>\n LAHSA is also in the midst of a different internal audit \u2014 expected to finish in late August or early September \u2014 examining whether top officials followed requirements when signing contracts and letting others sign. It was launched in the wake of LAist reporting that found<\/a> LAHSA\u2019s then-CEO Va Lecia Adams Kellum\u2019s signature finalized a $2.1 million contract with her husband\u2019s employer.<\/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