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A federal judge orders a sweeping outside audit of L.A. homelessness programs

Los Angeles, CA - March 20: Migrant Nubia Reyes son Mateo, 3 sleeps in a Skid Row tent on Wednesday, March 20, 2024 in Los Angeles, CA. (Brian van der Brug / Los Angeles Times)
A child sleeps in a Skid Row encampment in Los Angeles, where "each and every homelessness assistance program and initiative" funded or run by the city faces scrutiny in a federally ordered audit. (Brian van der Brug / Los Angeles Times)

A federal judge on Friday ordered a comprehensive independent audit of all homelessness programs funded or run by the city of Los Angeles.

The ruling by U.S. District Judge David O. Carter set a broad scope for the audit, going beyond the parameters he had initially indicated he wanted.

The audit, which city officials agreed to in principle earlier this month, is part of a settlement with the LA Alliance for Human Rights, a group of business owners and residents that had sued the city and county, alleging they had failed in their duty to address homelessness.

Carter's order calls for "complete and thorough transparency for each and every homelessness assistance program and initiative funded or conducted by the City of Los Angeles."

That would include not just a review of the city's shelter programs as agreed to in the settlement, but Mayor Karen Bass' Inside Safe program, the city's controversial anti-camping law and the street cleanups by the Sanitation Bureau's CARE+ teams.

The broad reach of the audit arose during several days of negotiations among the city, the LA Alliance and other community groups seeking to intervene in the case.

The agreement lists 31 subjects the audit should cover. Among them are how effective city funds are in reducing homelessness, how service providers demonstrate success, and how the city and the Los Angeles Homeless Services Authority avoid double-counting people who receive housing and services.

During prior hearings, Carter had extracted an agreement from the city to pay for an outside audit. Lawyers for the city and the LA Alliance told Carter on Monday that they had a general agreement on the audit's scope but still had to work out definitions of some terms. The judge gave them until Thursday to comply.

The seven-page document they submitted Thursday outlines a sweeping audit program.

It requires "complete and accurate information relating to City expenditures and the uses of public funds, including City, County, State, and Federal funds intended to assist people experiencing homelessness." This would include funds from the joint city-county Los Angeles Homeless Services Authority.

The scope of work would include an analysis of whether those programs increase or reduce the stability of homeless people and whether they assist or hinder them in receiving proper care, such as behavioral healthcare, treatment beds and treatment for substance use.

The parties to the lawsuit agreed to seek three outside auditor candidates to make presentations to the court at the next hearing in the case, set for April 4.

At Monday's hearing, Carter also received a commitment from Mayor Bass, who was in the courtroom, that all invoices for homeless services, including supporting documentation, would be posted on a public website.

He insisted the documents be shared, saying, "the best auditor will be the public."

Asserting that "there was absolutely no accounting and no transparency for at least $600 million" the city spent in one period, Carter asked why there couldn't be an agreement that "all invoices have to have supporting documentation concerning what was performed," adding, "Why are we waiting for an audit to do that?"

Bass said the city could do that within the two weeks the judge requested.

L.A. Homeless Services Authority Chief Executive Va Lecia Adams Kellum, who phoned into the court Monday at Carter's request, committed to providing such documentation so the city can make it public.

"Absolutely," Adams Kellum said. "One hundred percent committed to doing that."

Carter elaborated Friday on his demand for documentation. He said he wants to change what he sees as a culture of paying invoices that lack written explanations of what they're for and what was accomplished, on the assumption the work was done.

"If our providers in the field don't have the underlying documentation, the presumption is the opposite — that they didn't do the work," the judge said.

A key point of contention in negotiations over the audit's scope was what city programs would be included.

On Monday, Shayla Myers, the attorney representing two groups that have intervened in the lawsuit, argued that the audit should cover the city's enforcement of Municipal Ordinance 41.18, which prohibits camping near such places as schools and day-care centers or in specific areas designated by City Council resolution.

The Los Angeles Community Action Network, one of the intervening groups, and other homeless advocates contend that the law is purely for the purpose of cleansing certain areas of homeless people.

In contrast to Inside Safe, which focuses on getting people to voluntarily enter shelters, the anti-camping law merely pushes people from one place to another, making it more difficult for outreach workers to help them, the advocates contend.

Carter had said earlier that he was not inclined to include Ordinance 41.18 because he saw it primarily as a "policy decision by the city."

But Myers pushed successfully to have the scope cover "each and every homelessness assistance program and initiative funded or conducted by the City of Los Angeles," including the anti-camping ordinance.

Carter accepted the principle without comment on Friday, and commended all of the parties involved.

The issue of an audit arose after the LA Alliance filed a motion last month asking Carter to fine the city $6.4 million, alleging it was dragging its feet on a requirement that it set goals and milestones for reducing homeless encampments. The city approved a timetable for those milestones in January, nearly a year after it was initially due.

The judge agreed that the city had violated its commitment under the city's April 2022 settlement agreement, but said he was concerned that the amount requested would be "taking money from the homeless when we need that money on the front side."

Instead, he said, he thought that Umhofer, Mitchell & King, the law firm that brought the case, should be compensated with an amount yet to be determined.

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This story originally appeared in Los Angeles Times.