LOS ANGELES (CNS) - Amid growing concerns over transparency and homelessness spending, the Los Angeles City Council Wednesday authorized the formation of a new bureau to ensure taxpayer funds are resulting in the appropriate outcomes.

Council members voted 13-0 to instruct departments to report within 30 days on the resources needed to establish the bureau and identify potential funding sources. Council members John Lee and Monica Rodriguez were absent during the vote.

Councilwoman Nithya Raman, chair of the council's Housing and Homelessness Committee, introduced the motion on Feb. 26. alongside her colleagues Bob Blumenfield and Katy Yaroslavsk

"We spend a lot of money on our homelessness response primarily on outreach, shelter beds and long-term housing that includes permanent supportive housing that we're building, as well as rental subsidies," Raman said. "Homelessness response is complicated."

The city works with several agencies on the crisis -- the Housing Authority of the City of Los Angeles (HACLA), Los Angeles Housing Department (LAHD), LA Sanitation and Environment, the Los Angeles Homeless Services Authority (LAHSA) and multiple L.A. County departments.

City officials authorize funding to LAHSA, a city-county homeless service agency, which then subcontracts with service providers.

"No one in City Hall is tasked with knowing, for example, how often encampments are being visited by outreach workers, how many shelter beds are filled on any given night, how many vacancies we have across our PSH units, and how long those vacancies take to get filled," Raman said.

Raman described the future bureau as a "lightweight and fiscally responsible" response to this gap. The bureau will be created within the Housing Department, which handles contracts with LAHSA.

"Our work that has already been happening on this (issue) -- thanks to funding from philanthropy -- has actually yielded results," Raman said. "Just from collecting this data and looking at outcomes, we have been able to increase the number of units that are being filled monthly in our city-funded PSH units from 74 per month to over 250 per month, and we are reducing vacancies so that we're at over 90% occupancy."

She noted these changes came after a few months of work. Raman added, "Imagine if we enshrine this in our city, held someone accountable for it, and made sure that were monitoring those dollars regularly."

Councilman Blumenfield agreed with Raman, noting that the city should consolidate "all the things that we're doing on homelessness."

The bureau is expected to include temporary members from LAHSA, the Mayor's Office, LAHD, the city administrative office and HACLA -- ideally with employees involved in oversight, contracts and project management to the city's stock of housing programs for people experiencing homelessness.

In March, a court ordered audit found that L.A. homelessness programs were hampered by poor oversight resulting in an inability to track substantial funds allocated to the city's assistance services. Auditors with the firm Alvarez & Marsal identified $2.3 billion of funding, including appropriations, commitments or spending related to city programs, according to the assessment released by U.S. District Judge David Carter.

Further, auditors said, the city and the Los Angeles Homeless Services Authority "did not initially provide all requested financial data, prompting A&M to make multiple efforts to identify, trace and reconcile relevant data as it was produced to A&M."

A&M said it relied on the financial data produced by the city and LAHSA, as A&M did not have direct access to the financial information systems used by the city. As a result, because the city and LAHSA were unable to identify and calculate relevant expenses for all city programs, auditors were unable to quantify the total amount of money spent to establish beds and provide associated homeless supportive services, the report stated.

In addition, limited financial oversight and performance monitoring of homeless programs resulted in oversight that frequently missed verifying the quality, legitimacy or reasonableness of expenses, A&M determined.

Also, contracts between the city, LAHSA and service providers "frequently contained broad terms without clear definitions, which created ambiguity about the scope and type of service delivered," A&M found.

In response to financial management concerns with LAHSA, the L.A. County Board of Supervisors approved a motion to explore the creation of a county department to centralize homeless services.

A separate audit conducted by the county Auditor-Controller Department found LAHSA failed to recoup cash advances provided to subcontractors, failed to establish repayment schedules for subcontractors, lacked adequate records for tracking cash advances awarded to other agencies and failed to adequately monitor contracts with recipient agencies and document whether subcontractors who received funds actually met the terms of their contracts.

In its response to the county's audit, LAHSA CEO Va Lecia Adams Kellum contended that several issues identified were "in whole or in part attributable to LAHSA's fiscal practices during the COVID-19 years. ... Therefore, these actions should be considered within a broader context of the public health emergency, rather than being assessed solely through the conventional accounting framework."

She also noted that the period of time examined in the audit -- fiscal year 2016-17 through 2023-24 -- "captured a time of rapid growth and expansion for LAHSA, both in its organizational size, scope and nature of its functions."

Kellum said that during that time, the agency evolved from a conventional "pass-through grant and contract administrator into a systems administrator with significant programmatic and direct services roles."

She also wrote that the agency underwent a "complete agency-wide reorientation" between 2019 and 2022 to focus on public health responses due to the pandemic.

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