The Los Angeles Homeless Services Authority (LAHSA) has failed to complete any internal audits for several years, leaving critical financial gaps unexamined. Most notably, a report regarding $7 million in unspent federal grants remains unfinished due to management's refusal to provide timely responses.
The Two-Year Wait for a $7 Million Federal Audit
The Los Angeles Homeless Services Authority is currently stalling a draft report concerning the failure to utilize $7 million in federal grant money intended for housing and support services. According to the report, this specific audit was initiated two years ago, yet it remains in draft form because management has failed to respond to inquiries for over two months. Erum Shahnawaz, the chief internal auditor for the Los Angeles Homeless Services Authority, confirmed that the draft is only about six pages long, yet the missing management response remains the sole barrier to its final publication.
This administrative bottleneck suggests a deeper culture of avoidance within the organization. While the financial sum of $7 million is significant, the fact that a six-page document has remained in limbo for two years points to a breakdown in basic operational communication between the audit team and executive leadership.
Justin Szlasa and the 8-Week Industry Standard
Commissioner Justin Szlasa, who chairs the audit committee, has characterized the current state of oversight at the Los Angeles Homeless Services Authority as "nuts." Szlasa pointed out that the industry standard for completing internal audits is typically eight or nine weeks from start to finish, a timeline that stands in stark contrast to the two-year delay currently seen with the federal underspend audit.
Beyond the delays in communication, Szlasa reported that auditors have faced significant hurdles in accessing internal databases containing payment and contract records. This lack of transparency persists despite official policies that are supposed to guarantee auditors full and unrestricted access to all organizational records and systems at the Los Angeles Homeless Services Authority.
Mayor Karen Bass's Absence from Audit Committee Meetings
The governance of the Los Angeles Homeless Services Authority is split evenly between appointments by Mayor Karen Bass and five county supervisors. however, records indicate a lack of engagement from the city's top executive;Mayor Karen Bass was absent from every single audit committee meeting during her tenure on the committee last fall.
This lack of leadership at the committee level coincides with internal confusion regarding accountability. Janine Lim, the deputy chief financial officer of the Los Angeles Homeless Services Authority, attributed the delayed audit responses to a lack of clearly defined roles , meaning no specific individual was tasked with coordinating the replies to the audit team.
Shrinking the Audit Team from Three Staffers to One
While oversight needs are growing, the Los Angeles Homeless Services Authority is actively reducing its capacity to monitor spending. The proposed budget for the agency includes a downsizing of the internal audit team from three staffers to just one. This reduction comes as Paul Rubenstein, chief of staff to then-CEO Gita O'Neil, described the recent period as some of the most stress-filled in the agency's history due to mass layoffs.
As reported, these internal failures are part of a broader pattern of mismanagement. External audits previously revealed that the Los Angeles Homeless Services Authority neglected to properly track billions of dollars in spending, a failure so severe that Los Angeles County supervisors eventually withdrew funding and placed the agency under direct county oversight.
Who is Responsible for Coordinating LAHSA's Audit Replies?
A critical question remains regarding who exactly within the Los Angeles Homeless Services Authority is responsible for the current silence.. While Janine Lim cited undefined roles, the report does not specify which executives were directly tasked with the $7 million federal grant responses.. Furthermore, it remains unclear if the agency will implement the alternative suggested by Justin Szlasa—publishing draft reports with a note that management responses are pending—or if Erum Shahnawaz will be forced to issue the report unilaterally.
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