Los Angeles County Scrutinizes LAHSA Finances Amidst Payment Delays
Los Angeles County is launching a formal review of the Los Angeles Homeless Services Authority (LAHSA) following mounting concerns over financial oversight and significant delays in payments to service providers. The evaluation, announced on Thursday, comes as LAHSA navigates a period of transition, including a reduction in county funding and ongoing uncertainty regarding federal support. The move signals growing frustration with the agency’s ability to effectively distribute nearly $700 million in funding intended to address the region’s persistent homelessness crisis.
The County’s review, initiated through a letter to LAHSA CEO Gita O’Neill on Wednesday, will specifically focus on the agency’s invoice processing procedures and the failure to issue scheduled pay advances at the conclude of January 2026. These delays have reportedly destabilized organizations providing critical services to unhoused individuals and families, raising questions about the long-term viability of the county’s homelessness response system. The situation underscores the complexities of managing a vast network of contractors and the challenges inherent in ensuring timely and transparent financial operations.
The scrutiny arrives at a pivotal moment for LAHSA. The agency is currently grappling with a backlog of outstanding invoices, owing at least $69 million to 116 service providers as of halfway through the fiscal year. This financial strain is occurring as the county simultaneously prepares to shift $300 million in funding away from LAHSA, a process slated to begin in July, transferring those resources to a newly established Homeless Services and Housing Department. The transition is intended to streamline services and improve accountability, but the current payment issues threaten to further disrupt the already fragile ecosystem of homeless service providers.
County Officials Express Concerns Over LAHSA’s Management
Supervisor Lindsey Horvath has been particularly vocal in her criticism of LAHSA’s performance. “Our communities are done with LAHSA’s mismanagement and payment delays,” Horvath stated. “These failures have destabilized providers and eroded public trust — and they must end.” Horvath’s statement emphasizes the urgency of addressing the issues and restoring confidence in the agency’s ability to effectively manage public funds. She further asserted that “Taxpayers deserve transparency. Providers deserve to be paid on time. People experiencing homelessness deserve a system that works.”
The concerns were initially brought to light during a heated meeting of the LAHSA Financial Committee last week, prompting the County’s intervention. The review, expected to commence next week and conclude within approximately two weeks, will be conducted by the County’s Auditor-Controller Office. Acting County CEO Joseph Nicchitta, in his letter to O’Neill, outlined the review’s objective: to identify specific policies and operational processes that LAHSA must implement to ensure timely payments to its contractors.
Internal Challenges and Restructuring Efforts at LAHSA
Gita O’Neill, appointed as interim CEO in July 2025, according to LAHSA, has acknowledged the payment backlog and stated the agency is working “aggressively to secure these resources into providers’ hands as quickly as possible.” LAHSA attributes the delays to a confluence of factors, including contracting delays, outdated internal policies, and the loss of experienced staff due to recent funding shifts.
In December, LAHSA implemented a restructuring plan aimed at preventing similar issues in the future. O’Neill has indicated plans to hire consultants to modernize the agency’s financial processes, including improvements to how advances are issued and recouped, cash requests are submitted to funders, and disbursement procedures are checked. “We are confident that the Auditor-Controller Office’s review of our aging payables will show the same pain points in our invoice payment processes that LAHSA is already identifying,” O’Neill stated. “We glance forward to its insight and assistance as we move forward with planned changes to this process.”
However, internal challenges persist. Janine Lim, LAHSA’s deputy chief financial officer, reportedly told the Financial Committee that the agency is facing difficulties in receiving funds for city-funded contracts and that financial department staff are overworked, overwhelmed, and experiencing low morale. These issues suggest deeper systemic problems within the agency that extend beyond simply outdated policies and procedures.
Criticism from Within and the Future of LAHSA
The concerns are not limited to county supervisors. Amy Perkins, a LAHSA commissioner and member of the finance committee, has publicly criticized the agency’s structure, stating, “This is exactly why we have said for a long time the structure of LAHSA doesn’t work.” Perkins questioned how LAHSA can effectively administer funding when it struggles to secure timely payments from funding sources.
The planned transfer of $300 million to the new county department, beginning in July, is a direct response to these long-standing concerns. While the move is intended to improve accountability and efficiency, Perkins noted that the county had previously offered LAHSA additional staff support to address its challenges, an offer the agency reportedly declined. “You have not requested any additional support or staffing to support you process the checks that are needed to get out as a result of all the contracts being executed,” Perkins added, highlighting a perceived lack of proactive problem-solving within the agency.
The Broader Context of Homelessness in Los Angeles
Los Angeles County continues to grapple with one of the largest homeless populations in the United States. The latest estimates, from the 2023 Greater Los Angeles Homeless Count, indicate over 75,500 people experiencing homelessness in the county. LAHSA’s 2023 report details the demographics and geographic distribution of the unhoused population, revealing a complex web of factors contributing to the crisis, including poverty, lack of affordable housing, mental health challenges, and substance leverage disorders.
The effectiveness of LAHSA, and now the evolving structure of homeless services in the county, is therefore critical to addressing this urgent social issue. The current financial turmoil raises serious questions about the agency’s ability to fulfill its mission and deliver vital services to those in need. The outcome of the County’s review will likely have significant implications for the future of homelessness services in Los Angeles, potentially reshaping the landscape of support for vulnerable populations.
Key Takeaways
- Los Angeles County is conducting a review of LAHSA’s financial practices due to significant payment delays to service providers.
- The agency owes at least $69 million to 116 contractors as of halfway through the fiscal year.
- LAHSA attributes the delays to a combination of factors, including outdated policies and staffing shortages.
- The County is shifting $300 million in funding away from LAHSA to a new Homeless Services and Housing Department.
- Internal criticism of LAHSA’s structure and management is mounting.
The County’s review is expected to conclude in approximately two weeks, with findings likely to be presented to the Board of Supervisors shortly thereafter. This will be a crucial moment for LAHSA and the future of homelessness services in Los Angeles County. We will continue to follow this developing story and provide updates as they become available. Share your thoughts and experiences in the comments below.
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