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Homeless service providers who owe millions in cash advances to county revealed, after pressure from judge
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Homeless service providers who owe millions in cash advances to county revealed, after pressure from judge

A federal judge on Thursday asked for the names of several Los Angeles-area service providers who received more than $48 million in advances from the region’s main homeless agency, but who have not yet reimbursed them.

Unpaid debt revealed during a recent audit of the Los Angeles Homeless Services Authority, which manages funding for nearly 100 providers in the City and County of Los Angeles. The taxpayer funds in question were distributed in 2017.

“I want these talented providers on the record,” U.S. District Judge David O. Carter said during a hearing in downtown Los Angeles. “This court will not forgive and forget this.”

Earlier in the hearing day, he asked who these “pretty special people” were and continued to ask that question throughout the hearing.

County officials finally provided the names Thursday afternoon, after a midday break.

Service providers who received cash advances

Once the dozens of service providers were identified, Carter went through them line by line, dollar by dollar.

Since July 2024, they include:

  • People Assisting the Homeless (PATH) – over $8.2 million owed, just over $40,000 recovered.
  • Special Services For Groups, Inc. – over $5.8 million owed, less than $815,000 recovered.
  • Los Angeles Volunteers of America – over $4.9 million owed, just over $135,000 collected.
  • St. Joseph Center — more than $2.8 million owed, approximately $120,000 collected.
  • Lamp Community, Inc. – over $2.4 million owed, approximately $26,000 recovered.
A table showing the names of suppliers, the amounts advanced to them and how much they still owe

A list of providers who received advances.

(

Makenna Sievertson/LAist

)

Thursday’s hearing came after a scathing audit released Tuesday evening by the Los Angeles County Auditor’s Office found that LAHSA’s contracts with various contractors did not establish appropriate standards or measure outcomes, leading to inconsistent and poor care.

“I’m beginning to believe, and I hope I’m wrong, that this is just the tip of the iceberg,” Carter said in court, adding that he analyzed the results “all night.”

The Los Angeles County Board of Supervisors is now consider a proposal to defund the troubled agency. A vote is scheduled for Tuesday.

Audit costs scrutinized

Carter originally scheduled the hearing so he could ask the city, county and LAHSA to “justify their delays and non-payment” of unpaid fees during an independent audit he is overseeing.

The investigation, led by the firm Alvarez & Marsal, was launched to obtain more information about where and how the money was spent. It is linked to a regulation reached nearly two years ago in a long-running lawsuit between advocates for unhoused people and the city and county of Los Angeles.

The city of Los Angeles initially agreed to pay Alvarez & Marsal $2.2 million.

But because of delays in delivering LAHSA’s data, the bill rose by just over $1 million, and officials are wondering whether they should pay the extra money.

The majority of the money is intended to fund the audit of services provided by the county, according to court documents.

That leaves $440,000 to pay, and Los Angeles lawyers interviewed whether the additional money was needed and should be paid by the city.

Carter said yes. He said he was “stunned” by the audit budget the board approved in the first place, adding that it was “likely to be inadequate.” The company’s initial price range was between $2.8 million and $4.2 million.

He asked the city’s lawyers if this was an attempt by the council to “underfund” the audit so that it was incomplete, which they denied.

Carter then repeatedly pressed for a guarantee that the $440,000 would be put to a vote by the city council. The judge said he would be happy to hear from Los Angeles Mayor Karen Bass or city administrative officer Matt Szabo.

“This audit is not going to be shortchanged by a few hundred thousand dollars by a city council,” he said during the hearing. “I will not allow this audit to be inadequate.”

Later in the afternoon, Valerie Flores, chief deputy city attorney, confirmed that the $440,000 payment would be submitted to the city council the week of December 2.

The first version of the audit is now expected by the end of February, according to Alvarez & Marsal.