LOS ANGELES (CNS) – Days after announcing a review of the Los Angeles Homeless Services Authority’s financial and operational practices due to what the county called “serious gaps” in oversight, the Board of Supervisors Tuesday will consider a motion calling on the county to directly oversee payment of funds to contracted service providers.
According to the motion by Supervisor Lindsey Horvath, there are “significant balances of county funding still to be processed by LAHSA and distributed to providers contracted to perform county-funded programming through June 30, 2026.”
The motion would direct county administrators to “develop and directly oversee” a plan to pay homeless-services providers until all county funds have been paid to the contracted agencies.
The county has already created its own Department of Homeless Services and Housing, pulling much of the funding it previously provided to LAHSA. Beginning with the 2026-27 fiscal year, the county will directly contract with service providers — rather than going through LAHSA — for most programs, although it will continue to provide some limited funds to LAHSA.
The county last week sent a letter to LAHSA CEO Gita O’Neill notifying the agency of the evaluation of the organization’s financial and operational processes. The review will focus on LAHSA’s ability to process invoices, which county officials say has resulted in delays in payments to county-funded service providers, as well as failure to issue scheduled pay advances at the end of January 2026.
“Our communities are done with LAHSA’s mismanagement and payment delays. These failures have destabilized providers and eroded public trust — and they must end,” Horvath said in a statement last week. “Taxpayers deserve transparency. Providers deserve to be paid on time. People experiencing homelessness deserve a system that works.”
The delays in payment came to light during a recent heated meeting of the LAHSA Financial Committee last week.
LAHSA is expected to disburse nearly $700 million to contractors. Halfway through the fiscal year, the agency still owes 116 service providers for their services. In total, the agency owes at least $69 million in outstanding invoices to contractors, according to the county.
In the letter, LA County Acting CEO Joseph Nicchitta said the review is intended to identify policies and operational processes that LAHSA should implement to ensure payments are made in a timely fashion.
O’Neill said the agency takes its responsibility seriously, and is moving “aggressively to get these resources into providers’ hands as quickly as possible.”
The agency has acknowledged a backlog in issuing payments caused by a combination of contracting delays, outdated internal policies and the loss of mid-level leaders with institutional knowledge due to funding shifts.
In December, the agency implemented a restructuring plan for contracts to prevent a similar avalanche of invoices experienced this year. O’Neill said officials expect to hire consultants to help with payment issues. including modernizing how LAHSA issues and recoups advances, submits cash requests to funders, and checks disbursement and selection procedures.
“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 said in her statement. “We look forward to its insight and assistance as we move forward with planned changes to this process.”
Janine Lim, LAHSA’s deputy chief financial officer, explained during the recent finance committee meeting that for city-funded contracts the agency has yet to receive some of the money to pay service providers. Meanwhile, the agency failed to pay county-funded contracts, in part due to bad timing.
Lim said financial department staff are overworked, overwhelmed and have low morale.
Amy Perkins, a LAHSA commissioner and member of the finance committee, also criticized LAHSA during the meeting.
“This is exactly why we have said for a long time the structure of LAHSA doesn’t work,” Perkins said. “How are you supposed to administer funding for people who won’t pay you?”
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