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iAUDIT! - Over the past few weeks, we’ve read a lot about various reports, studies, and pending audits of homelessness programs in Los Angeles. It seems the City, County, and LAHSA are spending a lot of time reviewing each other’s programs, and recently a federal judge ordered an audit of the City’s homelessness efforts. A brief recap of current or pending reviews includes:
- LAHSA’s report on the City’s anti-camping ordinance, LAMC 41.18
- The Board of Supervisors ordered two audits of LAHSA: one for its procurement and implementation of its new homeless counting software and one for its financial operations
- City Controller Kenneth Mejia announced plans for a “focused audit” of LAHSA
- A federal judge ordered an independent audit of Inside Safe as part of an ongoing court settlement case with the L.A. Alliance for Human Rights.
- The L.A. City Council voted to conduct a performance evaluation of homelessness services it receives from LAHSA.
What do all these audits and studies really mean, and will any of them lead to meaningful change or improvements in homelessness programs? To answer that, we need to understand what the terms “report,”, “study”, and “audit” really mean. Study and report are pretty much synonymous, but my personal definition is that a report usually focuses on the status of an existing program, while a study is a more generalized overview of a given subject. When the Mayor’s office issues the latest update on Inside Safe, that’s a report. Studies can be a bit more rigorous than reports because they often identify or create criteria for success or efficacy, and then measure an existing or proposed program against those criteria. A study could be a survey on the effectiveness of anti-camping ordinances in several cities.
True audits are the most rigorous of the three types of reviews. Anyone with the proper analytic skills can do a report or study, but real audits require specialized skills and training. Audits are governed by a set of standards; in the public sector, auditors usually follow the U.S. Government Accountability Office’s Government Audit Standards, also known as the Yellow Book. The Yellow Book establishes requirements for auditor training and ethics, as well as procedural standards for financial and performance audits. Audit shops certified as Yellow Book compliant undergo biennial peer review, and certified auditors must pass a grueling three-part test and take at least 20 hours of continuing education every year, including two hours of ethics training. Specifically, performance audits focus on outcomes—the results a program produces.
Among the differences between reports, studies, and audits is the issue of bias. A report or study can be written from a certain point of view, or with the intent of supporting a given policy. An audit is—or should be—free from bias and considers only empirical evidence. Using the recent news as an example, based on the summary released by LAist, LAHSA’s review of LAMC 41.18 is a report. It reviewed an existing policy, (L.A.’s anti-camping ordinance), and reported on its status in terms of keeping encampments clear of tents or vehicles. It cannot be considered an audit because, if we believe criticism from L.A.’s Council members and comments from the Chief Legislative Analyst, the report omitted or misinterpreted crucial data on results. The report’s scope also appears to have been ill-defined, since it critiqued 41.18 in terms of its effects on housing people moved from encampments, which is neither the ordinance’s intent nor its expected outcome. The content and tone of the report suggests it was intended to be a targeted criticism of 41.18, rather than an objective study. It certainly can’t be considered an audit.
Of the five pending reviews, four show some potential for real change, depending on how they are structured. The County’s two audits of LAHSA may finally bring some accountability to two of the Authority’s most critical functions: the annual survey of homelessness and its management of a huge budget. I and many other writers have described the failings of both these subjects, so there is no need to review the details. It should be enough to say, after multiple years of inaccurate counts, LAHSA needs to substantially improve its PIT count process. And, despite sending hundreds of millions of dollars to a plethora of nonprofits, it still has few, if any, effective measures to gauge their performance.
If the County Auditor is assigned to the PIT count and financial evaluations, we may see substantive and comprehensive reviews of both subjects. The County runs a GAO-compliant audit function, and its previous evaluations of LAHSA have been objective and unsparing. Likewise, the independent audit of Inside Safe ordered by federal judge David Carter should thoroughly examine the program’s true outcomes, including how it defines someone as “permanently housed”. There are several professional firms capable of conducting a comprehensive audit.
Details on the City Council’s proposed evaluation are sparse, but it, too, has the potential to shine some light on how LAHSA spends hundreds of millions of dollars on service providers, and what benefits the City receives.
That leaves us with the last item, City Controller Kenneth Mejia’s announcement that he intends to conduct a “focused audit” of Inside Safe. He made the announcement after City CAO Matt Szabo testified in Judge Carter’s courtroom that Mejia has no authority to audit a program run by the Mayor’s Office. Based on some news stories, Judge Carter seemed disinterested in having Mejia’s office perform the audit. In auditing standards, there is no such thing as a “focused” audit—all audits by their nature should have a clear focus.
We should remember Mr. Mejia’s immediate reaction to LAHSA’s 41.18 report was to join other “progressive” officials in labeling the ordinance as “criminalizing homelessness”. His constant and well-publicized statements opposing any limitations on urban camping, and his consistent support of Housing First is a clear bias. His office’s December 2023 audit of LAHSA’s shelter utilization system was quite critical of the Authority’s inability to track bed use, but its recommendations primarily called for more collaboration between the City and LAHSA with few time-sensitive goals, and no recommendation to the Council for possible punitive action should LAHSA continue to underperform. Unlike Mejia, his predecessor as Controller Ron Galperin, consistently called for reforms at LAHSA. Mejia’s Director of Homelessness Accountability and Oversight, Ashley Bennett, is a well-known homeless advocate who confronted LAPD officers and LSAN employees trying to clear a huge and dangerous encampment in Echo Park before she became a senior manager in Mejia’s office.
While everyone has personal and political biases, government audit standards require mitigating rules to prevent biases from affecting audit findings. One of the most important elements for preventing bias is the tone at the top. Leaders must clearly state bias has no place in the audit profession. Mejia has done the opposite, creating a structural bias by making it clear his political agenda takes precedence over actual performance. Staff auditors would be hesitant to produce any finding that opposes his views. Any “audit” from Mejia on homelessness programs would be of questionable value.
Discounting Mejia’s effort, there are still four possibilities of strong, unbiased audits: two from the County, one ordered by the court, and the evaluation authorized by the City Council. What can we expect if any of these audits find deficiencies in the programs they review? The answer for the court’s audit is pretty straightforward; the judge can order the audit’s recommendations to be implemented within a given timeframe, and he can impose sanctions if they are not. The outcome of the County and City audits may be less clear. Assuming the County Auditor makes recommendations, it is up to the Board of Supervisors to act. Auditors have no authority to implement the changes they recommend. Four of the five Supervisors have shown no desire to confront the County’s, nor LAHSA’s failures. The City Council’s response is unknown as well, with strident pro-Housing First advocates like Raman, Hernandez, Yaroslavsky, and Soto Martinez who are willing to overlook any material deficiencies for the sake of their political agendas. However, we should remember it was the BOS and Council who asked for the audits, even if it was to save face in light of recent stories about the PIT count and other negative news. If the deficiencies are egregious enough, it will be very difficult for the Board and Council to ignore or rationalize them.
Properly scoped, thorough, and comprehensive audits may take months and, per standards, LAHSA and Inside Safe managers must be given an opportunity to respond to the recommendations before they are made public. However, given elected leaders’ lack of political and moral will to make changes, the upcoming audits may the public’s best chance to get the true story about the results of the billions of taxpayer money spent and years of effort, and if these programs have truly had an effect on homelessness.
(Tim Campbell is a resident of Westchester who spent a career in the public service and managed a municipal performance audit program. He focuses on outcomes instead of process.)
