Los Angeles County Supervisor Lindsey P. Horvath on Thursday proposed creating a new county department to consolidate homeless services beginning July 1, 2025, following a scathing report detailing the failings of the current system.
A court-ordered audit of the Los Angeles Homeless Services Authority (LAHSA) released recently uncovered significant financial mismanagement and accountability failures. The 158-page report details billions in poorly tracked taxpayer dollars, with auditors estimating at least $2.3 billion in homeless spending by LAHSA and local governments was inadequately documented. Due to incomplete records, auditors could analyze only one-third of the total budget, suggesting actual mismanagement may be substantially higher.
Auditors reported substantial difficulty tracking payments, services, and outcomes, revealing a complete absence of accountability in the joint city-county agency established to coordinate homeless services across Los Angeles.
The new County proposal would implement recommendations made three years ago by the Blue Ribbon Commission on Homelessness to establish a dedicated county entity for homeless service delivery and streamline the Los Angeles Homeless Services Authority (LAHSA).
"To end the madness of the homelessness crisis in Los Angeles, we must streamline and consolidate our services and resources, and be driven by measurable outcomes," Horvath said in a statement. "This proposal isn't MORE government; it's smarter, more effective government."
The motion, co-sponsored by Supervisor Kathryn Barger, will be heard by the county's Operations Cluster on March 19 before going to the full Board of Supervisors on April 1.
The consolidation comes as Measure A investments replace Measure H, creating what Horvath called "a moment of opportunity to eliminate layers of bureaucracy." The supervisor cited recent audits that underscored "the urgent need for reform and stronger accountability."
The proposal calls for several key actions including:
— Creating the consolidated department by July 1, 2025.
— Merging the county's Housing for Health program with the Homeless Initiative in the Chief Executive Office by April 28, 2025, to serve as the foundation of the new department.
— Transferring LAHSA funding and related staff to the new department by July 1, 2026, while allowing LAHSA to continue administering federally required programs like the Homeless Count.
— Launching a national search for a department director.
— Conducting extensive outreach to inform the department's design and contracting protocols.
County CEO Fesia Davenport, in a February 28 report to the Board of Supervisors, outlined several opportunities associated with creating the new department.
According to Davenport, the consolidation would allow for "more effective braiding and leveraging of different homelessness funding streams" and reduce administrative burdens for service providers through consolidated contracting and standardized systems.
The CEO's report also highlighted potential benefits including earlier intervention for clients, increased county authority over policies and procedures, and improved accountability through centralized reporting of budgets, expenditures, audits and outcomes.
Davenport noted that the new department would be able to leverage experience from the Department of Health Services' Housing for Health program in capturing state and federal revenue, particularly through CalAIM, California's Medicaid reform initiative.
However, the report acknowledged potential challenges during the transition period. These include increased administrative burden, possible service delivery disruptions, difficulties in staff recruitment and retention at LAHSA during the changeover, and costs associated with transitioning LAHSA employees to county positions.
"The County will seek to mitigate these types of potential challenges with comprehensive planning and oversight of the transition and with immediate response if and when unintended outcomes are identified," Davenport wrote.
The motion directs the CEO to work with various county departments, LAHSA, stakeholders and people with lived experience of homelessness to implement steps for establishing the new department.
It also instructs the Department of Human Resources to consult with SEIU 721 on transitioning represented LAHSA workers to the county workforce, addressing concerns about civil service exams and employment requirements.
Additionally, the CEO must establish a process to determine what funding will transfer from other county departments to the new entity and conduct a "full fiscal and budgetary landscape" of existing funding to be transitioned.
Horvath and Barger initially introduced a motion to begin studying this consolidation process on November 26, 2024. The CEO's February report served as the foundation for Horvath's current motion to move forward with implementation.
