By Jorge Casuso
February 27, 2026 -- LA County on Wednesday informed the Los Angeles Homeless Services Authority (LAHSA) it would conduct an "evaluation and review" of its finances and operations starting next week.
The "formal letter" from LA County's Acting CEO Joseph M. Nicchitta said the County would review "financial and operational processes" that have resulted in "delayed payments to County-funded service providers."
The review -- which is expected to take two weeks -- will also look into LAHSA’s failure "to draw down funds in time to pay scheduled advances to County providers at the end of January 2026."
LA County Supervisor Lindsey P. Horvath, whose district includes Santa Monica, said in a statement Thursday, “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. "Los Angeles County is taking decisive action to address continued negligence at LAHSA.
"Even as we build a new homeless services system rooted in transparency and results, we must also hold the current system accountable."
The review was called for five days after LAHSA's Finance Committee revealed last Friday that the agency can't pay its bills and is refusing help with its day-to-day operations ("Supervisor Sounds Alarm Over LAHSA," February 24, 2026).
The Committee said LAHSA "does not have the staffing or expertise to pay its bills" and has "refused 24 qualified County staff to assist with day-to-day operations," Horvath said.
LA County launched a newly created Department of Homeless Services & Housing (HSH) on January 1 that will assume control of County-funded LAHSA contracts on July 1, said Constance Farrell, the spokepersson for Horvath's office.
Earlier this month, the County Board of Supervisors approved an $843 million spending plan for the new Department's upcoming fiscal year that officials say focuses on housing, outreach and accountability.
Farrell noted that "County funds returning to County oversight doesn’t result in the dissolution of LAHSA. The organization will remain the Continuum of Care for the region."
That means LAHSA will continue conducting the annual Homeless Count and running the winter shelter program, she said, adding that City of LA homeless services contracts "will remain with LAHSA."
Farrell said Horvath "will consider what appropriate actions should be taken as a result of the latest financial review."
The review comes one year after U.S. District Judge David O. Carter ordered an audit that identified approximately $2.3 billion of funding for City of LA homeless programs."
According to the audit report, "LAHSA was unable to identify all relevant service provider contracts and expenses."
"Invoice reviews by the City and LAHSA typically centered on reconciling aggregate amounts in financial reports, rather than verifying the quality, legitimacy, or reasonableness of expenses," the audit found.
The audit by the global consulting firm Alvarez & Marsal echoed similar findings from an audit report by the Los Angeles County Auditor-Controller released in November 2024.
The report, according to the Los Angeles Times, "found lax accounting procedures resulted in the failure to reclaim millions of dollars in cash advances to contractors and to pay other contractors on time, even when funds were available."
Last month, the U.S. Attorney for the Central District of California, which includes LA County, arrested a Westwood man on a federal criminal complaint "charging him with fraudulently obtaining $23 million in public money intended to combat homelessness."
According to the U.S. Justice Department, Alexander Soofer, 42, used the money to "buy a $7 million house in Westwood, $125,000 Range Rover, private school tuition for his children, private jet travel, and stays at luxury resorts."
Of the $23 million, more than $5 million came directly from LAHSA, while more than $17 million came through a downtown Los Angeles-based non-profit called Special Service for Groups Inc.
According to federal prosecutors, Soofer "lied to LAHSA about how he was using the taxpayer money his charity received" and "about payments supposedly being made to third party vendors for homeless housing services."
Soofer "made it falsely appear he was leasing properties for homeless housing from third-party landlords at a market rate, when he was instead paying himself above market rate and again misappropriating money that could have been used to help alleviate the homeless housing crisis," prosecutors said.
"To cover up the fraud, Soofer fabricated fake and misleading invoices -- at times stealing the names, addresses, and logos of real companies -- to make it appear that the vendor and rent payments were legitimate.
"When a LAHSA investigator asked Soofer if his charity’s board knew how he was spending money, he said they did, but the investigator later learned that the board was fake," the U.S. District Attorney's office said.
In a statement issued announcing Soofer's arrest, First Assistant U.S. Attorney Bill Essayli called California "the poster child of rampant fraud, waste, and abuse of tax dollars."
“The state has facilitated the spending of billions of dollars to combat homelessness, with little to show for it and almost no oversight," Essayli said.
"Thankfully, the federal government has begun auditing California’s spending and today’s is just one example of how fraudsters have swindled millions of dollars from taxpayers.
"This money should have gone to those in need, instead it lines the pockets of individuals subsidizing their lavish lifestyle,” Essayli said.
Funding for homeless services in LA County comes from Measure A, a half-cent sales tax approved by County voters in November 2024 that generates about $1 billion a year to help address the region's homelessness crisis.
The measure repealed the ¼ cent sales tax under Measure H that was approved by voters in 2017 and expires in 2027 and replaced it with a ½ cent sales tax that raised LA County's tax rate to 10.50 percent, one of the highest in the nation.