(Image Credit: IMAGN) Keith Glasscock emerges from his tent at a Simi Valley encampment to talk with Jorge Escobar, a Simi Valley code compliance officer, during Ventura County's annual homeless count on Wednesday, Jan. 22, 2025.
Los Angeles, California – A federal judge sharply criticized Los Angeles officials Thursday for failing to properly track billions of dollars in homelessness spending, calling for a forensic audit and warning that he may appoint a court-ordered receiver to take control of the city’s funds.
U.S. District Court Judge David O. Carter convened a hearing in downtown Los Angeles, bringing together key city and county leaders, including Mayor Karen Bass, City Council President Marqueece Harris-Dawson, County Board of Supervisors Chair Kathryn Barger, and City Controller Kenneth Mejia. The focus was on a recent audit that revealed severe deficiencies in tracking over $2 billion in homelessness spending and holding contractors accountable.
“This is a slow train wreck,” Carter told the assembled officials, emphasizing repeated failures in oversight. He singled out the Los Angeles Homeless Services Authority (LAHSA), which has long been a central agency for homelessness services in the city, as a major concern.
According to Carter, multiple audits dating back to 2007 have found that LAHSA consistently failed to account for funds properly. “Nobody is asking our providers what they did or what services they performed,” Carter said, citing the most recent audit, which examined approximately $2.4 billion spent over the past four years, including during the first 18 months of Bass’ administration.
One of the most contentious issues raised was Mayor Bass’ refusal to allow City Controller Mejia to audit her Inside Safe homelessness initiative. The city attorney has argued that the city charter prohibits the controller from auditing programs under the mayor’s office without her consent, a claim disputed by both Mejia and the committee responsible for drafting the charter’s language.
“Folks, you’ve got to solve this, or else the court is going to step in,” Carter warned. If Bass does not voluntarily agree to an independent audit of Inside Safe, Carter said he would consider appointing a receiver to take control of the city’s homelessness spending.
Carter has given city officials until May to decide on key issues, including whether the mayor will allow external audits of Inside Safe. While acknowledging that Bass and other leaders inherited a deeply flawed system, he made it clear that the burden of fixing it now rests on them.
“I am your worst nightmare,” Carter said. “I can make your lives miserable.”
The hearing comes as city and county officials weigh whether to continue funding LAHSA. The County Board of Supervisors is set to vote next Tuesday on whether to cut ties with the agency, and the Los Angeles City Council recently moved to explore the same possibility—something Bass opposes.
Further complicating matters is a recent ethics scandal involving LAHSA’s top executive, Va Lecia Adams Kellum, who approved a $2.1 million contract with her husband’s employer despite prior claims that she had complied with conflict-of-interest rules. Under the contract, LAHSA paid approximately $1.7 million without tracking performance or compliance, raising additional concerns about financial mismanagement.
With billions of dollars at stake and mounting public frustration over the city’s homelessness crisis, Carter’s warning signals that federal oversight could soon become a reality if L.A. officials fail to clean up their financial practices.
