Shelter Contractor Fraud and Misallocation of Funds in Homeless Services

How Financial Mismanagement Exacerbates the Homeless Epidemic in Los Angeles and Beyond

Considering that financial mismanagement and shelter contract fraud are nothing new, it’s probably not surprising that Los Angeles and other major cities in California have seen the absolute worst of it.

When we think about the worst homeless epidemic in the United States, you’ll likely immediately think of Los Angeles. With the cost of housing rising across the state and wages not meeting those demands, more and more residents are finding themselves in the pits of homelessness.

What’s worse? The state of California is so incredibly ill-equipped to respond to its homeless crisis. Between lack of shelter beds, lack of affordable housing, financial mismanagement, and shelter contract fraud, it’s difficult to see an end to this.

While this is the case for many major cities in the U.S. – New York City, I’m looking at you – for right now, I want to focus on all the different factors contributing to this kind of systemic failure of homeless services in California.

Lack of Transparency at LAHSA

Since the beginning of this year, the non-profit CalMatters has been trying to obtain incident reports that track major events such as deaths, disease, abuse, and overdoses at publicly funded shelters in Los Angeles. The Los Angeles Homeless Services Authority (LAHSA) has met this effort with much resistance. LAHSA has claimed that these reports fall under “attorney-client privilege” and are, therefore, exempt from public records law.

However, when CalMatters and its attorneys repeatedly asked for evidence of reports being communicated to attorneys, LAHSA could not provide any. LAHSA then attempted to justify its claim by citing a 1995 court ruling in the City of Hemet v. The Supreme Court. That ruling stated that police records could be kept secret to protect the privacy of police officers; however, LAHSA doesn’t employ police officers.

The Los Angeles Homeless Services Authority has managed to evade releasing this information for over eight months, going to great lengths to conceal these events from the public eye and other members of the community who serve and advocate for homeless people in Los Angeles.

How can we serve and advocate for homeless people if we don’t know what’s going on in these shelters?

Where else could we obtain this information? As it stands, LAHSA refuses to release incident reports, and the state of California cannot provide adequate reports either.

While the state has spent $24 billion to address its homeless crisis over the last five years, it has failed to track most of the results. In fact, the state does not maintain a central list of homeless shelters, nor does it regularly track major concerns such as deaths, violence, or abuse. It leaves all of this up to local homeless agencies and LAHSA.

Homeless advocates continue to ask for more accountability, but both LAHSA and the state of California have evaded these requests over and over again.

Shelter Fraud Investigations and Misuse of Funds

The Controller’s Office recently launched a shelter fraud investigation where a shelter was being paid $110 per person per day to feed its homeless residents, only to feed them primarily instant noodles.

In San Francisco, an audit found that HomeRise, the city’s largest private organization that operates a massive chunk of the city’s homeless services infrastructure, spent millions of taxpayer dollars on large bonuses and extravagant social events instead of on homeless residents.

Misallocation of Taxpayer Dollars

How is it possible that shelter contractors, LAHSA, and even the state of California can get away with something like this? I want to remind our readers that your tax dollars fund this. Wouldn’t you at least want it to fund what it was intended to fund?

Fancy parties for employees were not on the list. Violence and abuse toward homeless people were also not on that list.

Unfortunately, corruption in homeless services, especially regarding financial mismanagement, is not unique to California.

I saw it, too, with my own eyes, in New York City. I have personal ties to this story. I’ve also been on the receiving end of corrupt shelter contractors and financial mismanagement. I saw my taxpayer dollars flushed down the toilet when I suddenly became a homeless college student six years ago. I stayed in a shelter with a history of violence and abuse operated by a corrupt shelter contractor , Aguila, Inc., that had been operating in the city for over a decade.

New York City paid Aguila $7,000 per resident per month to shelter homeless New Yorkers like me. This shelter was infested with rats and poorly managed, with moldy shower curtains and clogged toilets. There wasn’t even any food on site, and the case management was hardly case management.

A financial audit found that the New York City’s Department of Homeless Services (DHS) should recoup $913,949 in improper payments, investigate an additional $9.1 million in unsupported payments, as well as another $10.3 million in contracts for shelters and social services operated by Aguila.

Furthermore, the audit found that DHS failed to review and approve the facility leases and security contracts, monitor their operational performance, client safety, sanitary conditions, and ensure that clients were transitioned to permanent housing promptly.

Systemic Issues in Homeless Services

There are striking similarities between the discrepancies we see conducted by the Los Angeles Homeless Services Authority (LAHSA) and New York City’s Department of Homeless Services (DHS) and the contractors that manage their shelters. We can see that across the board, we have rampant mismanagement of city and government funding and a lack of adequate reporting.

This is not only a matter of exploitation of taxpayer dollars but of homeless people as well. Both greed, as well as a lack of support for homeless people and services, make way for realities such as these. Considering that both California and New York have the largest homeless populations in the United States, we must hold these states accountable for mismanagement of homeless services and funding. We must also ensure other states don’t continue on this trend of corruption and exploitation.

The post Shelter Contractor Fraud and Misallocation of Funds in Homeless Services appeared first on Invisible People .