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VOL. 15,
NO. 265
LA County launches financial review of LAHSA for delayed payments to vendors
LAUSD board continues special meeting on superintendent’s future
By City News Service
By City News Service
T
he Los Angeles County Board of Supervisors has launched a review of the Los Angeles Homeless Services Authority’s financial and operational practices, citing concerns of “serious gaps” in oversight and delayed payments to homeless service providers, officials said Thursday. The county sent a letter to LAHSA CEO Gita O’Neill on Wednesday notifying the agency of the evaluation. The review will focus on LAHSA’s ability to process invoices, which has resulted in delays in payments to county- funded service providers, as well as failure to issue scheduled pay advances at the end of January 2026. The review is expected to begin this week and conclude in approximately two weeks, according to the county letter. “Our communities are done with LAHSA’s mismanagement and payment delays. These failures have destabilized providers and eroded public trust -- and they must end,” Supervisor Lindsey Horvath said in a statement. “Taxpayers deserve transparency. Providers deserve to be paid on time. People experiencing homelessness deserve a system that works,” Horvath added. The delays in payment came to light in a heated meeting of the LAHSA Financial Committee last month. LAHSA is expected to disburse nearly $700 million to contractors. Halfway through the fiscal year, the agency still owes 116 service providers for their services. In total, the agency owes at least $69 million in outstanding invoices to contractors. In the letter, LA County Acting CEO Joseph Nicchitta said the review is intended
Gita O’Neill. | Photo courtesy of LAHSA / Facebook
to identify policies and operational processes that LAHSA should implement to ensure payments are made in a timely fashion. O’Neill said the agency takes its responsibility seriously, and is moving “aggressively to get these resources into providers’ hands as quickly as possible.” The agency has acknowledged a backlog in issuing payments caused by a combination of contracting delays, outdated internal policies and the loss of mid-level leaders with institutional knowledge due to funding shifts. In December, the agency implemented a restructuring plan for contracts to prevent a similar avalanche of invoices experienced this year. O’Neill said officials expect to hire consultants to help with payment issues. including modernizing how LAHSA issues and recoups advances, submits cash requests to funders, and checks disbursement and selection procedures.
“We are confident that the Auditor-Controller Office’s review of our aging payables will show the same pain points in our invoice payment processes that LAHSA is already identifying,” O’Neill said in her statement. “We look forward to its insight and assistance as we move forward with planned changes to this process.” Janine Lim, LAHSA’s deputy chief financial officer, explained during Feb. 20’s meeting that for city-funded contracts the agency has yet to receive some of the money to pay service providers. Meanwhile, the agency failed to pay county-funded contracts, in part due to bad timing. Lim said financial department staff are overworked, overwhelmed and have low morale. Amy Perkins, a LAHSA commissioner and member of the finance committee, also criticized LAHSA during the meeting. “This is exactly why we have said for a long time the
structure of LAHSA doesn’t work,” Perkins said. “How are you supposed to administer funding for people who won’t pay you?” Last year, the Board of Supervisors voted to move $300 million away from LAHSA, a process that is expected to begin in July. Those dollars will support the county’s new Homeless Services and Housing Department. Perkins recognized that decision was going to impact the agency’s capability, but she said the county was prepared to offer additional support -- which the agency squandered, she added. “You were offered two dozen staff, well-trained staff, who nevertheless would have to be trained by LAHSA to help you,” Perkins said, noting the agency opted to have those county staffers help with contracts. “You have not requested any additional support or staffing to help you process the checks that are needed to get out as a result of all the contracts being executed,” Perkins added. Lim argued the finance department’s processes are “a lot more complex in nature” compared to the contracting unit. “In my opinion, it was a lot easier to train the staff to execute contracts,” Lim said. Perkins said the issues are impacting service providers, noting she’s received calls from contractors who say they will close if they aren’t paid. “They don’t want to say that publicly because they don’t want to scare their staff, and they will do everything they can not to close,” Perkins said. “They have maxed out their lines of credit. There’s no more rocks to turn over. Vendors are walking off jobs.”
LAUSD Superintendent Alberto Carvalho. | Photo courtesy of Mayor Karen Bass’ office
T
he Los Angeles Unified School District Board of Education was expected to continue meeting Friday to decide the future of Superintendent Alberto Carvalho who is the subject of a federal investigation. The board met for nearly four hours Thursday behind closed doors without making a decision on the fate of Superintendent Alberto Carvalho. As of press time, the board scheduled another special closed-door meeting for 12:30 p.m. Friday to continue deliberating. “The Board of Education has recessed its special closed session meeting and will reconvene tomorrow at 12:30 p.m. to continue its deliberations,” said a statement the board released after Thursday’s meeting. “The district continues normal operations across all schools and offices,” according to a statement from the Board of Education. “We are grateful to our dedicated employees, families, and students for their steady focus and commitment to our school communities.”
See Carvalho Page 27
Thursday’s meeting was scheduled on Wednesday hours after FBI raids on Carvalho’s San Pedro home and his office at the district’s downtown headquarters. The agenda for the meeting included only one item, officially listed as “1. Personnel (Government Code Section 54957), Public Employment, General Superintendent of Schools.” FBI agents served warrants Wednesday morning at Carvalho’s home and office. There was no immediate information on the nature of the investigation, although the Los Angeles Times — citing law enforcement sources — reported it appeared to be tied to a company the district hired in 2024 to develop an AI chatbot, which was never fully implemented. A spokesman for the U.S. Attorney’s Office confirmed to City News Service that law enforcement officials had served “a judicially approved search warrant,” but declined to provide any additional details. The FBI issued a state-