The Los Angeles Homeless Services Authority moves hundreds of millions of dollars a year to fight the region's homelessness crisis. According to its own officials, it has not completed a single internal audit in a couple of years, LAist reports.

What an internal audit is, and why this matters

An internal audit is the mechanism by which an organization checks itself: whether money went where it was supposed to, whether controls are working, whether funds are being left on the table. It is unglamorous and it is the spine of financial accountability. For an agency spending public money at LAHSA's scale, it is not optional.

The comparison in the reporting is stark. Los Angeles County's auditors issued roughly 100 reports in a recent year. LAHSA, per its audit committee chair, has completed none in about two.

The audit that will not close

The specific example is telling. An internal audit examining $7 million in unspent federal funds was started two years ago. It is still not finished, and the reason is not that the work is hard. It is that LAHSA management has not provided the responses the auditors requested more than two months ago.

"We haven't gotten anything," the agency's chief internal auditor, Erum Shahnawaz, told LAist. "That's the only thing that's holding us from issuing the final report."

The audit committee chair, Justin Szlasa, put the timeline against the norm: an internal audit should run about eight to nine weeks start to finish. This one has run two years. "It shouldn't take us two months to receive a management response," he said, and, more bluntly, "We haven't had a single internal audit completed here in the last couple of years, which is nuts."

Management's explanation

LAHSA leadership offered two accounts, and fairness requires giving both.

The deputy chief financial officer, Janine Lim, said management had not responded because the agency "did not have clearly defined roles for who is supposed to coordinate responses to internal audits." That is an admission of a process gap rather than a defense.

Paul Rubenstein, chief of staff to the CEO, pointed to circumstances: "probably some of the most stress-filled two months that we've had at LAHSA," citing mass layoffs. That is a real pressure and worth acknowledging. It is also, arguably, exactly the environment in which financial oversight matters most.

The detail that should not be skipped

As all of this unfolds, LAHSA is reducing its internal audit team from three staff to one.

Cutting audit capacity while a two-year-old audit sits unfinished, at an agency that has not closed one in years, is the kind of decision that invites the question of whether oversight is a priority or an obstacle. The Herald is not answering that question for the reader; it is putting the fact on the record.

The stakes, plainly

This is not an abstract governance story. LAHSA is the joint city-county authority at the center of how Los Angeles spends its homelessness money, and public confidence in that spending is already thin. A 2022 external audit found the agency had left $3.5 million in federal grants unused. Now an internal audit into $7 million more in unspent federal funds cannot be finished because the agency will not answer it.

Money that is not spent is help that did not reach anyone, and an oversight system that cannot complete its own reviews cannot tell the public where the money went. Those two facts, together, are why this matters more than a bureaucratic delay. The Herald will report whether the $7 million audit is ever completed, and what it finds.