US Attorney's Office for LA: Los Angeles homeless funds appear to be $2 billion short

LOS ANGELES COUNTY, CA- This right here is why we need DOGE. The U.S. Attorney for Los Angeles announced last week that he is investigating the apparent disappearance of nearly $2 billion in homeless funds, Moneywise reports. 

“Taxpayers deserve answers for where and how their hard-earned money has been spent. If state and local officials cannot provide proper oversight and accountability, we will do it for them,” U.S. Attorney for LA Bill Essayli said in a statement. 

Ciaran McEvoy, the office spokesperson, told CBS News that one audit showed $2 billion is “unaccounted for.” McEvoy was asked if there was fraud or corruption involved in the apparent missing funds, to which she responded, “All we can say is we’re going to go where the evidence takes us.” 

Recent audits have revealed reckless spending and a lack of transparency at the LA Homeless Services Authority (LAHSA), which oversees shelters for homeless residents. 

Early last month, the LA County Board of Supervisors decided to claw back $300 million in funding from LAHSA  and redirect the funds to the county’s newly minted homeless services department. That vote occurred the same day LA County increased its sales tax by $.025/cents to provide additional funding for the homeless.

LA council member Monida Rodriguez believes an investigation into missing or misappropriated funds is prudent. She said, “I think there have been some very clear failures." 

The newly formed Homelessness Fraud and Corruption Task Force will not focus on one agency; however, as the investigation progresses, that may change. 

LA County desperately needs whatever funding it can get, particularly in downtown LA, where hundreds of homeless people live in makeshift shelters in the so-called “Skid Row” neighborhood. Moreover, additional homeless encampments have spread into the suburbs, primarily under freeway overpasses. 

California is ground zero for the homeless population in the U.S., accounting for nearly a quarter of the homeless population in the entire country. 

California Gov. Gavin Newsom, who fancies himself a someday presidential candidate, announced plans to distribute $920 billion in funding to cities statewide to address the crisis. With that said, he also asked local governments to step up their game while threatening to pull funds designed to assist in homeless initiatives if cities didn’t step up. 

“We want to see results. We have to address unsheltered homelessness, encampments, and tents,” Newsom said. As of 2024, California had over 187,000 homeless people. 

LA Mayor Karen Bass, when she wasn’t touring countries in Africa, proposed a program in 2022 called “Inside Safe,” which provides taxpayer-funded motel rooms for homeless persons who leave encampments. The program, however, is extremely costly, and it is unclear what direction it will take. According to Moneywise, “homeless individuals who are housed in motels live in limbo until permanent housing becomes available to them.” 

Several agencies have recommended various solutions to the problem, but the crackdown may impede those efforts. 

For example, the United Way of Greater Los Angeles has suggested expanding housing subsidy programs and vouchers to provide more financial support to homeless individuals seeking housing. They have also indicated that job training programs and child care initiatives are essential components to prevent homelessness by making it easier for county residents to earn a living. 

Some work has already been undertaken to address the homeless crisis in LA. The Homeless Initiative of LA County said that since June 2017, over 125,000 homeless people have been placed in permanent housing, while an additional 43,000 people were prevented from becoming homeless. 

Reactions to Essayli’s task force have been mixed, with Bass saying she doesn’t want the effort to diminish LA’s efforts to combat the scourge of homelessness. 

“I’m not opposed to the task force, but I don’t want it to be a fishing expedition,” Bass said. “I don’t want it to be a distraction that takes us away from what our primary mission is.” 

Conversely, LA County Supervisor Kathryn Barger supports creation of the task force, calling it “long overdue.” 

“I believe this task force will add a much-needed layer of oversight that will help restore public trust and ensure resources actually reach those in need,” she said in a statement.