L.A. agrees to pay up to $2.2 million for outside audit of homelessness programs
Doug Smith April 6, 2024
The Los Angeles City Council agreed Friday to pay up to $2.2 million for an outside audit of
the city’s
homelessness programs
that was
ordered by a federal judge.
But the commitment fell short of the $2.8 million to $4.2 million
range
proposed by the firm
selected by
U.S. District Judge David O. Carter
selected to conduct the audit to conduct the audit.
The council did not explain its rationale for setting the lower amount.
After initially indicating in a hearing Friday afternoon that he would accept the offer, Carter recalled the city’s attorneys as they
headed for the
courtroom door and warned them that he was not satisfied.
“I can’t have a substandard audit,” he said. “It can’t be $100,000 short or even a million short.”
Carter said he wanted to hear from the auditing firm, Alvarez & Marsal,
as to
whether it could complete the scope of work
on
the city’s
set budget.
“The council does not control the amount,” he said. “If that audit falls short, we are back in litigation.”
The audit has become the latest snag in a 2020 lawsuit filed by a group called the L.A. Alliance for Human Rights,
which alleged
that the city and county were failing in their duty to provide shelter and services for people living on the streets.
Both the city and county have
since
reached settlements providing for thousands of new
shelter beds
and
for shelter,
mental health and substance use treatment
beds
.
The demand for an audit arose in February, when the L.A. Alliance
a group
representing business owners, residents and property owners filed a motion asking Carter to sanction the city $6.4 million for missing deadlines.
In prior hearings, Carter said he was not inclined to order sanctions because the money would be better spent
helping
homeless people
though
he said the law firm representing the alliance should receive compensation.
In
a
closed session Friday, the
L.A. City C
ouncil agreed to pay
Umhofer, Mitchell & King LLP
$725,000.
Carter accepted that figure but had repeatedly made clear that the fees weren’t the element of the sanctions
request
that mattered to him most.
Saying he wanted more transparency about money spent on homelessness, Carter focused
instead
on the L.A. Alliance
s
demand for an audit.
At his insistence, attorneys for the city and the alliance selected several outside auditing firms to
bid
for the job.
Three firms
presented their proposals
to the court Thursday. One said it could
conduct
the audit for $320,000 but did not convince
any of
the parties that it could
adequately
do the job.
Another firm’s bid
came in at $1.1 million. An attorney
representing the city,
Scott Marcus, said Friday that he initially found that firm capable of the job but had since received
disqualifying
information,
though he did not elaborate.
Matthew Umhofer,
an attorney
representing the L.A. Alliance,
said the remaining firm, Alvarez & Marsal,
was the only one acceptable to his clients.
During its closed session Friday, the council agreed that it would pay between $1.5 million and $2.2 million for the audit.
Carter said he too preferred
Alvarez & Marsal and continued Friday’s hearing
until Monday to confer with the firm.
