Hollywood, California February 22, 2024-Jovette Cutaiar, left, gets help with a grocery cart after doing laundry at a homeless encampment under the 101 freeway on Cahuenga Blvd. in Hollywood. (Wally Skalij/Los Angeles Times)

(Wally Skalij/Los Angeles Times)

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

homelessness programs

ordered by a federal judge.

But the commitment fell short of the $2.8 million to $4.2 million

proposed by the firm

U.S. District Judge David O. Carter

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

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,

whether it could complete the scope of work

the city's

"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,

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

reached settlements providing for thousands of new

and

mental health and substance use treatment

.

The demand for an audit arose in February, when the L.A. Alliance

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

homeless people

he said the law firm representing the alliance should receive compensation.

In

closed session Friday, the

ouncil agreed to pay

$725,000.

Carter accepted that figure but had repeatedly made clear that the fees weren't the element of the sanctions

that mattered to him most.

Saying he wanted more transparency about money spent on homelessness, Carter focused

on the L.A. Alliance

demand for an audit.

At his insistence, attorneys for the city and the alliance selected several outside auditing firms to

for the job.

Three firms

to the court Thursday. One said it could

the audit for $320,000 but did not convince

the parties that it could

do the job.

came in at $1.1 million. An attorney

Scott Marcus, said Friday that he initially found that firm capable of the job but had since received

information,

Matthew Umhofer,

representing the L.A. Alliance,

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

until Monday to confer with the firm.