By Erica C. Barnett
A forensic audit into the King County Regional Homelessness Authority’s finances found that the agency could not account for $13 million in public funding, according to a statement from Mayor Katie Wilson that also said “all options are on the table” when it comes to the embattled agency’s future. The city “will be pursuing immediate corrective action,” Wilson said.
PubliCola reported on the audit, by the accounting firm Clark Nuber, last week. The investigation, for which Seattle spent more than $600,000, started last August and was extended at the end of the year for additional work. One issue the audit looked into was KCRHA’s routine negative budget balance, which requires the agency to borrow money, at interest, to pay its contractors every year.
King County Executive Girmay Zahilay and Wilson sent a joint letter to Kinnison spelling out steps to establish “clear fiscal controls and accountability for taxpayer funds,” with a deadline of May 23. Zahilay’s office also provided a copy of the audit.
A spokesperson for KCRHA said the agency itself did not have a copy when we contacted them for a statement on Wednesday. They provided a letter KCRHA CEO Kelly Kinnison to the agency’s governing board late this afternoon, which said that Kinnison had requested the audit “to ensure transparency and establish a clear, independent understanding” of what she called “concerns related to our financial systems and reporting during the agency’s early formation.”
The audit covers the period through July 2025.
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In her letter, Kinnison said the audit’s negative findings “are concentrated in KCRHA’s early formation period and reflect structural challenges associated with startup conditions, the pandemic response, an initially fragmented governance framework, and a highly complex funding model. Since that time, we have made meaningful progress. Governance has been restructured, and core operations — including contracts, data systems, and provider coordination — are functioning more effectively. Our financial systems have also improved, though additional strengthening is still needed.”
Two Seattle City Councilmembers, Maritza Rivera and Bob Kettle, condemned the agency’s financial, and Rivera called for the KCRHA’s immediate dissolution.
“The results of the recent King County Regional Homelessness Authority audit are damning,” Kettle said in a statement. “It shows an epic, and consistent, failure of leadership at the top of the agency —especially at its start. It also reveals the failure of leadership of the county and city. The audit reveals troubling systemic issues that can no longer be ignored if we are to address the homelessness and public safety crisis in Seattle effectively.”
Rivera went further. “I am shocked and outraged after seeing the results of the forensic evaluation of the King County Regional Homelessness Authority, which I just received today,” she said in a statement. “It shows an egregious mismanagement of funds and an unacceptable lack of financial accountability.
“KCRHA has a history of dysfunction and inefficiency, and it is time to acknowledge that it has failed in its mission. I am calling for Mayor Wilson to provide a plan for the dismantling of KCRHA as soon as possible, and a commitment to work with City Council to determine how Seattle will move forward in meeting its shelter and housing needs.”
Kinnison’s letter to the board says most of the money that is unaccounted for is made up of “unreconciled receivables”—services that were delivered but “require further reconciliation within the accounting system.” Kinnison also referred to another $6.4 million in “overspend”—money the agency spent, but did not have—saying that this number “reflects budget reclassification and alignment across project program types rather than unapproved or inappropriate spending.” In general, Kinnison told the board, the agency did not lose or misuse funds.
The KCRHA’s governing board will take up the audit findings at its meeting on Friday. This is a developing story and will be updated.
Why does Maritza Rivera think the Mayor of Seattle is in a position to dismantle a KIng County agency, or Authority, or embezzlement party, hwatever tmay be callit
Yes, this is bad, and those responsible for the fraud must be held accountable. But let’s not get it twisted, Rivera and Kettle are acting like localized Trump Republicans by ONLY focusing on auditing human services rather than the lion’s share of the budget that goes to the police and public safety.
At the national level, these Republicans are always searching for “welfare fraud” while winking and nodding at the much greater fraud in defense contracts. At the city level, we must fight back against this right-wing line of attack and audit ALL departments, especially departments that are getting the most city funds like the SPD.
Seattle is NOT a Republican city, so we must resist efforts on the Council to parrot national Republican’s selective fraud investigations that are intended to undermine money going to people in need.