By Erica C. Barnett
On this week’s 🚨emergency episode🚨 of Seattle Nice, we discussed a damning new forensic report into the King County Regional Homelessness Authority’s finances, which revealed that the agency could not account for millions of dollars in public funds.
As I reported earlier today, the audit revealed that the KCRHA couldn’t account for $8 million; it also revealed an “administrative overspend” of more than $4 million, on top of a previously reported programmatic overspend of more than $6 million. Beyond the missing money, the repord raises serious concerns about the KCRHA’s accounting practices and use of restricted funds, some of which may have been used for unauthorized purposes.
We discussed what Sandeep described as the “overlapping failures” early in the agency’s history, when the founding CEO, Marc Dones, established a culture in which lived experience of homelessness took primacy over traditional government qualifications, a practice that pushed many of the people who had been managing homelessness contracts at the city of Seattle out and set the agency on a path of lackadaisical record-keeping, few formal financial controls, and accounting practices that included reconciling funds over chat, email, and constant revisions to Excel spreadsheets, rather than traditional government accounting practices.
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A number of elected officials at the city and county have already called for the dissolution of the KCRHA, expressing outrage at the audit findings. That process, if it happens, will be long and arduous, and could spell the end of the much-touted “regional approach to homelessness,” which was the ostensible reason the KCRHA was created in the first place.
But as we also discussed, the city and county—the KCRHA’s two primary funders—also bear some responsibility for letting the agency’s finances and accounting get so out of hand and allowing their bank accounts to fall so far into the red. The KCRHA has long served as a bit of a punching bag for its primary funders, but it was it set up to struggle from the very start, when the city and county signed an agreement creating the agency that did not give KCRHA its own funding source, making it basically a pass-through agency that was occasionally allowed to do side missions—like the ill-fated “Partnership for Zero,” which was supposedly going to end unsheltered homelessness downtown.
The KCRHA’s board will meet at 3:00 on Friday, when it will hear from both agency CEO Kelly Kinnison and Clark Nuber, the agency hired by the city and county to do the forensic report. The public can tune in to the meeting on Zoom.
The forensic audit covered 2021–25. During that period, the annual KCHRA budget averaged over $200 million per year. I am not excusing KCHRA for bad accounting—1.6% of the budget unaccounted for is bad—but the $13 million needs to be understood in the context of a total budget during that period of over $800 million.
Here’s my idea; KCRHA should just be an administrative department, joint between the city and the county. They don’t get to have a vision, or a mission or a mandate. They just manage the contracts, and deconflict activities funded by the city and county and federal HUD. The responsibility for the programs, the decisions about what gets funded and by how much, lie with the Mayor of Seattle, the City Council, the county Executive and the County Council (and the CoC Board, who has formal responsibility for the HUD funding). They need to work together and decide how they will address the homelessness crisis. KCRHA should be staffed with government professionals who are good at accounting and managing contracts, reporting, and carrying out the tasks given to them. Good bureaucrats, nothing more, nothing less.
I think this is a good idea. However, the state or feds should do an investigative/forensic audit since this was just basically a forensic analysis, which was technically at the surface level. I honestly would like to know how the money was spent. If LIHI an DESC were recipients of the funds, then KCRHA should’ve appropriately documented that for accounting purposes.