By Erica C. Barnett
Mayor Katie Wilson and King County Executive Girmay Zahilay both announced that they plan to “embed an independent financial analyst” in the agency, as a statement from Wilson put it yesterday.
According to Zahilay’s announcement, “This analyst will provide more transparency into financial practices, improve payment processes, and ensure corrective actions are being implemented with urgency.” Wilson’s announcement referred to the analyst (or analysts) as “a financial services team” that will “shore up financial and internal controls at KCRHA.”
The decision came after a flurry of discussions late last week about how to respond to the KCRHA’s “corrective action plan,” which laid out a series of steps to respond to a damning audit that found the agency lacked basic financial controls, overspent its administrative budget, and could not account for $8 million in spending. The audit also found that KCRHA had a consistent and growing negative budget balance—around $45 million when the audit concluded, an amount that had increased to $65 million by the time the auditors presented their results.
The announcement represented a slowdown of what had been growing momentum to “wind down” the agency quickly and send the contracts it manages back to the city and county agencies that used to oversee them. It was also a reversal of a plan set in motion last week.
As recently as last Friday, Wilson and Zahilay were planning to announce on Monday that they were taking back the homelessness contracts and distributing them to the city’s Human Services Department and King County’s Department of Community and Human Services, according to accounts from people familiar with the discussions. (Zahilay, rather than Wilson, was reportedly leading the charge to pull the plug). Homeless advocates, city council members, and some members of the business and philanthropic community reportedly urged caution, and cooler heads apparently prevailed.
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Under the scenario the city and county were contemplating last week, the KCRHA would continue to exist—at least temporarily—as a shell of itself, serving as the region’s Continuum of Care for federal funding purposes and administering the Point In Time Count of the region’s homeless population.
This may still happen; the decision to fund an accounting team to address the problems identified in the audit does not preclude shutting down the agency. But as of now, that will no longer happen on an accelerated timeline.
As we reported last week, KCRHA CEO Kelly Kinnison and Associate Deputy for Strategy William Towey have asked for $500,000 to hire a fnancial consultant—as Kinnison put it, a “CFO-type role”— through the staffing firm Robert Half, which charges hefty recruitment fees on top of their temporary staffers’ salaries. The KCRHA laid off its most recent chief financial office last October and never replaced him.
A spokesperson for Zahilay’s office said the county does not know yet how much the consultant will cost or how the city and county will split the spending.
Wilson’s office did not respond to questions.
It’s important to note this in Zahilay’s statement: “more transparency”, “corrective actions”. For people who want KCRHA wound down immediately, this may seem a detour into same-old same-old. But if there’s someone inside the agency who’s paid by someone else, not the agency, that’s an opportunity for detailed knowledge of what went wrong, and even for amassing evidence for possible prosecution. It’s not a guarantee that the agency will continue.