A forensic audit finds widespread problems at the homelessness agency, county workers rally against in-office mandates, and a ton of other stories you may have missed this week.
The Seattle Police Department put out a video congratulating officer Albert Khandzhayan for apprehending a man who had kidnapped his wife’s three children by breaking the window of her car, dragging her out, and driving off with the kids inside. The video includes disturbing audio from the woman’s panicked 911 call; when we contacted SPD, they expressed “regret” for posting the audio without asking the victim’s permission.
Update: After we posted about the video, SPD removed it from Youtube and their website, replacing it with a note said in part: “Recognizing the potential harm this post may have caused, we have removed the video originally posted here.”
King County Assessor John Arthur Wilson posted multiple photos of himself in a tub, shirtless, on Instagram and Facebook Stories, with captions flaunting the fact that a judge ruled he did not have to wear a previously ordered ankle monitor because of a medical condition he claimed requires him to soak both legs every day. His next hearing is May 5, when PubliCola hears he may be asked to address the flippant posts.
On our first of two Seattle Nice episodes this week, we interviewed land use and housing consultant Natalie Quick and the city’s former chief operating officer Marco Lowe about why developers are asking holiday from Mandatory Housing Affordability fees, which pay for affordable housing but are bringing in less money as housing development slows.
Members of the PROTEC17 union, including King County employees, protested King County Executive Girmay Zahilay’s three-day-a-week return to office (RTO) mandate, which county employees have called punitive, expensive, and counterproductive. Many of the county’s far-flung workers have never been to physical offices, so “return to office” is a misnomer.
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The Seattle Times failed to credit PubliCola’s original reporting on County Assessor Wilson’s disappearing social media posts, instead representing the find as their original reporting. This is not in keeping with bare-minimum standards for crediting other news sources when doing followup coverage of a story another media outlet broke.
A devastating forensic audit found multiple serious issues with the way the regional homelessness authority ran its finances, including casual accounting practices, commingling of restricted funds, consistent negative balances, and millions of dollars in overspending and money that the agency was unable to account for. The audit led local officials to issue statements calling for accountability and, in some cases, the immediate dissolution of the agency.
Mayor Katie Wilson announced a two-phase plan to add a dedicated bus lane along the most congested part of Denny Way, between Lower Queen Anne and Capitol Hill, and create a new pathway to the South I-5 on-ramp. The two-phase plan will fulfill a campaign promise to address chronic delays on the bus route known derisively as the “L8.”
In our second podcast this week, we discussed the implications of the KCRHA audit for the future of the long-embattled agency. The audit, I argued, is most concerning for what it reveals about the agency’s lax financial controls and casual accounting practices, which included allowing the same person to oversee expenditures from approval to validation that the expense was appropriate and calculated and logged correctly.
I previewed the KCRHA board meeting to discuss the audit, including the agency’s own preemptive efforts to suggest things were well under control.
Also this week: On Friday, I covered the KCRHA board meeting in detail, including CEO Kelly Kinnison’s insistence that the audit didn’t find fraud and that no money went “missing.” In a presentation, the auditor corrected those claims and added texture to some of the dry details in the audit, including the KCRHA’s extensive use of a private temp staffing agency that charged large commissions and the widespread use of credit cards without clear authorization or line-item receipts.
Coming up: On Monday, I’ll be on City Cast Seattle discussing the audit findings and what they mean for the future of the agency. Tune in!
The King County Regional Homelessness Authority’s governing board, made up of elected officials from around the region, will meet today for a briefing and discussion on a damning forensic evaluation into the agency’s finances. The audit found potential misuse and commingling of restricted funds, spending that could not be accounted for, casual accounting practices, and lack of oversight and internal controls to protect against waste, abuse, and fraud.
The report covered a period ending in July 2025, when the agency’s cash balance was negative by $44.7 million. A few months after the audit began, agency CEO Kelly Kinnison laid off 13 staff, including the general counsel and chief financial officer. Neither position has been filled. At the same time, Kinnison hired five new staff, including three top executives, offsetting some of the savings from axing the agency’s attorney and the executive overseeing its finances.
Elected officials issued a flurry of statements ranging from alarm to calls for the KCRHA’s dissolution on Wednesday. Four Seattle-area leaders who expressed grave concerns—King County Executive Girmay Zahilay, Seattle Mayor Katie Wilson, and Seattle City Councilmembers Alexis Mercedes Rinck and Dionne Foster—are on the governing board.
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In advance of today’s meeting, KCRHA’s Associate Director of Strategy, William Towey—who was among the new executives Kinnison hired last October—sent an email to KCRHA staff assuring them that the agency has “made meaningful progress [to] bring transparency to where we needed to improve and to help guide the work ahead.”
“Core operations are stronger, invoicing is now completed on time with significantly improved accuracy, we have implemented regular monthly financial close processes, and we have strengthened oversight of spending, including purchase cards”—spending by individual staffers that was done with little accountability or oversight, the audit found. “At the same time, the audit makes clear that more work is required, and we are already taking action to address those areas.”
Towey’s letter to staff emphasized that, “[i]mportantly, the audit did not find evidence of fraud or misuse of funds.” However, the audit explicitly says that the failure to find “large-scale fraud in the samples reviewed” does not mean a clear bill of health; “due to limitations in internal controls, the risk of fraud, waste, and abuse remains,” the audit notes.
Towey told KCRHA staff Kinnison herself requested the audit, a claim that sources inside the city as well as former KCRHA staff have disputed, saying that Kinnison’s former deputy, Simon Foster, requested it after discussions with the Seattle Human Services Department. (Foster was among the 13 laid-off staff.)
In a formal complaint last August, then-CFO James Rouse (one of the 13 staff let go last October) said Kinnison had not initiated the review and seemed unaccountably dismissive about the implications of a forensic audit, which is typically done when there’s a suspicion of wrongdoing, such as fraud.
Ordinarily, an agency under audit would have the opportunity to respond in writing to the audit and have the response released as part of the audit itself, but that didn’t happen in this case. Kinnison is expected to respond to the audit findings verbally at the KCRHA’s board meeting this afternoon.
One question that’s unlikely to come up at the meeting is what responsibility the elected officials on the board, as well as the KCRHA’s two main funders, the city and King County, had for ensuring its spending was in order and its accounting practices met basic standards. In 2024, the city and county gave the governing board more authority, but the officials on the board never took a particularly active role in questioning or overseeing the agency or its budget. Instead, the board generally rubber-stamped the budget after viewing a PowerPoint presentation, effectively ceding authority to the CEO and staff to hold themselves accountable.
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.
A forensic evaluation 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. (The report is not a formal audit, but we’ll be using that term colloquially, with the recognition that it was officially an evaluation.)
In addition to the money that went missing—which includes $8 million the agency couldn’t account for, an administrative overspend of more than $4 million, and a previously reported programmatic overspend of more than $6 million—the report raises serious concerns about the KCRHA’s accounting practices and use of restricted funds, some of which may have been used for unauthorized purposes.
The report found, for example, that KCRHA used a single fund as a repository for earmarked money from various sources, then spent money from that fund to temporarily pay for other things, reimbursing the fund once the money came in for the contractor that received the original loan. A hypothetical example of this would be receiving federal dollars to pay for emergency shelter, using that money to pay for a homelessness diversion program while waiting for money to come in for that contract from the city, then putting the “loaned” federal money back in the pot so it goes to its original purpose.
“We were unable to determine to what extent restricted funds, intended for specific purposes, were used to temporarily cover unrelated costs,” the auditors wrote, “because the accounting records… obscured end-to-end traceability.” In general, they wrote, “we were unable to clearly determine if funds had been commingled or used for purposes other than intended due to traceability issues and use of large, complex reallocations.”
“Without clear tracking of funds, the organization could not easily demonstrate that cash was consistently used for its intended purpose. This increased the risk of potential noncompliance with Funder and contract requirements.”
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. This balance, Clark Nuber found, went up and down throughout the year, including at times when the city had just loaned the KCRHA money to pay its bills. At times, the difference between what the agency owed and its cash on hand was close to $80 million.
The problem was caused, in part, by the fact that KCRHA often spent money it didn’t have yet, reconciling its accounts after the fact. The agency’s accounting staff also frequently submitted invoices that had significant errors; correcting those errors meant the agency went longer without getting paid, and relied heavily on borrowed money to pay providers.
“We would have expected that advance funds would have supported ongoing positive cash flow,” the auditors wrote. “However, we also noted that expenditures often occurred well before receipt of advances and were retroactively applied, meaning that expenditures were made before actual advance cash was available.”
“Erroneous invoices were rejected by [the city and county] and sent back to KCRHA for correction. Depending on the issue, the correction process was lengthy and administratively burdensome,” the auditors found. Twenty-five of the 29 sample invoices Clark Nuber inspected included errors, and all failed to include a mandatory authorization form.
According to the audit, had no consistent accounting system and routinely made errors that prevented payments from going out. In a departure from best practices, the agency didn’t reconcile its accounts at the end of each month, and did not use a single accounting system to track corrections, changes, and amendments to accounts.
Instead, the $200 million agency relied on “institutional knowledge,” “manual workarounds,” and “informal processes,” such as emails and “thousands” of edits to widely accessible Excel spreadsheet, to “complete core cash-related processes, including bank reconciliations.” In many cases, the same person was able to enter, revise, and delete individual transactions with no clear oversight.
“Cash position awareness appeared to rely primarily on informal reporting, manual tracking, and point‑in‑time statements provided after the fact by the County, rather than on forward-looking, system‑driven reporting,” the audit found.
“Issues and reconciling items were frequently resolved through informal channels such as chat messages rather than through retained workpapers or system documentation,” the audit found. “Nor did there appear to be standard internal controls to ensure there was no fraud, waste, or abuse.” In one example the audit found, the same person was responsible for entering information about cash flows and certifying that the information was correct.
The audit also found potential issues with prepaid gift cards given out to participants in the agency’s biannual Point In Time count, which relies on volunteer recruitment rather than a physical count of homeless individuals, and the use of purchase (credit) cards by staff. Typically, the report notes, these cards are only used for small, “incidental” spending, but KCRHA staff charged more than $1 million over the approximately four-year audit period, including for office furniture and clothing, raising questions about whether the cards were used properly. The $1.1 million included about $360,000 in expenditures for an ill-fated hotel program run by the Lived Experience Coalition, which PubliCola covered extensively in 2023.
In a sample of 14 “high-dollar” purchases, Clark Nuber found that every purchase raised concerns, including purchases by someone other than the cardholder, missing receipts, and approvals by people who were not authorized to approve such expenses.
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, and directing KCRHA to “act swiftly to address identified challenges” from the report.” The letter says the KCRHA needs to take specific steps such as separating accounting duties so that the same person isn’t overseeing expenditures and compliance checks; setting strict rules for employee reimbursements and gift cards; and provide a written correction plan for the issues raised in the report.
Late Wednesday afternoon, Kinnison sent a letter 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.” (Multiple sources familiar with how the audit came about disputed this characterization).
The audit covers the period through July 2025.
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Shortly after this post originally ran, King County Executive Girmay Zahilay’s office released the audit along with a joint letter from Zahilay and Wilson saying the two executives “expect KCRHA to act swiftly to address identified challenges” from the report, with a response
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.”
The report noted that although many of the issues arose under earlier CEOs, including controversial founding CEO Marc Dones, many of the problems have not been corrected since current CEO Kelly Kinnison was hired in August 2024. “Weaknesses remain in the current state, including issues related to process workflows, accounting methodology and reporting transparency, invoicing and receivables management, budgeting management, reliable supporting documentation, governance and oversight, and effectiveness of internal controls,” the report found.
The auditors also noted that Kinnison “was absent from most ongoing bi-weekly project update meetings” about the audit, forcing the auditors to work with lower-level managers to answer questions and address issues.
Two Seattle City Councilmembers, Maritza Rivera and Bob Kettle, condemned the agency’s financial failures, and both Rivera and King County Councilmember Rod Dembowski called for the KCRHA’s 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.”
Later on Wednesday evening, City Councilmembers Alexis Mercedes Rinck and Dionne Foster sent a more measured joint statement, saying the audit findings are “serious, unacceptable and demand immediate action and accountability.”
Asked about the possible dissolution of the KCRHA on Wednesday night, Rinck said, “I think we can do regionalism without having a whole separate agency” overseeing homelessness contracts. The process of setting up a regional entity has shown that Seattle, King County, and other cities can coordinate and talk to each other about their differing needs without having what amounts to a separate pass-through agency handling all the region’s spending, she said.
Under the interlocal agreement that established the authority, the city and county must take at least one year to dissolve the agency if they decide to dismantle it rather than try to reform and save it. The KCRHA, city, and county would spend much of that time transferring the contracts KCRHA manages back to the city’s Human Services Department and the county’s Department of Community and Human Services.
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.” 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.
On the podcast this week, we talked about Mayor Wilson’s plan to build 500 new tiny house village-style shelter units by this summer; stalking charges against King County Assessor John Arthur Wilson; and the latest library levy, which will dwarf the most recent such levy at nearly half a billion dollars.
County assessor Wilson, whose term ends this year, failed to show up to a court hearing where he planned to argue that he couldn’t wear a court-ordered ankle monitor because of a medical condition. His lawyer cited scheduling confusion as the reason for his absence from the virtual hearing.
The Burien City Council, which has a new progressive majority, placed controversial city manager Adolfo Bailon on administrative leave this week. Bailon recently fired Burien’s city attorney, who was reportedly helping the city council figure out the process for ushering Bailon out the door.
Mayor Wilson announced the dates for Seattle’s annual “Bicycle Weekends” event, in which the city opens up Lake Washington Boulevard in Seward Park to cyclists and pedestrians during summer weekends. Unlike her predecessor, who killed longstanding plans to install stop signs and speed humps on the dangerous lakefront boulevard, Wilson is expanding the safe-street program to include every summer weekend (except Seafair) and three holidays.
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King County Assessor John Arthur Wilson, who was arrested and charged with stalking after he showed up repeatedly at his former fiancée’s house in violation of a no-contact order, will not have to wear an ankle monitor, a Seattle Municipal Court judge ruled, due to a medical condition that Wilson said requires him to soak his legs nightly. The monitor would have alerted Keller if Wilson violated the order by coming within 1,000 feet of her.
The City Council approved two pieces of legislation to advance Mayor Wilson’s proposed shelter expansion this week and moved a third bill forward, clearing a legal path for the city to build larger tiny house villages on a shorter timeline and providing $5 million to help pay for the first of 1,000 new shelter units Wilson has said her administration will add this year. But the council had questions about how the mayor plans to make her shelter plans sustainable, given ongoing budget deficits.
The King County Regional Homelessness Authority will not oversee any of the new shelter contracts, the Wilson administration confirmed to PubliCola. KCRHA is currently undergoing a forensic audit into its accounting and budgeting practices, a sign of strong concern from both the city and King County, its two primary funders.
One group that was notably missing from a public discussion of Mayor Katie Wilson’s shelter expansion plan was the King County Regional Homelessness Authority, which is supposed to manage every publicly funded homeless shelter contract in the region. Instead, the city is going it alone in Wilson’s top campaign priority—building 1,000 new units of shelter, such as tiny house villages, in 2026, and a total of 4,000 by the end of her term.
Wilson’s team has said they can move faster if the city does the work. But they’re also waiting on the outcome of a major forensic audit that could shed unfavorable light on the KCRHA’s finance and budgeting practices. That audit, which the city is paying an outside consultant more than $600,000 to conduct, has been going on since August and is supposed to wrap up this month. (King County is also helping to pay for the audit.)
So far, Wilson’s team has not suggested that they’re concerned about KCRHA’s ability to administer homelessness contracts; instead, they’ve said it’s just easier and more logical for the city to do it.
Near the end of a city council committee meeting on Wednesday, for instance, Council President Joy Hollingsworth asked whether the KCRHA would “have a role” in the city’s big shelter expansion plans. Or, Hollingsworth asked, “are we transitioning that a little bit now to what we’re doing at the city, because those outcomes have not been—I’ll just be frank—what the public has anticipated for the money that we have been spending or giving to the King County Regional Homelessness Authority?”
Jon Grant, Wilson’s homelessness advisor, hemmed and hawed. “You know, we have, I think, a very important partnership and relationship with the King County Regional Homelessness Authority. …. And I think that collaboration will continue.” But, Grant said, it just makes more sense for the city itself to oversee the new shelters and administer contracts through the city’s Human Services Department—”in parallel to the work that we are also still doing with KCRHA and the work that they’re doing to operate the existing base of shelters,” of course.
Former mayor Bruce Harrell also worked to bring some of the work KCRHA was overseeing back in direct city control—focusing specifically on outreach and homelessness prevention, two areas the Harrell Administration said KCRHA “did not have the capacity” to oversee, given that they busy trying to implement Partnership for Zero—a plan, later abandoned, to end unsheltered homelessness in downtown Seattle.
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The forensic audit is taking a close look at the KCRHA’s finances—including the agency’s ongoing negative budget balance, which I wrote about last year. (KCRHA essentially starts every year with a fund balance of zero and borrows money, with interest to pay contractors throughout the year, paying back the loans when they receive money from funders.)
According to the city’s contract with consultant Clark Nuber, issued last July, the audit will “assess and document King County Regional Homelessness Authority’s (“KCRHA”) use and allocation of contributed funds; analyze the underlying drivers of its recurring negative cash position; assess the adequacy of the accounting infrastructure, information flow, and reporting; evaluate and reconcile cash advance activity to understand and identify issues related to reporting and reimbursement; and provide best practice recommendations to improve systems and processes.”
The audit was supposed to wrap up in December but the city extended the contract until the end of April late last year.
The homelessness agency has been audited before, by the state auditor and the King County Department of Human and Community Services, which raised serious concerns about the KCRHA’s accounting and monitoring practices—finding, for instance, that the agency had spent grant funding on ineligible projects, failed to executive projects on time, and had accounting errors that led to a negative balance at the end of the year.
The audit covers the period between 2021, when KCRHA started operations and July 2025. According to the contract, “If issues or suspected malfeasance are identified, the Consultant will propose additional targeted procedures to further investigate, which may include considerations such as expansion of the time range under scope, performing data analytics, staff and management interviews, and other related procedures.”
It’s unclear whether this audit, like the earlier ones, will find concerning issues with KCRHA’s internal accounting and budget practices, although early reports from people familiar with the process say it’s unlikely to be flattering. What is clear is that the city and county, which provide nearly 80 percent of the KCRHA’s budget, are following the outcome closely.
A spokesperson for Wilson told PubliCola the mayor’s office is “certainly aware of the audit, which was jointly commissioned by the previous administrations at the County and City. The mayor is concerned about KCRHA’s stewardship of public funds and will be asking hard questions about their financial controls & effectiveness.”
A spokesperson for DCHS said the department “supports the audit to gain a more clear and accurate understanding of KCHRA’s cashflow and to confirm that the organization has strong internal controls in place to sustain long-term cash management, including invoicing processes.
And a spokesperson for King County Executive Girmay Zahilay said, “Strong financial stewardship, transparency and accountability, and achieving tangible progress in addressing the homelessness crisis that impacts every part of our region are top priorities for Executive Zahilay. Once the full audit report is received, the County will work with the City and other partners to determine next steps.”
