The Los Angeles City Council has approved a payment of up to $2.2 million for an external audit of homelessness programs, as mandated by a federal judge.
However, this amount falls short of the $2.8 million to $4.2 million proposed by the auditing firm chosen by U.S. District Judge David O. Carter. The council did not provide a reason for setting a lower budget.
Initially, Judge Carter seemed inclined to accept the council's offer.
However, he later expressed dissatisfaction, stating, "I can't have a substandard audit. It can't be $100,000 short or even a million short." He emphasized that the audit must meet the agreed scope of work.
Judge Carter highlighted that the council does not have control over the audit's cost and warned that if the audit falls short, it could lead to further litigation.
The audit is part of a lawsuit filed in 2020 by the L.A. Alliance for Human Rights, alleging that the city and county were failing in their obligation to provide shelter and services for people experiencing homelessness.
The demand for the audit arose in February, when the L.A. Alliance requested sanctions of $6.4 million for missed deadlines. Despite not initially leaning towards sanctions, Judge Carter agreed that Umhofer, Mitchell & King LLP should be paid $725,000.
However, he emphasized that the audit was the primary concern, as he sought greater transparency regarding spending on homelessness.
Following his insistence, the city and alliance attorneys selected several outside auditing firms to bid for the job. Alvarez & Marsal emerged as the preferred choice.
The council agreed in a closed session to pay between $1.5 million and $2.2 million for the audit. Judge Carter also favored Alvarez & Marsal and adjourned the hearing to Monday to finalize details with the firm.