‘This is egregious’: Seattle lawmakers move to dissolve King County homelessness agency after $13M audit findings, $45M deficit

Two Seattle-area lawmakers are now drafting legislation to dissolve the King County Regional Homelessness Authority (KCRHA) after a forensic audit revealed $13 million in taxpayer funds were mismanaged amid a growing $45 million deficit. They made that announcement during a quickly formed press conference in Seattle City Hall on Thursday.

Seattle City Councilmember Maritza Rivera and King County Councilmember Rod Dembowski said the findings raise serious concerns about financial oversight at the agency, which was created in 2019 to address homelessness across King County. Auditors said they could not rule out whether any of the missing funds were stolen.

“The state of the record keeping is apparently so bad that they, while they didn’t find fraud, they couldn’t assure us that there wasn’t any fraud,” Dembowski said.

Audit reveals widespread accounting failures, bulk expense entries

The report outlines widespread accounting failures, including inconsistent use of financial tracking systems that could have flagged overspending earlier. Auditors found dozens of accounts were poorly labeled or not described at all, limiting transparency into how public money was spent.

The audit also found the agency routinely grouped expenses such as payroll, reimbursements, and invoices into bulk entries rather than itemized transactions, making it difficult to track specific spending. Cash advances issued for homelessness programs were not consistently monitored.

“Now that we see, via the audit in 2023 and 2024, and now with this latest forensic evaluation between 2023 and now, some things have been put in place to try to give the KCRHA an opportunity to fix the issues,” Rivera explained. “But now we see those have not been fixed. So, this is why we want to take swift action now to dissolve this entity and continue to work.”

Additionally, the agency failed to fully implement financial software systems, including Fluxx and Salesforce, to guide budgeting decisions, allowing overspending to continue unchecked, according to the report.

“This started out with the best of intentions,” Dembowski said. “Both the county and the city had for years been tackling the homelessness issue on what to do about it separately, and we had funding that we had allocated to it, and it just made sense to do this regional approach. So, we did enter it with the best of intentions.”

Lawmakers say agency failed to fix problems identified in earlier audits

Seattle leaders, including the mayor’s office, say immediate corrective action is underway following the audit, as scrutiny grows over how millions in public funds tied to the region’s homelessness response were handled. However, if the KCRHA is dissolved, it’s unclear what funding future programs to fight homelessness might look like.

“How specifically can the city or county manage the money better than what the regional homeless authority did? That’s a big question,” Dembowski said. “The challenge with the KCRHA is that you have devolved multiple things and removed accountability. We had this federated board of elected officials that met once a month. And if you go and look at the minutes, much of the recent meetings seem to be more about internal problems and executive sessions and not about driving a solution toward homelessness and helping folks that are on the street.”

Reporters also asked both council members what they wanted to say to taxpayers about the loss of $13 million and whether their message might include “I’m sorry.”

“The response is this is not acceptable. This is egregious, and we need to do something about it,” Rivera said. “We agree with the taxpayers. This is not okay.”

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