‘The supporting information isn’t there’: Auditors say tracing King County homeless agency’s missing $13M will be difficult

Auditors laid out a picture of deep financial dysfunction at the King County Regional Homelessness Authority (KCRHA) during a special meeting Friday.

They presented their findings to KCRHA’s governing board after an audit revealed a $45 million cash deficit and $13 million that went missing from the agency.

“KCRHA overspent funds and then made budget modifications after the fact,” lead auditor Mike Nurse said. “The takeaway is that there were no controls or oversight in place to manage budgets effectively and prevent overspending.”

Auditors pointed to bad bookkeeping, saying there’s no easy way to find the missing money.

“The accounting records are such that the details around receivables are not traceable because the supporting information isn’t there,” Nurse said.

Auditors says fraud at King County homeless agency ‘remains unclear’

As for all-out fraud at KCRHA, Nurse said the answer “remains unclear.”

He noted the agency remains at risk for potential fraud in the future.

“All it takes is one bad actor with access and motivation to create a problem,” Nurse said.

King County Executive Girmay Zahilay listened in as auditors reported their conclusions to the authority’s governing board.

“Homelessness is the most urgent challenge facing our region, and the system that we’re discussing today is central to how we respond to that challenge,” Zahilay said.

Nurse said fixing the issues won’t be simple and will take a major organization-wide overhaul.

“It will not be resolved by a quick correction, simple accounting fix, or a new software,” he said. “Meaningful correction would require sustained management attention, a clear order of priorities, and steady follow-through over time.”

A growing number of lawmakers have said they’ll support legislation to completely dissolve KCRHA. Rod Dembowski and Maritza Rivera are drafting separate pieces of legislation to dismantle the agency entirely, arguing that the problems outlined in the audit point to systemic failures.

“They say that the road to hell is paved with good intentions,” Dembowski explained at a press conference with Rivera inside City Hall Thursday. “And the King County Regional Homelessness Authority was set up six years ago with the best of intentions, but the tool that was set up has been given more chances than it deserves at this point, and it has failed again and again and again.”

Contributing: Aaron Granillo and Luke Duecy, KIRO Newsradio; Julia Dallas, MyNorthwest