Seattle, county officials demand reform to homeless authority, file for dissolution

Two lawmakers from both Seattle and King County said they will file simultaneous resolutions to dissolve the Regional Homelessness Authority, as fallout from a critical audit of the agency continued Thursday.

"The evaluation shows a pattern of mismanagement of funds that can no longer be tolerated," Seattle Councilmember Maritza Rivera said in a news conference with King County Councilmember Rod Dembowski. "It is time to find a different way to make this very important work happen."

The reaction from local government officials following the audit - which questioned more than $4 million of the authority's administrative costs, discovered $6 million in overspend on its budget and struggled to find the paper trail for another $8 million - represents the biggest threat to the Regional Homelessness Authority since its inception in 2019.

Seattle Mayor Katie Wilson and King County Executive Girmay Zahilay have not explicitly joined the calls to abolish the authority. But the two local leaders have not removed the option from the table. In the meantime, a host of city and county officials have called for immediate financial controls, greater oversight or taking back millions of dollars in local funding.

Created with input and signoff from officials at Seattle and King County, the authority was an unusual example of designing a government agency from scratch, and officials at the time said they knew there would likely be wrinkles to iron out.

Since then, it has gone through five CEOs in as many years, with several candidates turning down the job. Mayor Bruce Harrell and Executive Dow Constantine consolidated more power over the authority's strategy and day-to-day spending decisions when they hired current CEO Kelly Kinnison, streamlining the authority's board structure at the same time.

The authority is entirely funded by Seattle, King County and a few suburban cities, with King County's and Seattle's representatives having a significant voice in its progress. Late payments to nonprofit contractors have been a known issue for years, even before the audits.

But while doubts about the authority have long bubbled below the surface, with King County Councilmember Reagan Dunn calling for its abolition as far back as three years ago, the latest analysis has opened the door to dissolution in a way past critiques have not.

"Cats get nine lives," Dembowski said. "This organization has had 10 - one more than it should have."

Lax invoicing, poor oversight

The "forensic analysis" completed last week covers the agency through July 2025. It criticized the $200 million organization's model of going deep into the red to pay providers before recouping costs from Seattle and King County. That approach leaves the authority, which reported roughly 80 full-time employees in a recent budget document, open to abuse and mismanagement absent airtight accounting practices, the report said.

The report found lax invoicing, poor oversight, extreme administrative costs and sloppy record-keeping. In some cases, as many as 16 months would pass between money being spent and an invoice going out for reimbursement, a debt that would accrue significant interest along the way.

Staffers without proper authority were signing off on payments to providers, with some lacking any documented authorization. As many as half of sampled payments did not appear connected to a specific contract.

Cash management often took place in open spreadsheets, email chains and chat messages rather than through any standardized tracking system, the analysis found. The agency was also found to be spending money before they technically had access to it, sometimes funneling dollars through various accounts and informally reimbursing itself at a later date.

The audit did not find evidence of fraud, but systems were so scattershot and difficult to track that the report did not rule it out. Taken altogether, the conclusions represented the "last straw" for Rivera and at least two other lawmakers.

‘This organization has failed'

If passed, Rivera and Dembowski's dual resolutions would trigger a yearlong wind-down of the authority, sending Seattle responsibilities back to the city and county responsibilities back to King County.

Dembowski couldn't say with confidence whether the wind-down would end with a better result for people living outside.

"But there is one thing that's certain, and that is that this organization has failed," he said.

King County Council Member Claudia Balducci agreed.

It is time to acknowledge that the KCRHA approach to regionalism has failed and must be replaced with a more effective model, she said.

Seattle City Councilmember Eddie Lin didn't call for the end of the authority, but in a statement he said he believed it was time for Seattle to take back control over its homelessness efforts, along with the funding that supports it.

He said the Regional Homelessness Authority had essentially become a "pass-through entity" to fund Seattle's homelessness service providers. But with Mayor Wilson's ambitious plan to create 4,000 shelter units by the end of her term, he said the city has shown how it can streamline its siting and permitting process on its own.

"This new, coordinated approach is already happening outside of KCRHA, and I'm struggling to see how KCRHA adds value in this effort," he said.

He could imagine the authority remaining in place, but the purpose would have to change, he said. He suggested that it would be better suited to facilitate collaboration across jurisdictions.

‘On life support'

Other local officials have not yet joined the call for abolishing the authority or removing significant amounts of funding, but most left the door open.

King County Council member Steffanie Fain, who is also a member of the authority's governing board, said she still believed in a regional model, but she warned that it could continue only with strong oversight and immediate reform.

"If that does not happen, we should be prepared to move toward a County-led structure that can deliver results," Fain said in a statement.

Seattle City Councilmember Rob Saka said he received the results of the audit only two days ago. While they were "greatly concerning," he said, he needed to learn more about what it would take to fix the problems the report identified.

Still, he said it was fair to say the Regional Homelessness Authority was "on life support."

But one member of the authority's governing board said the issues with the agency ran much deeper than lax accounting, and warned that getting rid of it wouldn't promise better results.

"I don't want anyone to labor under the delusion that dismantling KCRHA actually solves the problem of unsheltered homelessness," said Issaquah Deputy Council President Kelly Jiang, who serves on the authority's governing board.

Jiang said the financial failures identified in the audit were serious and required accountability. But she said it's not only important to make sure all funds are accounted for.

She said people in King County need to know if all money spent is serving the goals of getting people out of homelessness - in other words, is the county funding effective services? - which she said is not happening at any level of government in the region.

"I think we need to have fundamental reform with financial controls and performance standards for every taxpayer dollar we spend," she said. "It's a lot harder than dismantling the organization, but if we're really serious about helping the people sleeping on our streets tonight, it's what we're going to have to do."

Corrective action

Seattle Mayor Wilson, King County Executive Zahilay and other local leaders are expected to discuss the audit further at the next governing board meeting, scheduled for Friday.

In the meantime, Wilson and Zahilay have already asked the authority to account for the gaps identified in the audit. In a letter sent Wednesday evening, they requested the agency to explain, by May 8, what happened to the more than $8 million in funds that so far have not been accounted for, as well as the more than $4 million that agency spent over budget.

They also asked the authority to immediately show how it is improving documentation for employee reimbursements and the use of gift cards and purchase cards.

The city and county leaders also requested the Regional Homelessness Authority to establish a financial oversight committee, implement a hiring freeze, stop all discretionary spending and pause any new agreements that would result in more costs to the agency.

According to that letter, the Regional Homelessness Authority must provide a written corrective action plan by May 23.

"The City of Seattle and King County are committed to strong financial stewardship of public funds, take the findings outlined in the report seriously, and expect KCRHA to act swiftly to address identified challenges," the letter stated.

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