A forensic evaluation found major financial and operational failures at the King County Regional Homelessness Authority, including a $44.7 million negative cash balance and millions in unreconciled funds, prompting urgent calls for accountability and raising new questions about the agency’s future.
The report, commissioned by the City of Seattle and King County and conducted by Clark Nuber, reviewed operations from mid 2021 through July 2025 and identified persistent weaknesses in cash management, accounting systems and governance.
Investigators found the agency carried nearly $49.8 million in receivables as of July 31, 2025, including approximately $8 million that could not be reconciled based on available records. The report also identified a $4.26 million administrative deficit, which includes more than $1 million in interest costs tied to ongoing negative cash balances.
The evaluation found the financial strain developed over time, driven by systemic issues rather than a single event. Delays in invoicing played a significant role, with some billing submitted more than a year after expenses were incurred. For example, a January 2023 billing period for the City of Seattle was not invoiced until May 2024, a delay of about 16 months. More than a quarter of city invoices and more than half of county invoices were submitted more than 30 days late, slowing reimbursements and limiting visibility into cash flow.
In a separate review of sampled invoices, investigators found 86%, or 25 of 29, did not match supporting expenditure records, pointing to broader issues with accuracy and documentation.
The report also found the agency relied heavily on advance funding, receiving more than $226.9 million during the review period, but did not maintain clear tracking mechanisms to show how those funds were used. Accounting records often lacked sufficient detail to trace transactions, particularly prior to late 2024, reducing transparency.
Investigators identified broader weaknesses in internal controls and governance, including the absence of a formal internal control framework and inconsistent financial reporting. While the evaluation did not identify evidence of large scale fraud in the samples reviewed, it warned that gaps in oversight increased the risk of fraud, waste and abuse.
King County Councilmember Rod Dembowski called for the agency to be dissolved, citing repeated failures.
“It’s now time for elected officials to bring this failed experiment to an end,” said Dembowski. “The Authority has had many chances to advance its mission, and has failed miserably, over and over again. The financial review which has been completed is shocking in its findings – overspending, lack of controls, and an inability to show where significant public dollars have been spent. The agency has failed in its core obligation – to make significant progress in getting people sheltered.”
“We must return the work of addressing homelessness to the City of Seattle, King County, and our partner cities throughout the region, and eliminate this expensive and ineffective layer of government,” continued Dembowski.
Other officials pointed to the findings as evidence of serious management and oversight failures, while emphasizing the need for reform.
“The results of the recent King County Regional Homelessness Authority audit are damning,” said Seattle City Councilmember Bob Kettle. “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.”
Seattle City Councilmember Maritza Rivera described the findings as unacceptable and called for significant changes to the agency’s structure.
“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,” said Rivera. “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,” added Rivera.
City and county leaders have directed the agency to submit a written response by May 8, 2026, outlining how it will address high risk financial issues, followed by a broader corrective action plan by May 23, 2026.
The directive also calls for immediate steps to strengthen internal controls, including improved oversight of employee reimbursements, purchase cards and accounting permissions.
The findings raise broader concerns about transparency and accountability in the use of public funds for homelessness services across the region.
Seattle Mayor Katie Wilson said the report underscores the need for immediate action.
“Addressing homelessness is my highest priority, and I have serious concerns about KCRHA’s management of city funds,” said Wilson. “We need to take swift action to protect public dollars. All options are on the table.”
