Seattle and King County officials are requiring additional corrective actions from the King County Regional Homelessness Authority (KCRHA) and embedding outside financial oversight within the agency after concluding that its plan to address significant financial management problems remains incomplete.
In a June 8 letter to KCRHA Chief Executive Officer Dr. Kelly Kinnison, leaders from King County’s Department of Community and Human Services and Seattle’s Human Services Department said the agency’s corrective action plan demonstrates progress but does not fully address several major concerns identified in a forensic evaluation released earlier this year.
The move marks the latest development in an ongoing effort to strengthen financial accountability at the regional homelessness agency, which oversees hundreds of millions of dollars in public funding and coordinates homelessness response services across Seattle and King County.
“The scale, urgency, and complexity of the current remediation effort exceed KCRHA’s current internal capacity and capability alone,” KCRHA acknowledged in its corrective action plan.
In response, Seattle and King County announced plans to immediately place an independent financial consultant within the agency to help stabilize operations, improve internal controls and verify that corrective measures are being implemented.
“Our assessment of KCRHA’s plan found inadequate corrective steps and a lack of clear timelines and deliverables for how the agency will strengthen its financial controls and reporting systems,” King County Executive Girmay Zahilay said in a statement. “Protecting taxpayer dollars and maintaining stable services for people experiencing homelessness are my top priorities.”
Mayor Katie Wilson said the intervention is intended to ensure both financial accountability and continuity of services.
“My top priority is ensuring that the most vulnerable members of our community receive the shelter, housing and services they deserve,” Wilson said. “It is particularly essential that KCRHA has the support it needs to support a strong Continuum of Care application and disbursement of federal grant funding.”
The latest concerns stem from a forensic evaluation conducted by Clark Nuber, an accounting and consulting firm retained by Seattle and King County. The review examined KCRHA’s financial management practices and identified significant weaknesses in accounting systems, oversight processes, internal controls, documentation, reconciliation procedures and governance structures.
According to the assessment, KCRHA received approximately $533.9 million in funding from its inception through July 2025, most of it provided by Seattle and King County.
While the Clark Nuber assessment stopped short of alleging large-scale fraud, reviewers concluded that weaknesses in financial controls created ongoing risks related to waste, abuse and compliance failures. KCRHA itself acknowledged in its corrective action plan that the forensic evaluation uncovered “significant deficiencies in financial management, accounting infrastructure, documentation, reconciliation, internal controls, reporting, and governance oversight.”
Among the most serious concerns identified by reviewers was a $6.4 million programmatic overspend that exceeded approved budgets and was incurred without required approval. Clark Nuber’s assessment noted that the overspend was not directly addressed in KCRHA’s corrective action plan and lacked a specific resolution strategy.
The review also cited an unreconciled $8 million accounts receivable balance that auditors were unable to fully explain or match to supporting records. KCRHA’s corrective action plan states that the amount does not necessarily represent missing funds but instead reflects years of incomplete transaction-level documentation and accounting records that could not be readily traced during the review process.
Another major issue involves KCRHA’s negative position in the King County Investment Pool. According to the assessment, the agency accumulated a structural cash deficit that reached $44.7 million, generating approximately $1.27 million in interest costs that continue to grow. Reviewers noted that no long-term funding source has yet been identified to cover those costs.
The Clark Nuber review also raised concerns about federal compliance. The assessment found KCRHA lacks a documented internal control framework consistent with the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, standards required under federal Uniform Guidance regulations. Reviewers warned that KCRHA plans to delay full implementation of that framework for up to 18 months while continuing to administer substantial federal funding.
In evaluating KCRHA’s response, Clark Nuber concluded that while the agency addressed all major categories of findings, many proposed solutions remain conditional and dependent on future staffing, outside assistance or additional funding approvals. The report noted that no permanent chief financial officer has been hired, measurable performance targets have not been established, and several high-risk corrective actions have not yet been independently verified.
The assessment also found that three governance directives issued by Seattle and King County in April were not adequately addressed in KCRHA’s corrective action plan, including recommendations related to a hiring freeze, discretionary spending restrictions and a pause on agreements that could increase costs or liabilities.
For its part, KCRHA argues that while it accepts responsibility for internal shortcomings, some of the underlying problems are tied to broader structural issues involving reimbursement systems, cash-flow timing, fund advances and coordination between the homelessness authority, Seattle and King County. The agency said lasting solutions will require collaboration among all three entities.
“KCRHA owns its internal failures,” the agency wrote in its corrective action plan. “The region must jointly fix the shared operating model.”
Under the timeline established by Seattle and King County, KCRHA must demonstrate progress on a series of corrective actions over the next several months.
By July 31, the agency must provide documentation showing it has addressed four immediate priorities, including a specific corrective action plan for the $6.4 million overspend and a written interim federal compliance framework. Additional requirements, including independent verification of reforms and a timeline for hiring a permanent chief financial officer, are due by Aug. 28. Longer-term reporting and oversight requirements must be in place by Sept. 30.
Seattle and King County officials say the goal is not only to strengthen accountability but also to ensure the region’s homelessness response system remains stable while reforms are implemented.
The homelessness authority continues to administer critical regional functions, including federal Continuum of Care funding, coordinated entry services, provider contracting, data management and homelessness response planning across King County.
Whether KCRHA can successfully implement the required reforms, restore confidence among funders and stakeholders, and maintain service delivery while addressing years of financial management challenges will likely remain a central issue for regional leaders in the months ahead.
