CO. AUD.

FY 2019 2020

County Auditors · los-angeles-2019-fy-2019-2020 · Other · 2019-01-01 · Los Angeles

COUNTY OF LOS ANGELES DEPARTMENT OF AU DITOR.CONTROLLER KENNETH HAHN HALL OF ADMINISTRATION 5OO WEST TEMPLE STREET, ROOM 525 LOS ANGELES, CALIFORNIA 9OO1 2-3873 PHONE: (213) 974-8301 FAX: (213) 626-5427 ARLENE BARRERA ASSISTANT AUDITOR-CONTROLLERS AUDITOR-CONTROLLER PETER HUGHES OSCARVALDEZ KAREN LOQUET CHIEF DEPUTY AUDITOR-CONTROLLER CONNIE YEE December 23,2020 TO Supervisor Hilda L. Solis, Chair Supervisor Holly J. Mitchell Supervisor Sheila Kuehl Supervisor Janice Hahn Supervisor Kathryn Barger FROM: Arlene Barrera Auditor-Controller SUBJECT: AUDIT OF THE HOMELESS AND HOUSING MEASURE H SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30,2O2O Attached is the independently audited report for the County of Los Angeles Homeless and Housing Measure H Special Revenue Fund (Measure H) Schedule of Revenues and Expenditures and Changes in Fund Balance (Schedule) for the year ended June 30, 2020. We contracted with an independent Certified Public Accounting firm, BCA Watson Rice LLP (BCA or auditor), to perform the audit under the Auditor-Controller's master agreement for audit services. BCA's report (Attachment l) concludes that the Schedule is presented fairly in conformance with generally accepted accounting principles. ln addition, the auditor did not identify any audit findings this year. We also engaged BCA to complete an Agreed Upon Procedures review to ensure that Measure H funding was being used as intended by the voter approved Measure. The auditor's report (Attachment ll) did not identify any exceptions this year. lf you have any questions please call ffiê, or your staff may contact Terri Kasman at tkasman@aud itor. lacou ntv. gov. AB:OV:PH:TK:JH Attachments c: Fesia Davenport, Acting Chief Executive Officer CeliaZavala, Executive Director, Board of Supervisors Audit Committee Countywide Communications Help Conserve Paper - Print Double-Sided "To Enrich Lives Through Effective and Caring Service" Attachment I C O U N T Y O F L O S A N G E L E S Independent Auditor’s Report on Schedule of Revenues and Expenditures and Changes in Fund Balance HOMELESS AND HOUSING MEASURE H SPECIAL REVENUE FUND For the Fiscal Year Ended June 30, 2020 2 3 5 5 C r e n s h a w B l v d . S u i t e 1 5 0 T o r r a n c e , C A 9 0 5 0 1 t: ( 3 1 0) 792-4640 f: ( 3 1 0) 792-41 40 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Table of Contents Page Independent Auditor’s Report ..................................................................................................................... 1 Financial Statements Schedule of Revenues and Expenditures and Changes in Fund Balance ............................................. 3 Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance for Measure H Special Revenue Fund ............................................................................................ 6 Required Supplementary Information Schedule of Revenues and Expenditures and Changes in Fund Balance – Budget and Actual on Budgetary Basis For the fiscal year ended June 30, 2020 ...................................................................................... 11 Notes to the Required Supplementary Information ............................................................................ 13 Supplemental Information In Accordance with Government Auditing Standards Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Schedule of Revenues and Expenditures of the Homeless and Housing Measure H Special Revenue Fund Performed in Accordance with Government Auditing Standards ................................................. 15 Compliance Independent Auditor’s Report on Compliance with Requirements Applicable to Revenues and Expenditures of the Homeless and Housing Measure H Special Revenue Fund in Accordance with the Measure H, Ordinance 2017-001, Chapter 4.73 to the Los Angeles County Code -Transaction and Use Tax to Prevent and Combat Homelessness ............ 17 Current Year Audit Findings and Recommendations ......................................................................... 19 Status of Prior-Year Audit Findings and Recommendations .............................................................. 20 2355 Crenshaw Blvd. Suite 150 Telephone: 310.792.4640 Torrance, CA 90501 Facsimile: 310.792.4331 www.bcawatsonrice.com Independent Auditor’s Report Ms. Arlene Barrera Auditor-Controller County of Los Angeles Los Angeles, California Report on the Schedule of Homeless and Housing Measure H Revenues and Expenditures We have audited the accompanying Schedule of Homeless and Housing Measure H (Measure H) Revenues and Expenditures and Changes in Fund Balance (the Schedule) of the County of Los Angeles (the County) for the fiscal year ended June 30, 2020, and the related notes to the Schedule, which collectively comprise the County’s Schedule as listed in the table of contents. Management’s Responsibility for the Schedule of Measure H Revenues and Expenditures The County’s management is responsible for the preparation and fair presentation of the Schedule in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedule that is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on the Schedule based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Schedule is free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedule. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Schedule, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Schedule in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Schedule. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1 Opinion In our opinion, the Schedule referred to above presents fairly, in all material respects, the Measure H Revenues and Expenditures of the County for the fiscal year ended June 30, 2020, in accordance with accounting principles generally accepted in the United States of America. Other Matter Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 12 and 13 be presented to supplement the Schedule. Such information, although not a part of the Schedule, is required by the Governmental Accounting Standards Board who considers it to be an essential part of the financial reporting for placing the Schedule in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the Schedule, and other knowledge we obtained during our audit of the Schedule. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information As discussed in Note 2 to the Schedule, the accompanying Schedule of the Measure H Special Revenue Fund is intended to present the revenues and expenditures attributable to the Fund. They do not purport to, and do not, present fairly the financial position of the County, as of June 30, 2020, and the changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 30, 2020, on our consideration of the County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County’s internal control over financial reporting and compliance. Torrance, CA November 30, 2020 2 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Schedule of Revenues and Expenditures and Changes in Fund Balance For the Fiscal Year Ended June 30, 2020 3 R T E e v e n u e s: V o te r A p p ro v e d S p e c ia l T a x e s In te re st E a rn in g s P rio r Y e a r R e tu rn e d F u n d s o ta l R e v e n u e s x p e n d itu re s A : P re v e n t H o m e le ssn e ss A 1 : H o m e le ss P re v e n tio n P ro g ra m fo r F a m ilie s L o s A n g e le s H o m e le ss S e rv ic e s A u th o rity (L A H S A ) T o ta l A 1 : H o m e le ss P re v e n tio n P ro g ra m fo r F a m ilie s A 5 : H o m e le ss P re v e n tio n P ro g ra m fo r In d iv id u a ls L o s A n g e le s H o m e le ss S e rv ic e s A u th o rity (L A H S A ) T o ta l A 5 : H o m e le ss P re v e n tio n P ro g ra m fo r In d iv id u a ls T o ta l A : P re v e n t H o m e le ssn e ss B : S u b sid iz e H o u sin g B 1 : P ro v id e S u b sid iz e d H o u sin g to H o m e le ss D isa b le d In d iv id u a ls P u rsu in g S D e p a rtm e n t o f P u b lic S o c ia l S e rv ic e s T o ta l B 1 : P ro v id e S u b sid iz e d H o u sin g to H o m e le ss D isa b le d In d iv id B 3 : P a rtn e r w ith C itie s to E x p a n d R a p id R e -H o u sin g D e p a rtm e n t o f H e a lth S e rv ic e s L o s A n g e le s H o m e le ss S e rv ic e s A u th o rity (L A H S A ) T o ta l B 3 : P a rtn e r w ith C itie s to E x p a n d R a p id R e -H o u sin g B 4 : F a c ilita te U tiliz a tio n o f F e d e ra l H o u sin g S u b sid ie s L o s A n g e le s C o m m u n ity D e v e lo p m e n t A u th o rity (L A C D A ) T o ta l B 4 : F a c ilita te U tiliz a tio n o f F e d e ra l H o u sin g S u b sid ie s B 6 : F a m ily R e u n ific a tio n H o u sin g S u b sid y D e p a rtm e n t o f C h ild re n a n d F a m ily S e rv ic e s T o ta l B 6 : F a m ily R e u n ific a tio n H o u sin g S u b sid y B 7 : In te rim / B rid g e H o u sin g fo r T h o se E x itin g In stitu tio n s L o s A n g e le s H o m e le ss S e rv ic e s A u th o rity (L A H S A ) D e p a rtm e n t o f H e a lth S e rv ic e s D e p a rtm e n t o f M e n ta l H e a lth D e p a rtm e n t o f P u b lic H e a lth T o ta l B 7 : In te rim / B rid g e H o u sin g fo r T h o se E x itin g In stitu tio n s T o ta l B : S u b sid iz e H o u sin g S u I a ls P u rsu in g S S I S tra te g y b y D e p a rtm e n t/ A g e n c y : $ 6 ,9 8 9 ,5 2 9 ,2 2 0 ,9 1 5 ,1 3 8 ,0 0 7 ,2 0 5 ,0 0 7 2 ,5 1 8 ,5 4 1 4 ,1 8 9 ,0 0 1 ,4 6 8 ,0 0 4 ,5 3 1 ,0 4 2 1 ,8 7 8 ,0 0 7 1 ,2 0 6 ,6 8 3 ,0 0 5 2 0 08 0 0 4030 T o ta l b y S tra te g y $ 6 ,9 8 9 ,5 2 5 9 ,2 2 0 ,9 1 2 5 ,1 3 8 ,0 0 0 7 9 ,7 2 3 ,5 4 8 1 4 ,1 8 9 ,0 0 0 1 ,4 6 8 ,0 0 0 3 3 ,1 6 3 ,2 4 7 T o ta l b y O b je c tiv e 1 6 ,2 1 0 ,4 1 3 3 ,6 8 1 ,7 3 9 7 5 $ 3 7 1 ,5 2 2 ,1 3 5 3 7 3 ,7 1 6603 ,8,0,8,7 9032 3047 Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance are an integral part of this Schedule. County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Schedule of Revenues and Expenditures and Changes in Fund Balance (Continued) For the Fiscal Year Ended June 30, 2020 C: Increase Income C4: Establish a Countywide SSI Advocacy Program for People Experiencing Homelessness or at Risk of Homelessness Department of Health Services 6,066,749 Department of Mental Health 1,005,613 Department of Public Social Services 4,222,607 Total C4: Establish a Countywide SSI Advocacy Program 11,294,969 C7: Subsidized Employment for Homeless Adults Department of Workforce Development, Aging, and Community Services 6,221,631 Total C7: Subsidized Employment for Homeless Adults 6,221,631 Total C: Increase Income 17,516,600 D: Provide Case Management and Services D2: Jail In-Reach Department of Health Services 1,453,219 Los Angeles Sheriff's Department 431,330 Total D2: Jail In-Reach 1,884,549 D6: Criminal Record Clearing Project Department of Public Defender 2,298,161 Total D6: Criminal Record Clearing Project 2,298,161 D7: Provide Services and Rental Subsidies for Permanent Supportive Housing (PSH) Department of Health Services 69,946,000 Department of Mental Health 1,952,068 Department of Public Health 682,478 Total D7: Provide Services and Rental Subsidies for PSH 72,580,546 Total D: Provide Case Management and Services 76,763,256 E: Create a Coordinated System E6: Countywide Outreach System Department of Health Services 20,831,631 Department of Public Health 246,463 Los Angeles Homeless Services Authority (LAHSA) 10,244,879 Total E6: Countywide Outreach System 31,322,973 E7: Strengthen the Coordinated Entry System Los Angeles Homeless Services Authority (LAHSA) 28,505,860 Chief Executive Office 412,643 Total E7: Strengthen the Coordinated Entry System 28,918,503 Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance are an integral part of this Schedule. 4 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Schedule of Revenues and Expenditures and Changes in Fund Balance (Continued) For the Fiscal Year Ended June 30, 2020 E8: Enhance the Emergency Shelter System Department of Health Services 29,147,412 Los Angeles Homeless Services Authority (LAHSA) 59,530,478 Department of Mental Health 7 0,663 Department of Public Health 392,321 Total E8: Enhance the Emergency Shelter System 89,140,874 E14: Enhanced Services for Transition Age Youth Los Angeles Homeless Services Authority (LAHSA) 18,498,065 Total E14: Enhanced Services for Transition Age Youth 18,498,065 Total E: Create a Coordinated System 167,880,415 F: Increase Affordable/Homeless Housing F7: One-Time Housing Innovation Fund Chief Executive Office - Los Angeles Community Development Authority (LACDA) 4,845,000 Total F7: One-Time Housing Innovation Fund 4,845,000 Total F: Increase Affordable/Homeless Housing 4,845,000 Administrative: Homeless Initiative Administration 2,525,525 Total Administrative: 2,525,525 Grand Total Expenditures 419,423,028 Excess of Expenditures Over Revenues ( 45,709,301) Net Change in Fund Balance ( 45,709,301) Fund Balance, July 1, 2019 as restated 142,973,220 Fund Balance, June 30, 2020 $ 97,263,919 Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance are an integral part of this Schedule. 5 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance June 30, 2020 The Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance are summaries of significant accounting policies and other disclosures considered necessary for a clear understanding of the accompanying Schedule of Revenues and Expenditures. 1. Organization General The County of Los Angeles (County), which was established in 1850, is a legal subdivision of the State of California charged with general governmental powers. The County's powers are exercised through an elected five-member Board of Supervisors, which, as the governing body of the County, is responsible for the legislative and executive control of the County. Homeless and Housing Measure H Special Revenue Fund Measure H, also known as the Transaction and Use Tax to Prevent and Combat Homelessness Ordinance (Los Angeles County Code, Chapter 4.73) is a special revenue fund of the County used to account for the proceeds of the voter-approved quarter-cent county-wide sales tax that became effective in March 2017. The California Board of Equalization began collecting the Measure H quarter-cent sales tax from businesses and consumers in October 2017. Revenues collected are required to be expended by the County pursuant to an expenditure plan approved by the Board of Supervisors prior to June 30th of each fiscal year. The fiscal year (FY) 2019-2020 Board approved expenditure plan funded 16 Homeless Initiative strategies to combat the homeless crisis in Los Angeles County. The funding was allocated to the following County Departments and outside agencies: the Chief Executive Office (CEO), the Department of Children and Family Services (DCFS), the Department of Health Services (DHS), the Department of Mental Health (DMH), the Department of Public Health (DPH), the Department of Public Social Services (DPSS), Public Defender (PD), Workforce Development, Aging and Community Services (WDACS), Los Angeles Sheriff’s Department (LASD), the Los Angeles Community Development Authority (LACDA) formerly known as Community Development Commission (CDC) and the Housing Authority of the County of Los Angeles (HACoLA), and the Los Angeles Homeless Services Authority (LAHSA). These strategies were divided into the following six areas: Strategy A - Preventing Homelessness - Combating homelessness requires reducing the number of families and individuals who have become homeless and helping currently homeless families and individuals move into permanent housing. Strategy B - Subsidize Housing - Homeless families and individuals lack sufficient income to pay rent on an ongoing basis due to the high cost of housing in Los Angeles County. Subsidizing rent and related housing costs is key to enabling homeless families and individuals to secure and retain permanent housing and to prevent families and individuals from becoming homeless. Strategy C - Increase Income - A high percentage of homeless adults can increase their income through employment and qualified disabled homeless individuals can increase their income through federal disability benefits. This increase in income can assist homeless families and individuals pay for their own housing in the future. 6 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance June 30, 2020 1. Organization (Continued) Homeless and Housing Measure H Special Revenue Fund (Continued) Strategy D - Provide Case Management and Services - The availability of appropriate case management and supportive services is critical to enable homeless families and individuals to take advantage of an available rental subsidy, increase their income, and access/utilize available services and benefits. Since the specific needs of homeless families and individuals vary depending on their circumstances, they need case management and supportive services to secure and maintain permanent housing. Strategy E - Create a Coordinated System - Homeless individuals, families and youth often encounter multiple County departments, city agencies and community-based providers based on their complex individual needs. This fragmentation is often exacerbated by lack of coordination of services, disparate eligibility requirements, funding streams, and bureaucratic processes. A coordinated system brings together homeless and mainstream services to maximize the efficiency of current programs and expenditures. Strategy F - Increase Affordable Homeless Housing - The lack of affordable housing for the homeless contributes substantially to the current crisis of homelessness. The County and cities throughout the region can increase the availability of both affordable and homeless housing though a combination of land use policy and subsidies for housing development. 2. Summary of Significant Accounting Policies The Schedule of Revenues and Expenditures and Changes in Fund Balance for the Homeless and Housing Measure H Special Revenue Fund (the Schedule) has been prepared in conformity with Generally Accepted Accounting Principles in the United States of America (US GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the recognized standard-setting body for establishing governmental accounting and financial reporting principles for governments. The most significant of the County’s accounting policies with regard to the special revenue fund type are described below: Fund Accounting The County utilizes fund accounting to report its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. Funds are classified into three categories: governmental, proprietary, and fiduciary. Governmental Funds are used to account for most of the County’s governmental activities. The measurement focus is a determination of changes in financial position, rather than a net income determination. The County uses governmental fund type Special Revenue Fund to account for Measure H sales tax revenues and expenditures. Special Revenue Funds are used to account for proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. 7 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance June 30, 2020 2. Summary of Significant Accounting Policies (Continued) Basis of Accounting The modified accrual basis of accounting is used for the special revenue fund type. Under the modified accrual basis of accounting, revenues (primarily from sales tax) are recorded when susceptible to accrual, which means measurable (amount can be determined) and available (collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period). Expenditures are generally recorded when a liability is incurred. Investment Earnings The County maintains a pooled cash and investments account that is available for use by all funds, except those restricted by State statutes. For the fiscal year ended June 30, 2020, the Homeless and Housing Measure H Special Revenue Fund had investment earnings of $2,136,000. Use of Estimates The preparation of the Schedule in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates. Schedule of Revenues and Expenditures and Changes in Fund Balance for Measure H Special Revenue Fund The Schedule is intended to reflect the revenues and expenditures of the Homeless and Housing Measure H Special Revenue fund only. Accordingly, the Schedule does not purport to, and does not, present fairly the financial position of the County and changes in financial position thereof for the year then ended in conformity with US GAAP. The audited financial statements for the Homeless and Housing Measure H Special Revenue Fund for the fiscal year ended June 30, 2020 are included in the County’s Audited Comprehensive Annual Financial Report (CAFR), which can be found at https://auditor.lacounty.gov/la-county-cafr/. 3. Los Angeles Homeless Services Authority For the year ended June 30, 2020, the County recorded $210,039,311 for LAHSA’s Measure H expenditures to prevent and combat homelessness projects under various homeless initiative strategies as listed in the table on the following page. However, LAHSA’s actual Measure H expenditures were $215,063,750 for the year ended June 30, 2020. The $5,024,439 difference represents LAHSA’s late 4th quarter claims/billings not reimbursed in FY 2019-20 by the County since it was submitted beyond the County’s processing cut-off date for expenditures reimbursements/payments. 8 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Notes to the Schedule of Revenues and Expenditures and Changes in Fund Balance June 30, 2020 3. Los Angeles Homeless Services Authority (Continued) 9 AABBEEEE 15376781 4 S tr a te g y H o m e le s s P re v e n tio n P ro g ra m s fo r F a m ilie s H o m e le s s P re v e n tio n P ro g ra m s fo r In d iv id u a ls P a rtn e r w ith C itie s to E x p a n d R a p id R e -H o u s in g In te rim /B rid g e H o u s in g fo r th o s e E x is tin g In s titu C o u n ty w id e O u tre a c h S y s te m S tre n g th e n th e C o o rd in a te d E n try S y s te m E n h a n c e th e E m e rg e n c y S h e lte r S y s te m E n h a n c e d S e rv ic e s fo r T ra n s itio n A g e Y o u th T o ta l tio n s M e a s u r e H D is b u r s e m e n t b y C o u n ty $ 6 ,9 8 9 ,5 2 5 9 ,2 2 0 ,9 1 2 7 2 ,5 1 8 ,5 4 8 4 ,5 3 1 ,0 4 4 1 0 ,2 4 4 ,8 7 9 2 8 ,5 0 5 ,8 6 0 5 9 ,5 3 0 ,4 7 8 1 8 ,4 9 8 ,0 6 5 $ 2 1 0 ,0 3 9 ,3 1 1 M e a s u r e H A c tu a l E x p e n d itu r e $ 7 ,2 8 9 ,3 9 ,2 7 5 ,1 7 8 ,4 8 0 ,2 4 ,5 1 3 ,9 1 0 ,6 1 5 ,4 2 8 ,9 6 7 ,4 5 6 ,7 2 3 ,8 1 9 ,1 9 8 ,1 $ 2 1 5 ,0 6 3 ,7 s 594538895 264779230 D iffe r e n $ (2 9 (5 (5 ,9 6 1 (3 7 (4 6 2 ,8 0 (7 0 $ (5 ,0 2 c e 9 ,8 4 ,2 1 ,6 7 ,0 0 ,5 1 ,6 6 ,5 0 ,1 4 ,4 289852923 746789689 ))) )) )) 4. Restatement of Fund Balances The fund balances as of June 30, 2019 have been restated to reflect an adjustment caused by the double recording of FY 2018-2019 expenditures of the Department of Public Defender as follows: F P F u r u n io n d r d B - p B a e a la n c e r io d a la n c e , J d j , J u u u n s n e t m e 3 e 3 0 n 0 , 2 t , 2 0 0 1 1 9 9 a a s s o r r e ig s t in a t a e lly d s t a t e d U .S . G A A P $ 1 4 3 ,0 0 ( 3 $ 1 4 2 ,9 7 B a 4 ,7 1 ,5 3 ,2 s 7 5 2 is 4 4 ) 0 B u d g e t a r y B $ 1 0 5 ,9 5 2 ( 3 1 $ 1 0 5 ,9 2 1 a ,9 ,5 ,3 s is 4 9 5 4 9 5 ) 5. COVID-19 Impact and Considerations The COVID-19 outbreak in the United States has caused business disruption through mandated and voluntary closings of businesses. While the disruption is currently expected to be temporary, there is considerable uncertainty around its duration. The County, through the CEO, expects this matter to negatively impact its operating environment; however, the related financial impact and duration cannot be reasonably estimated at this time. 6. Subsequent Events In preparing the Schedule of Measure H Revenues and Expenditures, the County has evaluated events and transactions for potential recognition or disclosure through November 30, 2020, the date the Schedule was issued. No subsequent events occurred that require recognition or additional disclosure in the Schedule. REQUIRED SUPPLEMENTARY INFORMATION 10 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Schedule of Revenues and Expenditures and Changes in Fund Balance – Budget and Actual on a Budgetary Basis For the Fiscal Year Ended June 30, 2020 Budget Actual Variance Revenues Voter Approved Special Taxes $ 398,000,000 $ 371,526,893 $ (26,473,107) Interest Earnings - 1 ,746,882 1 ,746,882 Prior Year Returned Funds - 50,834 50,834 Total Revenues 398,000,000 373,324,609 ( 24,675,391) Expenditures A: Prevent Homelessness A1: Homeless Prevention Program for Families Los Angeles Homeless Services Authority 11,445,816 6 ,989,525 4 ,456,291 Consumer and Business Affairs 1,000,000 - 1 ,000,000 Chief Executive Office 1,500,000 - 1 ,500,000 Total A1: Homeless Prevention Program for Families 13,945,816 6 ,989,525 6 ,956,291 A5: Homeless Prevention Program for Individuals Consumer and Business Affairs 1,000,000 - 1 ,000,000 Chief Executive Office 1,500,000 - 1 ,500,000 Los Angeles Homeless Services Authority 12,210,770 9 ,220,912 2 ,989,858 Total A5: Homeless Prevention Program for Individuals 14,710,770 9 ,220,912 5 ,489,858 Total A: Prevent Homelessness 28,656,586 16,210,437 12,446,149 B: Subsidize Housing B1: Provide Subsidized Housing to Homeless Disabled Individuals Pursuing Supplemental Security Income (SSI) Department of Public Social Services 5,138,000 5 ,138,000 - Total B1: Provide Subsidized Housing to Homeless Disabled Individuals Pursuing SSI 5,138,000 5 ,138,000 - B3: Partner with Cities to Expand Rapid Re-Housing Department of Health Services 7,205,000 7 ,205,000 - Los Angeles Homeless Services Authority 107,069,033 72,518,548 34,550,485 Total B3: Partner with Cities to Expand Rapid Re-Housing 114,274,033 79,723,548 34,550,485 B4: Facilitate Utilization of Federal Housing Subsidies Los Angeles Community Development Authority 14,189,000 14,189,000 - Total B4: Facilitate Utilization of Federal Housing Subsidies 14,189,000 14,189,000 - B6: Family Reunification Housing Subsidy Department of Children and Family Services 1,468,000 1 ,468,000 - Total B6: Family Reunification Housing Subsidy 1,468,000 1 ,468,000 - B7: Interim/ Bridge Housing for Those Exiting Institutions Los Angeles Homeless Services Authority 4,676,000 4 ,531,044 144,956 Department of Health Services 21,878,000 21,878,000 - Department of Mental Health 72,000 71,203 797 Department of Public Health 6,683,000 6 ,683,000 - Total B7: Interim/ Bridge Housing for Those Exiting Institutions 33,309,000 33,163,247 145,753 Total B: Subsidize Housing 168,378,033 133,681,795 34,696,238 C: Increase Income C4: Establish a Countywide SSI Advocacy Program for People Experiencing Homelessness or at Risk of Homelessness Department of Health Services 6,451,000 6 ,066,749 384,251 Department of Public Social Services 4,600,000 4 ,222,607 377,393 Department of Mental Health 1,101,000 1 ,005,613 95,387 Total C4: Establish a Countywide SSI Advocacy Program 12,152,000 11,294,969 857,031 C7: Subsidized Employment for Homeless Adults Chief Executive Office 3,000,000 - 3 ,000,000 Department of Workforce Development, Aging, and Community Services 11,300,000 6 ,221,631 5 ,078,369 Total C7: Subsidized Employment for Homeless Adults 14,300,000 6 ,221,631 8 ,078,369 Total C: Increase Income 26,452,000 17,516,600 8 ,935,400 See accompanying notes to the required supplementary information. 11 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Schedule of Revenues and Expenditures and Changes in Fund Balance – Budget and Actual on a Budgetary Basis (Continued) For the Fiscal Year Ended June 30, 2020 Budget Actual Variance D: Provide Case Management and Services D2: CJariilm Inin-aRl eRacehcord Clearing Project Department of Health Services 1,870,000 1 ,453,219 416,781 Sheriff's Department 4 65,000 431,330 33,670 Total D2: Jail In-Reach 2,335,000 1 ,884,549 450,451 D6: Criminal Record Clearing Project Department of Public Defender 2,941,000 2 ,298,161 642,839 Total D6: Criminal Record Clearing Project 2,941,000 2 ,298,161 642,839 D7: Provide Services and Rental Subsidies for Permanent Supportive Housing (PSH) Department of Health Services 69,946,000 69,946,000 - Department of Mental Health 5,814,000 1 ,952,068 3 ,861,932 Department of Public Health 1,564,000 682,478 881,522 Total D7: Provide Services and Rental Subsidies for PSH 77,324,000 72,580,546 4 ,743,454 Total D: Provide Case Management and Services 82,600,000 76,763,256 5 ,836,744 E: Create a Coordinated System E6: Countywide Outreach System Department of Health Services 22,962,146 20,831,631 2 ,130,515 Los Angeles Homeless Services Authority 13,052,652 10,244,879 2 ,807,773 Chief Executive Office 70,000 - 70,000 Department of Public Health 7 56,000 246,463 509,537 Total E6: Countywide Outreach System 36,840,798 31,322,973 5 ,517,825 E7: Strengthen the Coordinated Entry System Los Angeles Homeless Services Authority 34,384,953 28,505,860 5 ,879,093 Chief Executive Office 15,700,000 412,643 15,287,357 Total E7: Strengthen the Coordinated Entry System 50,084,953 28,918,503 21,166,450 E8: Enhance the Emergency Shelter System Department of Health Services 40,972,854 29,147,412 11,825,442 Los Angeles Homeless Services Authority 63,546,776 59,530,478 4 ,016,298 Department of Mental Health 72,000 70,663 1,337 Department of Public Health 6 68,000 392,321 275,679 Total E8: Enhance the Emergency Shelter System 105,259,630 89,140,874 16,118,756 E14: Enhanced Services for Transition Age Youth Los Angeles Homeless Services Authority 24,440,000 18,498,065 5 ,941,935 Total E14: Enhanced Services for Transition Age Youth 24,440,000 18,498,065 5 ,941,935 Total E: Create a Coordinated System 216,625,381 167,880,415 48,744,966 F: Increase Affordable/Homeless Housing F7: One-Time Housing Innovation Fund Chief Executive Office 3,300,000 - 3 ,300,000 Los Angeles Community Development Authority 4,850,000 4 ,845,000 5,000 Total F7: One-Time Housing Innovation Fund 8,150,000 4 ,845,000 3 ,305,000 Total F: Increase Affordable/Homeless Housing 8,150,000 4 ,845,000 3 ,305,000 Administrative Homeless Initiative Administration 3,571,000 2 ,525,525 1 ,045,475 Total Administrative 3,571,000 2 ,525,525 1 ,045,475 Total Expenditures 534,433,000 419,423,028 115,009,972 Excess of Expenditures Over Revenues (136,433,000) ( 46,098,419) 90,334,581 Less: Contractual Obligations/Changes in fund balance Commitments Oustanding as of fiscal year end - 25,138,919 25,138,919 Changes in fund balance 30,511,605 ( 13,950,895) ( 44,462,500) Total Net Change in Contractual obligations 30,511,605 11,188,024 ( 19,323,581) Net Change in Fund Balance (105,921,395) ( 34,910,395) 71,011,000 Fund Balance, July 1, 2019 as restated 105,921,395 105,921,395 - Fund Balance, June 30, 2020 $ - $ 71,011,000 $ 71,011,000 See accompanying notes to the required supplementary information. 12 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Notes to the Required Supplementary Information June 30, 2020 1. Budgets and Budgetary Information In accordance with the provisions of Sections 29000-29144 of the Government Code of the State of California, commonly known as the County Budget Act, the County prepares and adopts an annual budget on or before October 2 for each fiscal year. Budgets are adopted on a basis of accounting that is different from accounting principles generally accepted in the United States of America. Budgets for the Homeless and Housing Measure H Special Revenue Fund are consistent with the annual expenditure plan approved by the Board of Supervisors. The County utilizes an encumbrance system as a management control technique to assist in controlling expenditures and enforcing revenue provisions. Under this system, the current year expenditures are charged against appropriations. Accordingly, actual revenues and expenditures can be compared with related budget amounts without any significant reconciling items. 2. Reconciliation of Fund Balance- Budgetary to US GAAP Basis The Schedule of Revenues and Expenditures and Changes in Fund Balance of the Homeless and Housing Measure H Special Revenue Fund has been prepared on a modified accrual basis of accounting in accordance with US GAAP. The Budgetary Comparison Schedule has been prepared on a budgetary basis, which is different from US GAAP. The following schedule is a reconciliation of the budgetary and US GAAP fund balances as of June 30, 2020: 2020 Fund Balance - budgetary basis $ 71,011,000 Encumbrances and other reserves 25,138,919 Subtotal 96,149,919 Adjustments: Change in revenue accruals 1 ,114,000 Fund Balance - US GAAP basis $ 97,263,919 13 SUPPLEMENTAL INFORMATION IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 14 2355 Crenshaw Blvd. Suite 150 Telephone: 310.792.4640 Torrance, CA 90501 Facsimile: 310.792.4140 www.bcawatsonrice.com Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Schedule of Revenues and Expenditures and Changes in Fund Balance of the Homeless and Housing Measure H Special Revenue Fund Performed in Accordance with Government Auditing Standards Ms. Arlene Barrera Auditor-Controller County of Los Angeles Los Angeles, California We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the Schedule of Revenues and Expenditures and Changes in Fund Balance (the Schedule) for Homeless and Housing Measure H (Measure H) Special Revenue Fund of the County of Los Angeles (the County) for the fiscal year ended June 30, 2020, and the related notes to the Schedule, which collectively comprised the County’s Schedule, and have issued our report thereon dated November 30, 2020. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the County’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the Schedule, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the County’s Schedule will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 15 Compliance and Other Matters As part of obtaining reasonable assurance about whether the County’s Schedule is free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of the amounts on the Schedule. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that is required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Torrance, California November 30, 2020 16 2355 Crenshaw Blvd. Suite 150 Telephone: 310.792.4640 Torrance, CA 90501 Facsimile: 310.792.4140 www.bcawatsonrice.com Independent Auditor’s Report on Compliance with Requirements Applicable to Revenues and Expenditures and Changes in Fund Balance of the Homeless and Housing Measure H Special Revenue Fund in Accordance with the Measure H, Ordinance 2017-001, Chapter 4.73 to the Los Angeles County Code – Transaction and Use Tax to Prevent and Combat Homelessness Ms. Arlene Barrera Auditor-Controller County of Los Angeles Los Angeles, California Report on Compliance We have audited the County of Los Angeles’ (the County) compliance of the Homeless and Housing Measure H (Measure H) revenues and expenditures and changes in fund balance with the compliance requirements described in the Measure H, Ordinance 2017-001, Chapter 4.73 to the Los Angeles County Code – Transaction and Use Tax to Prevent and Combat Homelessness, for the fiscal year ended June 30, 2020. Management’s Responsibility The County’s management is responsible for compliance with the requirements of laws and regulations applicable to the Measure H revenues and expenditures. Auditor’s Responsibility Our responsibility is to express an opinion on the County’s compliance with Measure H revenues and expenditures based on our audit of the compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the compliance requirements referred to above that could have a direct and material effect on Measure H revenues and expenditures occurred. An audit includes examining, on a test basis, evidence about the County’s compliance with those requirements and performing such other procedures, as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on the Measure H revenues and expenditures. However, our audit does not provide a legal determination of the County’s compliance with those requirements. Opinion on Measure H Revenues and Expenditures In our opinion, the County complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on the Measure H revenues and expenditures for the fiscal year ended June 30, 2020. 17 Report on Internal Control over Compliance Management of the County is responsible for establishing and maintaining effective internal control over compliance with the compliance requirements referred to above. In planning and performing our audit of compliance, we considered the County’s internal control over compliance with the requirements that could have a direct and material effect on the Measure H revenues and expenditures as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance and to test and report on internal control over compliance in accordance with the Measure H, Ordinance 2017-001, Chapter 4.73 to the Los Angeles County Code – Transaction and Use Tax to Prevent and Combat Homelessness, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a compliance requirement on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a compliance requirement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a compliance requirement of the Measure H revenues and expenditures that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Guidelines. Accordingly, this report is not suitable for any other purpose. Torrance, California November 30, 2020 18 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Current Year Audit Findings and Recommendations For the Year Ended June 30, 2020 There were no current year audit findings. 19 County of Los Angeles Homeless and Housing Measure H Special Revenue Fund Status of Prior-Year Audit Findings and Recommendations There were no prior year audit findings. 20 Attachment II C O U N T Y O F L O S A N G E L E S Independent Auditor’s Report on Applying Agreed-Upon Procedures MEASURE H (Ordinance 2017-001, Chapter 4.73 to the Los Angeles County Code – Transaction and Use Tax to Prevent and Combat Homelessness) For the Fiscal Year Ended June 30, 2020 2 3 5 5 C r e n s h a w B l v d . S u i t e 1 5 0 T o r r a n c e , C A 9 0 5 0 1 t: ( 3 1 0) 792-4640 f: ( 3 1 0) 792-41 40 2355 Crenshaw Blvd. Suite 150 Telephone: 310.792.4640 Torrance, CA 90501 Facsimile: 310.792.4331 www.bcawatsonrice.com INDEPENDENT ACCOUNTANT’S REPORT ON APPLYING AGREED-UPON PROCEDURES Ms. Arlene Barrera Auditor-Controller County of Los Angeles Los Angeles, California We have performed the procedures enumerated below, which were agreed to by the County of Los Angeles (the County), solely to assist the County in determining whether the eleven (11) County Departments and outside agencies that received Homeless and Housing Measure H (Measure H) Special Revenue Funds were in compliance with the Measure H Ordinance 2017-001, Chapter 4.73 to the Los Angeles County Code – Transaction and Use Tax to Prevent and Combat Homelessness terms and conditions for the year ended June 30, 2020. The eleven County Departments and outside agencies are as follows: the Chief Executive Office (CEO), the Department of Children and Family Services (DCFS), the Department of Health Services (DHS), the Department of Mental Health (DMH), the Department of Public Health (DPH), the Department of Public Social Services (DPSS), Public Defender (PD), Workforce Development, Aging and Community Services (WDACS), the Los Angeles Sheriff’s Department (LASD), the Los Angeles Community Development Authority (LACDA), and the Los Angeles Homeless Services Authority (LAHSA). The management of the eleven County Departments and outside agencies are responsible for compliance with the Measure H Ordinance requirements. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and the results of those procedures are as follows: 1. We performed the agreed-upon test procedures as described below utilizing the American Institute of Certified Public Accountants (AICPA) Sampling Guidelines. Results CEO CEO’s Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (35.61%) and non-payroll expenditures (64.39%). Based on the AICPA Sampling Guidelines, we selected a sample size of one month for payroll expenditures for the month of March 2020 and performed detailed testing of all employees charged to the program, which represented 8.84% of total payroll expenditures. In addition, we selected 25 transactions for non-payroll/program expenditures, which represented 60.46% of total non-payroll expenditures. No exceptions were found. DCFS DCFS’ Measure H expenditures for the year ended June 30, 2020 consist of DCFS payroll expenditures (8.78%) and subcontractor expenditures (91.22%). Based on the AICPA Sampling Guidelines, we selected a sample size of one month for payroll expenditures for the month of August 2019 and 1 performed detailed testing of all employees charged to the program, which represented 23.70% of total payroll expenditures. In addition, we randomly selected 25 subcontractor expense reports for non- payroll/program expenditures, equivalent to 66.00% of the total subcontractor expenditures. From these expense reports we selected 25 transactions to verify the adequacy of back-up supporting documents, which represented 6.64% of the selected subcontractor expense reports. No exceptions were found. DHS DHS’ Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (6.33%) and non-payroll expenditures (93.67%). Based on the AICPA Sampling Guidelines, we selected a sample size of one month for payroll expenditures for the month of March 2020 and performed detailed testing of 45 randomly selected employees charged to the program. In addition, we selected 33 expenditures reports for non-payroll reimbursement contract expenditures and 7 fee-for-service invoice contract expenditures representing 20.70% and 11.61% of the total non-payroll expenditures, respectively. From each expenditure report, we selected one transaction (33 for cost reimbursements and 7 for fee-for-service) to verify the adequacy of supporting back-up documentation. No exceptions were found. DMH DMH’s Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (79.19%) and non-payroll subcontractor expenditures (20.81%). Based on the AICPA Sampling Guidelines, we selected a sample size of two months consisting of four pay periods for payroll expenditures for the months of August 2019 and March 2020 and performed detailed testing of 20 employees who charged their payroll expenditures to the program. In addition, we reviewed four non- payroll subcontractor claimed expenditures (one claim per quarter), which represented 9.49% of total subcontractor expenditures. No exceptions were found. DPH DPH’s Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (11.53%) and non-payroll expenditures (88.47%). Based on the AICPA Sampling Guidelines, we selected a sample size of two months for payroll expenditures for the months of August 2019 and March 2020 and performed detailed testing of all employees charged to the program during these two months. In addition, we selected 4 transactions for non-payroll contractor expenditures, which represented 8.00% of total non-payroll contractor expenditures, and 36 non-payroll recipient expenditures, randomly selected from the months of July 2019 through June 2020, which represented 0.64% of total non-payroll recipient expenditures. The non-payroll recipient expenditures consist of monthly recurring payments for health services for various clients. No exceptions were found. DPSS DPSS’ Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (16.31%), non-payroll expenditures (48.01%), and subcontractor expenditures (35.68%). Based on the AICPA Sampling Guidelines, we selected a sample size of one month for payroll expenditures for the month of March 2020 and performed detailed testing of 22 employees who charged payroll expenditures to the program. We also selected 22 transactions for non-payroll expenditures, which represented 0.22% of total non-payroll expenditures. The non-payroll expenditures consist of recurring rental subsidy payments to various recipients/clients. In addition, we reviewed 18 subcontractor claims/invoices, which represented 19.75% of total subcontractor expenditures. From each subcontractor claim/invoice, we selected one transaction to verify the adequacy of supporting back-up documentation. The subcontractor expenditures represent payments made to subcontractors of the Department of Health Services for the implementation of the Benefit Advocacy Program for People Experiencing Homelessness or at Risk of Homelessness. No exceptions were found. 2 PD PD’s Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (61.11%) and non-payroll and subcontractor expenditures (38.89%). Based on the AICPA Sampling Guidelines, we selected a sample size of two months for payroll expenditures for the months of October 2019 and March 2020 and performed detailed testing of all employees who charged payroll to the program during these two months. In addition, we randomly selected nine non-payroll/subcontractor transactions/expenditures, which represented 76.23% of the total non-payroll/subcontractor expenditures. No exceptions were found. WDACS WDACS Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (13.91%) and subcontractor expenditures (86.09%). Based on the AICPA Sampling Guidelines, we selected a sample size of two months for payroll expenditures for the months of September 2019 and March 2020 and performed detailed testing of four employees who charged payroll to the program. In addition, we randomly selected 40 subcontractor expense reports for non-payroll/program expenditures, equivalent to 20.43% of the total subcontractor expenditures. From these expense reports we selected 40 transactions to verify the adequacy of back-up supporting documents, which represented 4.42% of the selected subcontractor expense reports. No exceptions were found. LACDA LACDA’s Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (7.23%) and non-payroll expenditures (92.77%). Based on the AICPA Sampling Guidelines, we selected a sample size of one month for payroll expenditures for the month of March 2020 and performed detailed testing of all employees charged to the program. In addition, we selected 40 transactions for non-payroll expenditures, which represented 44.38% of total non-payroll expenditures. No exceptions were found. LAHSA LAHSA’s Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (8.44%) and non-payroll/subcontractor expenditures (91.56%). Based on the AICPA Sampling Guidelines, we selected a sample size of one month of payroll expenditures for the month of March 2020 and performed detailed testing of 50 randomly selected employees charged to the program. In addition, we selected 60 expenditures reports for non-payroll/subcontractor expenditures, which represented 5.99% of total non-payroll/subcontractor expenditures. From the selected expenditures reports, we further selected 60 individual transactions for detailed testing. In addition to the foregoing detailed test procedures, we also reviewed LAHSA’s monitoring procedures and monitoring reports of its subcontractors to ensure that claimed expenditures were in accordance with the respective contracts/agreements and the expenditures claimed were allowable and within budget of the specific strategies. No exceptions were found. LASD LASD’s Measure H expenditures for the year ended June 30, 2020 consist of payroll expenditures (100%). Based on the AICPA Sampling Guidelines, we selected a sample size of two months consisting of four pay periods for payroll expenditures for the months of October 2019 and March 2020 and performed detailed testing of all employees charged to the program. No exceptions were found. 2. We verified that the Department/Agency or their contractors and subcontractors providing Measure H services maintained: a. Documentation to support the amount billed for providing Measure H program services under their contract. 3 Results CEO For the one month selected, we traced payroll expenditures to labor distribution reports, we agreed percentage of time charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the Employee Sequence Register. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the 25 non-payroll transactions selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. DCFS For the one month selected, we traced payroll expenditures to labor distribution reports, we agreed percentage of time charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the Employee Sequence Registers. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the 25 non-payroll transactions selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. DHS For the one month selected, we traced payroll expenditures to labor distribution reports, we agreed hours charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the Employee Sequence Registers. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the 33 non-payroll transactions for reimbursement contracts and 7 non-payroll transactions for fee-for-service contracts selected for detailed testing, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. DMH For the two months selected, we traced payroll expenditures to labor distribution reports, we agreed hours charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the Employee Sequence Registers. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the four non-payroll subcontractor/claims selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. DPH For the two months selected, we traced payroll expenditures to labor distribution reports, we agreed hours charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the Employee Sequence Register. We also confirmed 4 that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the 4 non-payroll contractor transactions selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. For the 36 non-payroll recipient expenditures transactions selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. DPSS For the one month selected, we traced payroll expenditures to labor distribution reports, we agreed hours charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the Employee Sequence Register. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the 22 non-payroll transactions (recurring rental subsidy payments) selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. For the 18 selected subcontractor expenditures, we agreed the expenditure to backup supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. PD For the two months selected, we traced payroll expenditures to labor distribution reports, we agreed payroll expenditures on the labor distribution report to the pay stubs, and agreed salaries on the labor distribution report to salaries in the Employee Sequence Register. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the nine non-payroll transactions selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. WDACS For the two months selected, we traced payroll expenditures to labor distribution reports, we agreed hours charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the Employee Sequence Register. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the 40 subcontractor expenditures selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. LACDA For the one month selected, we traced payroll expenditures to labor distribution reports, we agreed hours charged on the labor distribution report to the timesheets, and agreed pay rates charged on 5 the labor distribution report to pay rates in the employee payroll register. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the 40 non-payroll/program transactions selected, we agreed the expenditure to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. LAHSA For the one month payroll expenditures and the 50 randomly selected employees, we traced payroll expenditures to labor distribution reports, we agreed hours charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the employee personnel files. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. For the 60 non-payroll/subcontractor expenditures selected for detailed testing, we agreed the expenditures to back-up supporting documentation, confirmed that the expenditures were properly approved, and properly recorded in the accounting system. No exceptions were found. LASD For the two months selected, we traced payroll expenditures to labor distribution reports, we agreed hours charged on the labor distribution report to the timesheets, and agreed pay rates charged on the labor distribution report to pay rates in the employee personnel files. We also confirmed that timesheets were signed by the employee and approved by the supervisor. No exceptions were found. b. Records to verify that funds were used for allowable expenditures in compliance with the requirements of Measure H. Results CEO For the one month selected, we confirmed that the payroll expenditures were specific to the cost of Administration of the Measure H program. No exceptions were found. For the 25 transactions of non-payroll expenditures selected, we confirmed that the non-payroll expenditures were specific to the cost of Administration of the Measure H programs and Strategy E7 – Strengthen the Coordinated Entry System of the Measure H Program. No exceptions were found. DCFS For the one month selected, we confirmed that the payroll expenditures were specific to Strategy B6 – Family Reunification Housing Subsidy for the Measure H Program. No exceptions were found. For the 25 transactions of subcontractor expenditures/expenditures selected, we confirmed that these expenditures were specific to Strategy B6 – Family Reunification Housing Subsidy of the Measure H Program. No exceptions were found. 6 DHS For the one month of payroll expenditures selected, 33 transactions of non-payroll expenditures for reimbursement contracts, and seven non-payroll expenditure transactions for fee-for-service contracts, we confirmed with no exceptions that the payroll expenditures and non-payroll expenditures were specific to the following Measure H strategies. • Strategy B3 – Partners with Cities to Expand Rapid Re-Housing • Strategy B7 – Interim/Bridge Housing for those Exiting Institutions • Strategy C4/C5/C6 – Establish a Countywide SSI Advocacy Program for People Experiencing Homelessness or at Risk of Homelessness • Strategy D2 – Expansion of Jail In Reach • Strategy D7 – Provides Services and Rental Subsidies for Permanent Supportive Housing • Strategy E6 – Countywide Outreach System • Strategy E8 – Enhance the Emergency Shelter DMH For the two months of payroll expenditures selected and four subcontractor expenditures/claims selected, we confirmed with no exceptions that the payroll expenditures and subcontractor expenditures were specific to the following Measure H strategies. • Strategy B7 – Interim/Bridge Housing for those Exiting Institutions • Strategy C4/C5/C6 – Establish a Countywide SSI Advocacy Program for People Experiencing Homelessness or at risk of Homelessness • Strategy D7 – Provide Services and Rental Subsidies for Permanent Supportive Housing • Strategy E8 – Enhance the Emergency Shelter System DPH For the two months of payroll expenditures, four subcontractor expenditures, and 36 non-payroll recipient expenditures transactions selected, we confirmed that the payroll and non- payroll/subcontractor expenditures were specific to Strategy B7 – Interim/Bridge Housing for those Exiting Institutions, Strategy D7 – Provide Services and Rental Subsidies for Permanent Supportive Housing, Strategy E6 – Countywide Outreach System, and Strategy E8 – Enhance the Emergency Shelter System of the Measure H program. No exceptions were found. DPSS For the one month of payroll expenditures, 22 transactions of non-payroll expenditures and 18 transactions of subcontractor expenditures selected, we confirmed that these expenditures/expenditures were specific to the Strategy B1 - Provide Subsidized Housing to Homeless Disabled Individuals Pursing SSI and Strategy C4 – Establish a Countywide SSI Advocacy Program for People Experiencing Homelessness or at Risk of Homelessness of the Measure H Program. No exceptions were found. PD For the two months of payroll expenditures and nine non-payroll/subcontractor expenditures selected, we confirmed that these expenditures/expenditures were specific to the Strategy D6 – Criminal Record Clearing Project of the Measure H Program. No exceptions were found. WDACS For the two months of payroll expenditures and 40 subcontractor expenditures/expenditures selected, we confirmed that these expenditures/expenditures were specific to the Strategy C7 – 7 Subsidize Employment for Homeless Adults of the Measure H Program. No exceptions were found. LACDA For the one month of payroll expenditures and 40 transactions of non-payroll expenditures selected, we confirmed that the payroll and non-payroll expenditures were specific to Strategy B4 – Facilitate Utilization of Federal Housing and Strategy F7 – Preserve Current Affordable Housing and Promote the Development of Affordable Housing for Homeless Families and Individuals of the Measure H Program. No exceptions were found. LAHSA For the one month of payroll expenditures and 50 selected employees and 60 non- payroll/subcontractor expenditures, we confirmed with no exceptions that these expenditures/expenditures were specific to the following Measure H strategies: • Strategy A1 – Homeless Prevention Programs for Families • Strategy A5 – Homeless Prevention Programs for Individuals • Strategy B3 – Partners with Cities to Expand Rapid Re-Housing • Strategy B7 – Interim/Bridge Housing for those Exiting Institutions • Strategy E6 – Countywide Outreach System • Strategy E7 – Strengthen the Coordinated Entry System • Strategy E8 – Enhance the Emergency Shelter System • Strategy E14 – Enhanced Services for Transition Age Youth LASD For the two months of payroll expenditures selected, we confirmed that the payroll expenditures were specific to Strategy D2 – Expansion of Jail In Reach of the Measure H program. No exceptions were found. c. Internal controls over financial reporting and compliance with provisions of laws, regulations, contracts or grant agreements. Results CEO For the one month of payroll expenditures and 25 transactions of non-payroll expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. DCFS For the 25 transactions of subcontractor expenditures/expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. DHS For the one month of payroll expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. 8 For the 33 non-payroll expenditures selected for reimbursement contracts and seven non-payroll expenditures selected for fee-for-service contracts, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. DMH For the two months of payroll expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. For the four non-payroll subcontractor expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. DPH For the two months of payroll expenditures, four non-payroll contractor expenditures, and 36 non- payroll recipient expenditures transaction selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. DPSS For the one month of payroll expenditures and 22 transactions of non-payroll expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. For the 18 transactions of subcontractor expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. PD For the two months of payroll expenditures and nine transactions of non-payroll/subcontractor expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. WDACS For the two months of payroll expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. For the 40 transactions of subcontractor expenditures/expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. 9 LACDA For the one month of payroll expenditures and 40 transactions of non-payroll expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. LAHSA For the one month of 50 employee payroll expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. For the 60 non-payroll/subcontractor expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. LASD For the two months of payroll expenditures selected, the supporting documents showed evidence of being reviewed and properly authorized, and the expenditures tested complied with the Measure H Expenditure Plan approved by the Board of Supervisors for FY 2019-20. No exceptions were found. d. Minimum encryption standards required by the County of Los Angeles Board of Supervisors’ Policy 5.200, Contractor Protection of Electronic County Information (July 2016). Results We found that all 11 County Departments and outside Agencies complied with minimum encryption standards required by the County of Los Angeles Board of Supervisors’ Policy 5.200, Contractor Protection of Electronic County Information (July 2016). 3. We verified that the Measure H funds are being used for the specific strategies approved by the Board. Results CEO CEO was allocated $3,571,000 of Measure H funds to be used for Administration of the Measure H program, $15,700,000 of Measure H funds to be used for Strategy E7 – Strengthen the Coordination Entry System, and $3,300,000 of Measure H funds to be used for Strategy F7 – Affordable Housing Strategies of the Measure H program based on the Measure H Expenditure Plan approved by the Board of Supervisors in FY 2019-20. CEO’s Measure H expenditures in FY 2019-20 totaled $2,938,168, which consisted of $2,525,525 used for Administration, $412,643 used for Administration and Strategy E7 – Strengthen the Coordination Entry System, and $0 for Strategy F7 – One Time Housing Innovation Fund. No exceptions were found. 10 DCFS DCFS was allocated $1,468,000 of Measure H funds to be used for Strategy B6 – Family Reunification Housing Subsidies based on the Measure H Expenditure Plan approved by the Board of Supervisors in FY 2019-20. DCFS implemented the County-wide Family Reunification Housing Subsidy (FRHS) program to provide rapid rehousing and case management services to families in the child welfare system where the parent(s) homelessness is the sole barrier for the return of the children. For FY 2019-20, DCFS had four Homeless Services Section staff working on Strategy B6 - Family Reunification Housing Subsidies. DCFS’ Program Staff act as liaison for Housing Agency staff, Dependency Court and Case Carrying Certified Social Workers to provide assistance, trouble shooting, and guidance with the FRHS referral process and services; tracks all data and provides monthly updates on status of each family; facilitates monthly meetings with housing agencies, Community Development Commission, and Dependency Court; tracks deliverables and program outcomes. DCFS’ Measure H expenditures in FY 2019-20 totaled $1,468,000 and were specific for Strategy B6 – Family Reunification Housing Subsidies. No exceptions were found. DHS DHS was allocated $171,285,000 of Measure H funds to be used for the following six strategies: Measure H Strategy Allocation B3 Partner with Cities to Expand Rapid Re-Housing $ 7 ,205,000 B7 Interim/Bridge Housing for those Exisiting Institutions 2 1,878,000 C4/C5/C6 Establishing a Countywide SSI Advocacy Program for People Experiencing Homelessness or At-Risk of Homelessness 6,451,000 D2 Expansion of Jail In Reach 1,870,000 D7 Provide Services and Rental Subsidies for Permanent Supportive Housing 6 9,946,000 E6 Countywide Outreach System 2 2,962,146 E8 Enhance the Emergency Shelter System 4 0,972,854 Total $ 171,285,000 Under Strategy B3, DHS provides a time-limited intervention including financial assistance/subsidies and supportive services so that participants will be able to successfully maintain housing without long- term assistance. Under Strategy B7, DHS provides clients with complex health and/or behavioral health conditions who need a higher level of support services than is available in most shelter settings. Interim housing includes stabilization housing and recuperative care. Some interim housing programs provide enhanced onsite mental health services. Under Strategy C4/C5/C6, DHS expands and integrates physical and mental health clinical services to support County-wide Benefits Entitlements Services Team, including technical assistance, training, case consultation, record retrieval services, care coordination and comprehensive evaluations. Under Strategy D2, DHS expands Jail In Reach to make it available to all homeless people incarcerated in a Los Angeles County jail. Under Strategy D7, DHS increases existing work orders and executes new work orders with Supportive Housing Services Master Agreement vendors to provide Intensive Case Management Services. 11 Under Strategy E6, DHS aims at improving outreach efforts to homeless individuals and families on the streets and in encampments in Los Angeles County. DHS developed a dispatch and tracking technology infrastructure for outreach requests, expanded Service Planning Area (SPA)-level and macro coordination of outreach teams through Coordinated Entry System Outreach Coordinators, launch and implemented Multidisciplinary Outreach teams to better assist unsheltered homeless individuals through expanded multidisciplinary outreach capacity, and support and expand general outreach staffing in all SPAs to further support outreach bandwidth. Under Strategy E8, DHS provides interim housing to serve clients with complex health and/or behavioral health conditions who need a higher level of support services than is available in most shelter settings. DHS’ Measure H expenditures in FY 2019-20 totaled $157,317,462 and were specific for the strategies listed below. No exceptions were found. Measure H Measure H Disbursement by Actual Strategy County Expenditures Difference B3 Partner with Cities to Expand Rapid Re-Housing $ 7 ,205,000 $ 7 ,930,335 $ (725,335) B7 Interim/Bridge Housing for those Exisiting Institutions 2 1,878,000 2 1,890,129 (12,129) C4/C5/C6 Establishing a Countywide SSI Advocacy Program for People Experiencing Homelessness or At-Risk of Homelessness 6,066,749 6,087,173 (20,424) D2 Expansion of Jail In Reach 1,453,219 1,443,769 9,450 D7 Provide Services and Rental Subsidies for Permanent Supportive Housing 6 9,946,000 6 9,933,860 12,140 E6 Countywide Outreach System 2 0,831,631 2 0,872,655 (41,024) E8 Enhance the Emergency Shelter System 2 9,147,412 2 9,159,541 (12,129) Total $ 156,528,011 $ 157,317,462 $ (789,451) The $789,451 difference represents fourth quarter subcontractor expenditures which were submitted late and were not included in the County’s FY 2019-20 actual expenditures. Out of the total difference, $128,451 in expenditures will be reported by the County as FY 2020-21 Measure H expenditures. The remaining $661,000 is to be funded by DHS’s General Fund. DMH DMH was allocated $7,059,000 of Measure H funds to be used for the following four strategies: Measure H Strategy Allocation B7 Interim/Bridge Housing for those Exisiting Institutions $ 72,000 Countywide Supplemental Security/Social Security Disability Income and C4/C5/C6 Veterans Benefits Advocacy for People Experiencing Homelessness or At-Risk 1,101,000 of Homelessness D7 Provide Services and Rental Subsidies for Permanent Supportive Housing 5,814,000 E8 Enhance the Emergency Shelter System 72,000 Total $ 7 ,059,000 Under Strategy B7, DMH serves clients with complex health and/or behavioral health conditions who need a higher level of support services than is available in most shelter settings. Interim housing includes stabilization housing and recuperative care. Some interim housing programs provide enhanced onsite mental health services. Under Strategy C4/C5/C6, DMH expands and integrates physical and mental health clinical services to support Countywide Benefits Entitlements Services Team, including technical assistance, training, case consultation, record retrieval services, care coordination and comprehensive evaluations. 12 Under Strategy D7, DMH provides a local rent subsidy to ensure that housing units are affordable to people who are homeless. All strategy D7 clients receive Intensive Case Management Services and is matched to a rental subsidy. Based on client need, clients receive specialty mental health services through the Housing Full Service Partnership Program, in addition to substance use disorder outreach and assessment and service navigation. Under Strategy E8, DMH provides interim housing to serve clients with complex health and/or behavioral health conditions who need a higher level of support services than is available in most shelter settings. DMH’s Measure H expenditures in FY 2019-20 totaled $3,099,547 and were specific for the strategies listed below. No exceptions were found. Measure H Strategy Expenditures B7 Interim/Bridge Housing for those Exisiting Institutions $ 71,203 Countywide Supplemental Security/Social Security Disability Income and C4/C5/C6 Veterans Benefits Advocacy for People Experiencing Homelessness or At-Risk 1,005,613 of Homelessness D7 Provide Services and Rental Subsidies for Permanent Supportive Housing 1,952,068 E8 Enhance the Emergency Shelter System 70,663 Total $ 3 ,099,547 DPH DPH was allocated $9,671,000 of Measure H funds to be used for the following four strategies: Measure H Strategy Allocation B7 Interim/Bridge Housing for those Exisiting Institutions $ 6 ,683,000 D7 Provide Services and Rental Subsidies for Permanent Supportive Housing 1,564,000 E6 Countywide Outreach System 756,000 E8 Enhance the Emergency Shelter System 668,000 Total $ 9 ,671,000 Under Strategy B7, DPH Substance Abuse Prevention and Control (SAPC) Recovery Bridge Housing (RBH) serves individuals who are homeless at treatment discharge and who choose abstinence-based housing for up to 90 days. Under Strategy D7, DPH supports the increase in access to supportive housing by funding high quality tenant services and, when necessary, a local rent subsidy to ensure that housing units are affordable to people who are homeless. Under Strategy E6, DPH develops and implements a plan to leverage current outreach efforts and creates a countywide network of multidisciplinary, integrated street-based teams to identify, engage and connect homeless individuals to interim and/or permanent housing and supportive services. Under Strategy E8, DPH provides support to enhance the Emergency Shelter System. DPH’s Measure H expenditures in FY 2019-20 totaled $8,004,263 and were specific for the strategies listed below. No exceptions were found. 13 Measure H Strategy Expenditures B7 Interim/Bridge Housing for those Exisiting Institutions $ 6 ,683,000 D7 Provide Services and Rental Subsidies for Permanent Supportive Housing 682,479 E6 Countywide Outreach System 246,463 E8 Enhance the Emergency Shelter System 392,321 Total $ 8 ,004,263 DPSS DPSS was allocated $5,138,000 of Measure H funds to be used for Strategy B1 – Provide Subsidized Housing to Homeless Disabled Individuals Pursuing SSI and $4,600,000 of Measure H funds to be used for Strategy C4/C5/C6 – Establish a Countywide SSI Advocacy Program for People Experiencing Homelessness or At-Risk of Homelessness based on the Measure H Expenditure Plan approved by the Board of Supervisors in FY 2019-20. Under Strategy B1, DPSS provides subsidized housing for the homeless and those at risk of homelessness. To be eligible, participants must meet the General Relief “GR” requirements and receive GR funds. Participation in the program is voluntary and the participant is responsible for finding their own housing where the landlord has to agree to the program as well. Once the participant finds housing and has all the required paperwork, the agency verifies that it is a dwelling unit. The agency pays $475/month ($950/month for couple cases) directly to the landlord from Measure H funds and $100 is deducted from the participant’s GR check and also goes towards the rent and is paid directly to the landlord. The maximum amount of rent covered by the agency is $575/month. Any changes to the participant’s housing status is reported to the GR case worker. Under Strategy C4/C5/C6, DPSS will expand and integrate physical and mental health clinical services to support Countywide Benefits Entitlements Services Team, including technical assistance, training, case consultation, record retrieval services, care coordination and comprehensive evaluations. DPSS’ Measure H expenditures in FY 2019-20 totaled $5,138,000 specific for Strategy B1 – Provide Subsidized Housing to Homeless Disabled Individuals Pursuing SSI, and $4,222,607 specific for Strategy C4/C5/C6 – Establish a Countywide SSI Advocacy Program for People Experiencing Homelessness or At-Risk of Homelessness. No exceptions were found. PD PD was allocated $2,941,000 of Measure H funds to be used for Strategy D6 – Criminal Record Clearing Project based on the Measure H Expenditure Plan approved by the Board of Supervisors in FY 2019-20. Under Strategy D6, PD provided field-based service to homeless and formerly homeless adults who have criminal records by connecting them with legal services to assist with record clearing and other legal barriers to achieving stable housing and employment. PD’s Measure H expenditures in FY 2019-20 totaled $2,298,161 and were specific for Strategy D6 – Criminal Record Clearing Project. No exceptions were found. WDACS WDACS was allocated $11,300,000 of Measure H funds to be used for Strategy C7 – Subsidized Employment for Homeless Adults based on the Measure H Expenditure Plan approved by the Board of Supervisors in FY 2019-20. 14 Under Strategy C7, WDACS provided Transitional Employment Services to Los Angeles County residents who experience multiple barriers to employment, including those who are homeless, former offenders and/or disconnected youth (Job Seekers and Participants). Funding for this strategy expands existing workforce development models, such as the Los Angeles Regional Initiative Enterprise, throughout the County to provide transitional subsidized employment services to homeless individuals. WDACS’s Measure H expenditures in FY 2019-20 totaled $6,221,631 for Strategy C7 – Subsidized Employment for Homeless Adults. No exceptions were found. LACDA For the year ended June 30, 2020, the County disbursed to LACDA $14,189,000 for Measure H eligible Homeless Initiative Strategy B4 - Subsidize Housing/Facilitate Utilization of Federal Housing Subsidies to finance the development and preservation of homeless housing through the Commission’s Notice of Funding Availability (NOFA) process and $4,850,000 to be used to support the development and preservation of homeless housing in areas of the County where there is an urgent need for housing under Measure H eligible Homeless Initiative Strategy F7 - Preserve Current Affordable Housing and Promote the Development of Affordable Housing for Homeless Families and Individuals. Of the $14,189,000 amount disbursed for strategy B4, LACDA spent $7,847,377 during fiscal year 2019-20 for Strategy B4 – Subsidize Housing/Facilitate Utilization of Federal Housing Subsidies. The County disbursed $4,850,000 to LACDA in FY 2019-20 for Strategy F7 - Preserve Current Affordable Housing and Promote the Development of Affordable Housing for Homeless Families and Individuals of the Measure H program. LACDA’s Measure H actual expenditures totaled $6,642,407, which comprised of $6,310,998 in capital funding and $151,409 in administrative expenditures under Strategy F7. Carry-over funding from prior year Measure H advance disbursement was used to fund the additional expenditures exceeding the FY 2019-20 disbursement amount. No exceptions were found. LAHSA LAHSA was allocated $270,826,000 of Measure H funds to be used for the following eight strategies: Measure H Strategy Allocation A1 Homeless Prevention Programs for Families $ 11,445,816 A5 Homeless Prevention Programs for Individuals 1 2,210,770 B3 Partner with Cities to Expand Rapid Re-Housing 107,069,033 B7 Interim/Bridge Housing for those Existing Institutions 4,676,000 E6 Countywide Outreach System 1 3,052,652 E7 Strengthen the Coordinated Entry System 3 4,384,953 E8 Enhance the Emergency Shelter System 6 3,546,776 E14 Enhanced Services for Transition Age Youth 2 4,440,000 Total $ 270,826,000 Under Strategy A1, the funding is dedicated to shelter diversion services within Coordinated Entry System (CES) for families. This will allow CES for family providers to have specialized diversion staff and limited financial assistance to help families identify alternative housing arrangements outside the homeless system or return to a community of care outside of Los Angeles County. Under Strategy A5, LAHSA provides screening and a targeted intervention to single adults and youth who are currently at risk of becoming homeless and have been screened and identified as having high risk factors. 15 Under Strategy B3, LAHSA provides time-limited intervention, including financial assistance/subsidies and supportive services so that participants will be able to successfully maintain housing without long-term assistance. Under Strategy B7, LAHSA increases the bed rate for these shelters specifically reserved for people exiting institutions allows for a specialized level of care at the facilities. These are safe, reserved, low- barrier and supportive 24-hour interim housing beds for persons exiting institutions but who are not in need of specialized and high-level care. Under Strategy E6, LAHSA aims at improving outreach efforts to homeless individuals and families on the streets and in encampments in Los Angeles County. LAHSA developed a dispatch and tracking technology infrastructure for outreach requests, expanded Service Planning Area (SPA)-level and macro coordination of outreach teams through Coordinated Entry System Outreach Coordinators, launch and implemented Multidisciplinary Outreach teams to better assist unsheltered homeless individuals through expanded multidisciplinary outreach capacity, and support and expand general outreach staffing in all SPAs to further support outreach bandwidth. Under Strategy E7, with the implementation of the Coordinated Entry System, all people in need of housing and services can be screened, triaged, and connected to resources, based upon service need and availability. LAHSA will expand regional coordination for each population system, create domestic violence liaisons, expand housing navigation, create housing location program, create training academy and provisions of technical assistance to agencies, create legal services system, and create a representative payee program. Under Strategy E8, LAHSA increases the bed rate for LAHSA’s existing shelters allow for higher quality services in the shelters resulting in better outcomes. Adding beds to the system decreases the gap in shelter services and these safe, low-barrier and supportive 24-hour crisis housing beds are designed to facilitate permanent housing placement. Under Strategy E14, the funding will expand and enhance the resources to house and serve transitional age youth experiencing homelessness. The County disbursed $210,039,311 to LAHSA in FY 2019-20, and LAHSA’s Measure H expenditures in FY 2019-20 totaled $215,063,750 and were specific for the strategies listed below. No exceptions were found. Measure H Measure H Disbursement by Actual Strategy County Expenditures Difference A1 Homeless Prevention Programs for Families $ 6 ,989,525 $ 7 ,289,352 $ (299,827) A5 Homeless Prevention Programs for Individuals 9,220,912 9,275,196 (54,284) B3 Partner with Cities to Expand Rapid Re-Housing 7 2,518,548 7 8,480,244 (5,961,696) B7 Interim/Bridge Housing for those Existing Institutions 4,531,044 4,513,957 17,087 E6 Countywide Outreach System 1 0,244,879 1 0,615,437 (370,558) E7 Strengthen the Coordinated Entry System 2 8,505,860 2 8,967,489 (461,629) E8 Enhance the Emergency Shelter System 5 9,530,478 5 6,723,882 2,806,596 E14 Enhanced Services for Transition Age Youth 1 8,498,065 1 9,198,193 (700,128) Total $ 210,039,311 $ 215,063,750 $ (5,024,439) The $5,024,439 difference represents fourth quarter subcontractor expenditures which were submitted late and were not included in the County’s FY 2019-20 actual expenditures. These expenditures will be reported by the County as FY 2020-21 Measure H expenditures. 16 LASD LASD was allocated $465,000 of Measure H funds to be used for Strategy D2 – Expansion of Jail In- Reach based on the Measure H Expenditure Plan approved by the Board of Supervisors in FY 2019- 20. Under Strategy D2, LASD expands Jail In-Reach to make it available to all homeless people incarcerated in a Los Angeles County jail. LASD’s Measure H expenditures in FY 2019-20 totaled $431,330 and were specific for Strategy D2 – Expansion of Jail In-Reach. No exceptions were found. 4. We verified that the service levels reported for each Department and Agency are accurate and that the funds were used for the specific purpose of each strategy. Results CEO Based on our procedures performed for the one month of payroll/administrative expenditures and 25 transactions of non-payroll/program expenditures selected, the service levels reported by CEO were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. DCFS Based on our procedures performed for the 25 transactions of non-payroll/subcontractor expenditures selected, the service levels reported by DCFS were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. DHS For the one month of payroll expenditures, 33 non-payroll reimbursement contract expenditures, and 7 non-payroll fee-for-service expenditures selected, the service levels reported by DHS were accurate and the funds were used for the specific purpose of the Measure H strategies. No exceptions were found. DMH Based on our procedures performed for the two months of payroll expenditures and four subcontractor expenditures selected, the service levels reported by DMH were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. DPH For the two months of payroll expenditures, 4 non-payroll contractor expenditures, and 36 non-payroll recipient expenditures selected, the service levels reported by DPH were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. DPSS For the one month of payroll expenditures, 22 transactions of non-payroll expenditures and 18 transactions of subcontractor’s cost selected, the service levels reported by DPSS were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. 17 PD For the two months of payroll expenditures and nine transactions of non-payroll/subcontractor expenditures selected, the service levels reported by PD were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. WDACS For the two months of payroll expenditures and 25 transactions of subcontractor expenditures selected, the service levels reported by WDACS were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. LACDA Based on our procedures performed for the one month of payroll expenditures and 40 transactions of non-payroll expenditures selected, the service levels reported by LACDA were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. LAHSA For the one month of payroll expenditures and 60 non-payroll/subcontractor expenditures/expenditures selected, the service levels reported by LAHSA were accurate and the funds were used for the specific purpose of the Measure H strategies. No exceptions were found. LASD For the two months of payroll expenditures selected, the service levels reported by LASD were accurate and the funds were used for the specific purpose of the Measure H strategy. No exceptions were found. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively on the eleven County Departments’ and outside agencies’ compliance with the Measure H, Ordinance 2017-001, Chapter 4.73 to the Los Angeles County Code – Transaction and Use Tax to Prevent and Combat Homelessness for the year ended June 30, 2020. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the County of Los Angeles and the Chief Executive Office, the Department of Children and Family Services, the Department of Health Services, the Department of Mental Health, the Department of Public Health, the Department of Public Social Services, Public Defender, Workforce Development, Aging and Community Services, the Los Angeles Community Development Authority, the Los Angeles Homeless Services Authority, and the Los Angeles Sheriff’s Department and is not intended to be, and should not be used by anyone other than these specified parties. Torrance, CA November 30, 2020 18