Leaders of the King County Regional Homelessness Authority (KCRHA) appeared before the King County Council on Thursday to address concerns regarding approximately $17 million in missing funds. This meeting followed an outside audit that concluded about $16.7 million in agency funds may never be recovered.
Councilmember and Budget Chair Rod Dembowski confirmed his concerns after the meeting, stating that the KCRHA overspent by $16.7 million in administration and interest, which he anticipates will require a bailout. Dembowski attributed part of this financial predicament to the agency's failure to hire appropriate accounting and finance personnel to manage its operations.
The financial issues were first brought to light by an audit prepared by Turning Point Strategic Advisors for Seattle and King County. While the assessment did not identify fraud, it pinpointed "chronic financial mismanagement" as the cause for the missing money. Turning Point reported that the KCRHA overspent on various operating costs, including administrative expenses, legal fees, and an expensive Salesforce software system intended for managing invoices and requests for proposals.
William Towey, KCRHA Chief Operating Officer, acknowledged the "disturbing and discomforting situation" and explained that part of the problem stemmed from providers of homeless services significantly underspending their allocations. This underspending meant the agency never collected its anticipated grant dollars.
In response to these findings, Councilmember Dembowski is once again advocating for the dissolution of the agency. He expressed concern that allowing the KCRHA to continue could lead to persistent problems, and he questioned its value in addressing homelessness through policy and funding. This marks the second time within a week that Dembowski has pushed for the agency's dissolution.
However, King County Executive Girmay Zahilay has cautioned against dissolving the KCRHA, warning that such a move could jeopardize state and federal funding. Zahilay cited potentially at risk funds, specifying "60-some odd millions of dollars that are coming through continuum of care funds that go on to house 4,000 people in this region."
As a step toward addressing the issues, King County Executive Zahilay and Seattle Mayor Katie Wilson have announced a restructuring plan. Under this plan, the city and county will assume responsibility for the majority of the service contracts, effective January 1. This change aims to bring greater oversight and stability to the management of these vital services.
When asked about new protections or audits to prevent similar mistakes, Dembowski highlighted the existing oversight mechanisms. He noted the roles of the King County auditor, the executive side audit and accountability functions, and the recently established inspector general as safeguards. The King County executive’s office is currently developing what it terms a “regional reset” for its approach to homelessness, with more details anticipated in the coming weeks.
The KCRHA has stated its commitment to rebuilding its internal accounting systems and has pledged to provide monthly financial reports to the county council. Turning Point Strategic Advisors is also expected to deliver a final report on the KCRHA's financial books for 2026 in early 2027, which will offer further insights into the agency's fiscal health and management practices.