King County Council moves to dissolve KCRHA, add oversight watchdog

SEATTLE - The King County Council is moving to dissolve the King County Regional Homelessness Authority (KCRHA) and establish a new independent watchdog following a series of audits and reports detailing millions in unaccounted funds and internal fraud.

Legislation introduced Tuesday would begin a 90-day process to dismantle the KCRHA, an agency formed in 2021 to unify the region’s response to homelessness. The move comes as a new forensic investigation revealed a "crumbling foundation," showing the agency has $13 million in unaccounted funds—including $8 million in unmatched funds and $4.26 million in overspending.

Councilmember Rod Dembowski, a primary sponsor of the legislation, said the agency’s failure to produce results has reached a breaking point.

"The problem of unsheltered people has gotten twice as bad in the six years that they've been around. So it's not working. And I think when something isn't working, you're in a hole. Stop digging. We've got to shut that down," Dembowski said.

Financial instability at KCRHA

By the numbers:

Since its inception, the KCRHA has received nearly $534 million. However, recent audit results from Clark Nuber raised serious questions regarding the agency’s financial health, at one point showing the organization was in debt by nearly $45 million.

While KCRHA CEO Kelly Kinnison told the governing board on Friday that the report did not find evidence of fraud, Dembowski noted that the agency remains roughly $38 million in the red.

"If you have a checkbook, imagine one being $38 million in the red. They're overdrawn," Dembowski said. "I do not want County taxpayers left holding the bag."

The dissolution process is expected to take between 90 and 120 days to ensure that more than 200 service contracts and federal grants are not disrupted, preventing a "knee-jerk reaction" that could leave vulnerable populations without care.

New Inspector General to tackle fraud

The other side:

In a separate but related move, the Council is fast-tracking Proposed Ordinance No. 2026-0101 to create an Inspector General division. The office would have the power to subpoena witnesses and recover stolen public funds.

The push for a new watchdog follows a Seattle Times investigation into the Department of Community and Human Services (DCHS). The report alleged that a program manager, Yolanda McGhee, funneled roughly $813,000 to family members through subcontracts.

"It is going to cost a little money on the inspector general to set that up, but the studies show, again, when you look at these IG offices around the country, generally, they pay for themselves," Dembowski said. "One, on the prevention side, because folks know if there's someone watching, there's going to be accountability... and two on the recovery part."

Path forward

What's next:

The Inspector General legislation currently has five co-sponsors, including Councilmembers Reagan Dunn, Sarah Perry, and Pete von Reichbauer, ensuring enough support for passage.

While some leaders, including King County Executive Girmay Zahilay, have urged caution regarding the immediate shutdown of the KCRHA to avoid service gaps, Dembowski insists the current model is unsustainable.

"We have budgeting authority, we have legislative authority. We have oversight authority. We don't run the day-to-day operations of the government," Dembowski said. "Our job is to try and prevent it, and then if it occurs, find out about it and hold people accountable."

The Inspector General's Office is expected to be funded and operational within the next 45 days.

A final report on the methodical shutdown of the KCRHA is expected by August.

MORE NEWS FROM FOX 13 SEATTLE

Homeowner shoots suspect during home invasion in Kent

Seattle police arrest felon after Capitol Hill bike dispute sparks gunfire

Skydiving Kirkland woman finds 'freedom' from quadriplegia, breaks record

Renton police boost patrols at park following recent shootings

2 motorcyclists killed at same spot 1 week apart in Pierce County

To get the best local news, weather and sports in Seattle for free, sign up for the daily FOX Seattle Newsletter.

Download the free FOX LOCAL app for mobile in the Apple App Store or Google Play Store for live Seattle news, top stories, weather updates and more local and national news.

Homelessness CrisisKing CountyNews