Seattle, King County to ‘restructure’ KCRHA after disastrous audit

SEATTLE - Seattle and King County will be "restructuring" the long-troubled King County Regional Homelessness Authority, after an investigation found the agency was unable to account for $13 million in public funds.

King County Executive Girmay Zahilay and Seattle Mayor Katie Wilson announced a three-step plan to "stabilize" and "reset" KCRHA.

The move comes after an independent forensic evaluation in April that uncovered serious problems regarding how the agency manages its finances, its internal controls, and its governance structure.

"We're taking decisive action to address KCRHA's challenges while maintaining the continuity of the critical services they administer," said Wilson. "The steps we're taking today will let the agency focus on rebuilding public trust, making a strong application for federal funding, and helping our city and region deliver better outcomes for people experiencing homelessness."

During a press conference on Wednesday, both leaders said Seattle and the county will be taking back local control of homeless spending, pushing for a major dial back of KCRHA. 

"KCRHA was created because homelessness is a regional challenge, and I continue to believe a regional response is the right approach," said Zahilay. "But believing in a regional response also means making sure it works. After years of leadership turnover, multiple audits, and an independent forensic evaluation, it became clear that changes were needed. Today's actions are about stabilizing KCRHA, right sizing its focus on the work it is best positioned to lead, and resetting the future vision of our system."

Restructuring KCRHA after disastrous audit

According to officials, the agency already submitted a corrective action plan on May 22 to address all the findings of the audit.

The city and county will embed a financial watchdog firm in the agency through the end of the year to keep an eye on bills, spending and service providers.

 The agency manages some $200 million in local, state and federal funds every year.

If Wilson and Zahilay's proposals are approved by county and city council members later this year, the agency will be downsized from a lot of responsibilities and staffing will be cut starting next year. 

Local homeless service provider contracts will be moved back to city and county departments with KCRHA tasked with handling only federal funds tied to HUD's "Continuum of Care" program.

Federal dollars amount to around $67 million for KCRHA and the agency will conduct the federally mandated Point In Time Count. They will also be tasked with providing shelter space during weather emergencies.

After the announcement King County Council Member Reagan Dunn says although he commends Wilson and Zahilay he believes the move is not going far enough.

"Ultimately the county must reverse course on its failed policies if we want to truly reduce homelessness and match the progress made in other regions," Dunn said. 

As of now, both Zahilay and Wilson say there will be no complete dissolution.

What we don't know:

While the city and county have confirmed that an independent financial monitoring firm will take over internal oversight at the agency starting in July, officials have not released the name of the specific firm selected for the role.

What they're saying:

Local officials and community leaders expressed a mix of opinions on the new plan while expressing a sense of urgency.

City Council Member Robert Kettle had reservations over the current plan saying a regional approach was still the best.

"To abandon the regional approach now would place us back to square one, increase our costs in a time of fiscal constraint, lose the investments we've made, forego our governance reforms, and put in further jeopardy federal funding," Kettle said.

KCRHA CEO telling reporters after the announcement that millions have been invested into data hubs and mapping capabilities and that a complete dissolution would be detrimental. But she also acknowledged the agency did not meet expectations.

"It is a failed experiment and I think we need to do something different," Dr. Kelly Kinnison said

Kinnison has been on the job for less than two years and she says the agency was not given resources and the commitment from local leaders from the start but she says changes were being made under her watch.

But the rate of homelessness has only gone up under KCRHA. From 2024 to 2026 the overall numbers went up by 9% with a 21% increase for unsheltered people during that time span.

"We have seen another significant increase, especially in our rates of unsheltered homelessness, which we should all feel is unacceptable and feel a real urgency around addressing that fact," Mayor Wilson said.

Local leaders celebrate move to restructure KCRHA

"The growing challenges in downtown Seattle and across King County make it clear that a reset is needed," said Downtown Seattle Association CEO Jon Scholes. "Most importantly, this effort must restore public confidence that our local governments can work together to produce meaningful, measurable results."

Seattle City Councilmember Maritza Rivera and King County Councilmember Rod Dembowski issued a joint statement praising the city and county's move to restructure KCRHA:

"Consistent with our joint call to wind down the KCRHA, we support Mayor Wilson and Executive Zahilay taking the first step by returning the bulk of the homeless service provider contracts to the City and the County. We stand ready to support their efforts and will work to ensure no interruption in services for our unhoused neighbors in need.  

"While this is not a complete dissolution of the Regional Homelessness Authority that we may have called for, it is a major step in the right direction.  

"This is a much-needed reset of how we manage our homelessness response. As recent reports have shown, the County’s unsheltered population continues to grow. We must now turn our efforts to assessing what changes are needed to make our response more effective. All options should be on the table. We can and must do better. Hard decisions lie ahead if we are serious about changing the trend lines on this challenge. We stand ready to make them.  

"We look forward to hearing more from the Mayor and the Executive on next steps and how the City and the County will continue to partner with stakeholders County-wide. We believe today’s announcement is an important step in the right direction to ensure we are meeting the needs of those who are living unsheltered, while also ensuring accountability for our tax dollars."

Rivera and Dembowski previously voted to disassemble the homelessness agency.

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