Seattle leaders demand accountability for mismanaged homelessness funds

SEATTLE - As Seattle and King County councilmembers call for the King County Regional Homelessness Authority (KCRHA) to be dissolved, questions loom about whether the mismanaged millions could turn into a criminal investigation.

A forensic evaluation examined KCRHA’s financial practices from its inception through July 2025, including cash management, internal controls and compliance. Officials say the findings point to systemic issues — not confirmed fraud — but significant weaknesses in how public funds were tracked and managed.

According to the audit, KCRHA faced a negative cash position of roughly $44.7 million at one point, meaning they were spending before they were reimbursed and delays in payments. Other financial discrepancies include:

• "Approximately $8M…not been fully matched"
• "$4.26M in administrative overspend"
• "$1.26M" in growing interest costs

With millions unaccounted for, local leaders are furious. There's no doubt taxpayers are as well.

What they're saying:

At least one King County councilmember said the records make it tough to match anything.

"It's outrageous and people, taxpayers should be angry about it. I'm angry about it," King County Councilmember Rod Dembowksi said.

As Dembowski calls for the King County Regional Homelessness Authority to be dissolved, there's a question of where this could go next.

FOX 13 Seattle asked if the forensic audit finding $13 million unaccounted for could lead to a criminal investigation.

"The latest audit said the state of the records was so poor that while they didn't find any fraud, they couldn't be sure that there wasn't any fraud," Dembowski said.

City Councilmember Alexis Mercedes Rinck, who worked for the KCRHA for years, released a joint statement with City Councilmember Dionne Foster that said in part, "The findings are serious, unacceptable and demand immediate action."

Intense scrutiny is only growing.

"We need to make sure that the money we allocate for that is actually going to house folks and help folks," City Councilmember Maritza Rivera said during a press conference on Thursday.

Mayor Katie Wilson said the city is pursuing "immediate corrective action".

In a statement, King County Executive Girmay Zahilay said in part, "Solving King County's significant homelessness crisis requires honesty."

Whether it's a case of bad accounting or something worse, Dembowski said you're paying the price.

"We've seen a lack of oversight, but I, at least to date, the documents in the audit seem to point to incompetence rather than mal-intent," he said.

What's next:

In the meantime, leaders say additional oversight measures are under consideration, including improving accounting systems, addressing inconsistencies in financial reporting and tackling administrative overspending.

They also recommended steps such as a hiring freeze, limits on discretionary spending and pausing new agreements that could increase costs.

The other side:

In an email to the agency’s governing board, KCRHA CEO Kelly Kinnison said the audit findings are largely tied to the organization’s early formation.

"The findings are concentrated in KCRHA’s early formation period," Kinnison wrote, citing "structural challenges associated with startup conditions, the pandemic response… and a highly complex funding model."

Kinnison emphasized that "the audit did not identify evidence of fraud or misuse of funds."

She said the $8 million identified in the report reflects services that were delivered but still require reconciliation in the accounting system, and that "a substantial portion has already been identified and is progressing toward resolution."

Kinnison also said the reported overspending reflects "budget reclassification and alignment" rather than improper spending, and that financial systems "have also improved, though additional strengthening is still needed."

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