Seattle mayor has 'serious concerns' for homelessness agency after audit

In the wake of a new forensic audit commissioned by Seattle and King County, Seattle Mayor Katie Wilson said she has “serious concerns” about financial management at the troubled King County Regional Homelessness Authority, and that “all options are on the table.”

Wilson said in her statement that the audit flagged $13 million in funds that could not be accounted for. It wasn’t immediately clear where that figure came from. The audit, which spanned 2021 - 2025, did flag $8 million that “could not be reconciled,” and said the authority reached a “negative cash position” of $44.7 million as of July 31, 2025.

The audit said, “from inception through July 31, 2025, KCRHA received a total of $533.9 million in funding from all sources.”

King County Executive Girmay Zahilay said the county and the city of Seattle would take on closer oversight of the regional agency. He issued a "letter of expectations" outlining what he said were immediate, concrete steps to stabilize the agency and maintain continuity of service. It was co-signed with Mayor Wilson.

The independent audit was performed by the Bellevue-based firm Clark Nuber. It tracked the financial condition, governance, and risk management practices at the agency.

The audit concluded that “weak internal controls” were a recurring theme at KCRHA.

“Weaknesses remain in the current state, including issues related to process workflows, accounting methodology and reporting transparency, invoicing and receivables management, budgeting management, reliable supporting documentation, governance and oversight, and effectiveness of internal controls," the auditors wrote, in part.

Mayor Wilson said the city will be pursuing immediate corrective action.

“Addressing homelessness is my highest priority, and I have serious concerns about KCRHA’s management of city funds," she said.

City Councilmember Maritza Rivera went even farther, calling for an end to the regional effort.

“I am calling for Mayor Wilson to provide a plan for the dismantling of KCRHA as soon as possible, and a commitment to work with City Council to determine how Seattle will move forward in meeting its shelter and housing needs," Rivera said in a statement.

Councilmember Bob Kettle called the audit “damning” but stopped far short of saying the authority should be broken up. Instead Kettle said the city and county bore some of the blame for failures in leadership. He said the authority’s foundation was flawed, but at this point the partners should “pivot toward the future,” with improved oversight and a “unified, countywide approach.”

These dramatic statements came before the public or the homelessness agency itself had even seen the audit. A spokesperson for the Authority said they were only given a high-level overview ahead of time. In a letter to her board, agency CEO Kelly Kinnison emphasized that the audit did not identify evidence of fraud or misuse of funds. Kinnison said she was hired in 2024 to strengthen its management and is committed to doing so.

Kinnison also explained that the missing $8 million "relate to services that were delivered but require further reconciliation within the accounting system. Work is actively underway, and a substantial portion has already been identified and is progressing toward resolution."

She noted that the agency appeared to be in the red partly because of its reimbursement funding model, "where providers are paid in advance, and reimbursement to KCRHA follows ." But she also said that "gaps in earlier financial processes" were to blame too.

The KCRHA was created under the tenures of former County Executive Dow Constantine and former Seattle Mayor Jenny Durkan and began operations in 2021. It was meant to function as a partnership agency among Seattle, King County, and other cities, as an effort to unify and coordinate what had been a fragmented response to homelessness in the region.

Zahilay said the audit raises "serious, concerning questions." His letter said among other corrective measures, the authority will be required to ensure appropriate approvals for employee reimbursements and also for gift cards. The letter said, "Potentially unallowable or inappropriate employee reimbursements have been paid that were not reviewed or authorized. Additionally, given the cash-equivalent nature of gift cards, incomplete or inconsistent tracking and documentation increases exposure to potential fraud, waste, and abuse."

In May, the KCRHA must provide a written response and corrective action plan.

The KCRHA governing board is scheduled to meet this Friday at the Seattle Public Library downtown. That board includes Mayor Wilson, King County Executive Girmay Zahilay and other elected officials as well as government appointees.

At that meeting Zahilay and Wilson's letter says they will recommend a freeze on hiring and discretionary spending at the KCRHA.