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Seattle’s homelessness response system is under intense fire after a forensic audit revealed staggering financial breakdowns, including $13 million in unaccounted public funds and a deepening multimillion-dollar deficit. Top city and county leaders are now openly calling for drastic action, including dismantling the agency at the center of the crisis.

The findings have ignited political outrage, raising urgent questions about oversight, accountability, and how hundreds of millions in public dollars were managed.

Seattle and King County Face Fallout Over Homelessness Authority Finances

A forensic evaluation commissioned in August 2025 by the City of Seattle and King County examined the King County Regional Homelessness Authority (KCRHA) from its creation through mid-2025. The review was conducted by a Bellevue-based accounting firm and followed growing concerns over leadership instability, delayed payments, state auditor findings, unverified accounting practices, and ongoing cash flow problems.

The results paint a severe financial picture.

The agency reported a $44.7 million negative cash position that accumulated from December 2023 through July 31, 2025. It also recorded an administrative operating deficit of about $4.26 million, including roughly $1.26 million in interest charges that are not expected to be recovered.

According to the Mayor’s office, the evaluation also found the agency could not account for about $13 million in public funds.

Massive Public Spending Under Scrutiny

Budget records from 2022 through 2024 show Seattle and King County contributed more than $260 million to the homelessness authority.

That investment reached as high as $113 million from the City of Seattle in 2024 alone, intensifying frustration among elected officials after the audit’s release.

Political Shock Turns Into Calls for Dismantling Agency

Seattle Councilmember Maritza Rivera sharply criticized the findings and called for the agency to be shut down.

"It shows an egregious mismanagement of funds and an unacceptable lack of financial accountability,” Rivera said in a statement. “KCRHA has a history of dysfunction and inefficiency, and it is time to acknowledge that it has failed in its mission."

Rivera urged Mayor Katie Wilson to present a plan to dismantle the agency and coordinate next steps with the Seattle City Council on homelessness response. She also renewed her push for a separate audit of city human services contracts.

King County Councilman Rod Dembowski echoed that position and pointed to long-standing skepticism about the agency’s structure.

"I was a skeptic of establishing the Regional Homelessness Authority from the beginning and successfully fought to amend the authorizing legislation to ensure that elected officials would remain in control and would oversee its budgets, and that it could be shut down if it failed. It’s now time for elected officials to bring this failed experiment to an end."

Mayor Signals Urgent Action as Pressure Mounts

Mayor Katie Wilson acknowledged the seriousness of the findings and indicated major changes are being considered.

"Addressing homelessness is my highest priority, and I have serious concerns about KCRHA’s management of city funds,” Wilson said in a statement. “We need to take swift action to protect public dollars. All options are on the table."

Audit Described as “Damning” by Council Leadership

Seattle City Councilmember Bob Kettle, who chairs the Public Safety Committee, described the audit results as a systemic leadership failure.

"The results of the recent King County Regional Homelessness Authority audit are damning," Kettle said. "It shows an epic, and consistent, failure of leadership at the top of the agency —especially at its start. It also reveals the failure of leadership of the county and city. The audit reveals troubling systemic issues that can no longer be ignored if we are to address the homelessness and public safety crisis in Seattle effectively."

Kettle called for stronger financial oversight while still supporting a coordinated regional response.

"We have a regional homelessness problem on the streets of Seattle,” Kettle said. “We need a unified, countywide approach that operates with a defined purpose, compassion, and accountability.”

Council Members Warn of Missed Opportunities

Seattle City Councilmembers Alexis Mercedes-Rinck and Dionne Foster, who serve on the KCRHA Governing Board, issued a joint statement emphasizing both accountability and the continued need for regional coordination.

"Every misstep revealed in this audit represents another missed opportunity to prevent further trauma in our streets and neighborhoods across the region. At the same time, the homelessness emergency continues to demand strong regional coordination to ensure an effective response across Seattle and King County."

County and City Move to Tighten Oversight

King County Executive Girmay Zahilay said the audit raises serious concerns about financial management and accountability. He confirmed that the county and city have already issued a corrective action letter and will increase oversight moving forward.

Both Zahilay and Mayor Wilson signed a directive to the KCRHA chief financial officer demanding a written response outlining how the agency will address multiple high-risk findings.

The agencies also set a May 23, 2026 deadline for a detailed corrective action plan with implementation timelines.

Four Major Reforms Recommended

City and county leaders also outlined immediate steps for the agency’s governing board:

• Establish a financial oversight committee that meets biweekly and reports monthly
• Implement an immediate hiring freeze with a documented exception process
• Freeze discretionary spending until lifted by the board
• Pause any new agreements that increase costs or liability

As political pressure escalates, the future of Seattle’s regional homelessness system now hangs in the balance, with leaders divided between reform, overhaul, and full dismantling of the agency tasked with addressing one of the region’s most urgent crises.