Seattle and King County Spent $260 Million on Homelessness.
The Audit Found a $45M Hole and $13M Just… Missing.

The cash position: negative $44.7 million. KCRHA was bleeding cash, structurally, across the audit window. Expenditures consistently outpaced reimbursements and funding inflows — the agency was paying out faster than the cities and county were sending money in, and never closed the gap.

The $13 million in unaccounted funds breaks into three pieces:

· $8.0 million in unreconciled receivables.Money the agency’s books say is incoming, but with no clean trail back to the contracts and invoices that should generate it.

· $4.26 million in administrative overspend in 2025 alone. The administrative budget was exceeded; the overrun was not pre-approved by the board.

· $1.26 million in King County investment-pool interest.KCRHA owes the County interest on cash advances and has not paid it. That is real money owed to county taxpayers and not in the agency’s current budget.

P-card discipline: zero. 100% of sampled corporate-purchase-card transactions contained compliance exceptions. $1.1 million in P-card spending bypassed normal contract and reimbursement processes — large housing payments charged on the equivalent of a corporate credit card instead of going through the contracting workflow.

Gift cards with no recipients: $36,700 in MasterCard gift cards purchased by the agency, intended for survey participants in the Point-In-Time count of homeless residents. Cash-equivalent. No documented recipients. The audit flags this as “elevated exposure to fraud, waste, and abuse.”

Internal controls: auditors flagged “significant exceptions and gaps” including segregation-of-duties failures — the same individuals had system permissions to initiate, approve, and post transactions. No formal monthly close. No standardized internal reporting. Records often “lacked sufficient detail to readily trace transactions or balances.”

What the audit does not say: Clark Nuber does not conclude fraud occurred. It documents the absence of controls of a magnitude that would make fraud, if it occurred, undetectable. That distinction matters legally; it does not change the policy posture.

2019 — the interlocal agreement. Seattle Mayor Jenny Durkan (D) and King County Executive Dow Constantine (D)sign the interlocal agreement creating KCRHA. The premise: pool the city’s and county’s homeless-services spend into a single regional authority with one CEO, one budget, one accountability surface. The premise was reasonable. The execution is what the audit is about.

2021 — Marc Dones is named founding CEO. Dones, previously a homelessness-policy consultant whose firm wrote the framework KCRHA was built on, takes the chief executive role.

2022 — the $11 billion plan. Dones releases a five-year plan calling for $11 billion in investment to end homelessness in the region. Local leaders — including the same Seattle and King County officials who chartered the agency — reject the plan as wildly above the region’s funding capacity.

May 2023 — Dones resigns. Two years in. The $11B plan in limbo. KCRHA nonprofits report being paid months late and sometimes not at all. Dones’ resignation letter cites burnout. Last day: June 16, 2023.

July 2023 — the $250-an-hour follow-on. Six weeks after his KCRHA resignation, the City of Seattle retains Marc Dones as a paid consultant at $250 per hour. Same person. New invoice. Real Change News.

August 2024 — Kelly Kinnison takes over. Dr. Kelly Kinnison, former Director of Family and Community Policy at the U.S. Department of Health and Human Services ASPE office and a former branch chief at USDA Food and Nutrition Service, becomes permanent CEO. The audit window covers her first 11 months on the job; most of the documented issues precede her tenure.

August 2025 — Seattle and King County commission the forensic audit. The decision to bring in Clark Nuber is itself an admission that the agency’s own books cannot be trusted to answer routine financial questions.

April 22, 2026 — the audit drops. Same day, Seattle Councilmember Maritza Rivera (D) and King County Councilmember Rod Dembowski (D) hold a joint City Hall press conference announcing companion resolutions to dissolve the authority.

$260 million is the combined Seattle + King County contribution to KCRHAfrom launch through the audit cut-off (per PubliCola, citing the Mayor’s office). It is not a small number. It is roughly:

· ~2,600 small studio apartments at $100K each in build-cost. (Realistic Pacific Northwest construction is closer to $300K-$500K per unit at full supportive-housing build; the bare-shelter cost is meaningfully lower. The point: $260M is permanent-housing money, not pamphlets.)

· About 5,200 tiny-home village placements at the ~$50K-per-shelter cost reported by Low Income Housing Institute, the largest tiny-home operator in the region. (LIHI is one of the nonprofits KCRHA pays to actually run shelter.)

· Roughly six years of payrollfor the entire Seattle Police Department’s patrol unit at a typical patrol-officer fully-loaded comp.

For comparison, the same audit window: KCRHA cleared 14 homeless encampments while 414 others spread across Seattle alone. The agency handed unlimited vacation to employees on six-figure salaries. The King County homeless count rose to its all-time high of 16,868.

The structural question this audit puts on the table: Was “regional authority” the wrong governance model for this problem from the start, or was the right model but executed by leadership that did not impose ordinary accounting discipline? The Rivera-Dembowski resolutions argue the first. Mayor and County response argue the second. The audit itself is silent on the policy choice; it documents only that whatever the chosen model is, it cannot be run without basic controls.

The state-level spending pattern: per RealClearInvestigations’ Waste of the Day audit of Washington homelessness spending, the state has spent $5 billion on homelessness prevention over the last 12 years.

The trend that money is supposed to bend: Washington had 126,091 homeless people in January 2016. By January 2025: 158,791. A 26%increase. Washington’s total population grew only 9% over the same period. Homelessness is outpacing population growth, in the state, by a factor of nearly three.

What the spending bought in payroll alone: Washington’s Department of Commerce, which coordinates the state homelessness response, paid $64 million in payroll last year. 142 Commerce employeesearned at least $100,000. Director Michael Fong made $217,400 — the first person at the agency to clear $200,000.

The pattern the audit fits inside: KCRHA’s $44.7M hole and $13M unaccounted are not anomalies. They are the local-government tier of a state-level spending pattern in which more money is spent each year on homelessness and the homeless population grows anyway. The federal cap on this problem is real: housing-cost dynamics matter; mental-health and addiction infrastructure matters; encampment-clearance and treatment-mandate policy matters. None of those are accounting failures. KCRHA’s is. The accounting failure is the part the audit can resolve.

Path A — dissolve and re-absorb. Seattle and King County terminate the interlocal agreement under its own termination clause (either party may terminate by resolution of its legislative body). City and County homelessness work returns to direct municipal/county departments — the model Mayor Bruce Harrell (D) already partially restored when his administration clawed back outreach and prevention work from KCRHA on grounds the authority “did not have the capacity” to run them. This is the Rivera-Dembowski resolution.

Path B — restructure in place. KCRHA submits a corrective-action plan by May 23, 2026 (deadline already set). Board appoints a permanent CFO, files monthly close packages, reconciles receivables, repays the $1.26M in interest owed to King County, freezes hiring (already underway), deactivates non-essential P-cards (5 of 7 already deactivated April 28). New board independence rules. Hard cap on outside-consultant spending. Annual independent audits going forward as a condition of any new funding.

Path C — the 90-day review answer. The King County Council’s April 22 unanimous vote orders a 90-day review of the authority. By late July 2026, the Council will have a recommendation: continue, amend, or terminate the County’s participation. The County Council will take up the dissolution motion in August.

What the audit forces — regardless of path: any continuing federal, state, city, or county dollar that flows through KCRHA needs to flow through controls that produce a defensible trail. No more gift cards without recipient logs. No more P-card workarounds for contract spending. No more interim-CFO contracts at double permanent-CFO rates. No more unilateral admin-budget overruns. None of that is partisan. None of that is hard. The audit’s value is that it has documented what failure looks like in enough specificity that the corrective action is no longer abstract.

The thing the audit does not solve: the homelessness numbers themselves. 16,868 people in King County. 158,791 statewide. Whichever path the city and county pick — new authority, restored departments, hybrid — the underlying crisis does not get smaller because the books get cleaner. It just becomes possible, for the first time in six years, to know whether the money is actually being spent on the problem it’s being raised against.