KCRHA board institutes hiring freeze, finance committee as audit suggests millions missing

SEATTLE — The King County Regional Homelessness Authority’s governing board approved a hiring freeze on Friday and ordered a finance committee review after an audit revealed millions of dollars in unaccounted taxpayer funds.

The vote came late Friday afternoon amid growing calls to disband the agency.

RELATED: City, county councilmembers move to dissolve KCRHA after audit flags $13M unaccounted for

KCRHA CEO Kelly Kinnison told the board there are “no missing funds,” despite the audit indicating about $13 million could not be accounted for. The report also found the agency lacked a chief financial officer, had missing receipts, and allowed purchasing card use with little oversight.

Mike Nurse, a certified fraud examiner with Clark Nuber, detailed the independent audit during a presentation that lasted more than an hour. He said the agency’s structure as a “pass-through entity” for the city and county, combined with weak internal controls, contributed to financial issues, including a negative cash balance and funds that may not be recoverable.

The governing board is co-chaired by King County Executive Girmay Zahilay and Seattle Mayor Katie Wilson. Wilson attended the meeting remotely and briefly addressed the board, reiterating earlier comments that all options remain on the table.

Wilson declined to comment when approached by a reporter earlier Friday.

Zahilay led much of the discussion, and the board unanimously approved the finance committee review. Wilson’s office, represented by Deputy Mayor Brian Surratt, supported the measure, including the addition of a hiring freeze.

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Just 24 hours earlier, Seattle City Councilmember Maritza Rivera and King County Councilmember Rod Dembowski announced they were sponsoring a joint resolution to eliminate the KCRHA and unwind the agency over the course of the next year.

Zahilay did not go that far when asked about the possibility on Friday.

“This is not a light switch that can be turned on and off,” he said. “We have to think through all of the ramifications. There are contracts, there is federal funding at risk, there are people’s jobs, and most importantly, we don’t want to disrupt services.”

Seattle City Councilmember Alexis Mercedes Rinck, who previously worked as a director at KCRHA, now serves on the governing board. Speaking after the meeting, she said she left the agency three years ago in part because of concerns about its operations.

“I left three years ago primarily because of the dysfunction I was witnessing within the agency,” Mercedes Rinck said.

She said her focus now is on understanding the full scope of the situation.

“My focus in this moment is ensuring that we really sort out what the truth is in this matter,” she said.

Asked whether it is time to dissolve KCRHA, she urged caution.

“It’s important that we don’t take any knee-jerk reactions when we’re talking about immediate changes,” she said.