A forensic audit commissioned by the City of Seattle has concluded that the King County Regional Homelessness Authority — the flagship agency built to coordinate the region’s homelessness response — cannot account for roughly $13 million in public money, ran a negative cash balance of $44.7 million, and paid out tens of thousands of dollars in MasterCard gift cards with no documented recipients. The findings have triggered the first formal calls to dissolve the agency since it was created in 2019.
The audit, conducted by Bellevue accounting firm Clark Nuber and released on April 22, 2026, reviewed the authority’s first four years of operations. It documents what auditors describe as a near-total failure of basic financial controls inside an organization that has absorbed more than half a billion dollars in public funds since inception. According to a copy of the report published by the Seattle Human Services Department, “100 percent” of sampled purchase-card transactions contained compliance exceptions, and the agency had never adopted a written policy governing P-card use at all.
The political fallout has been immediate. Seattle City Councilmember Maritza Rivera and King County Councilmember Rod Dembowski have filed companion measures to dissolve the authority over a 12-month period. King County Councilmember Reagan Dunn has endorsed the proposal. King County Executive Girmay Zahilay and Seattle Mayor Katie Wilson, who together sit on the agency’s governing board, stopped short of supporting dissolution but issued an April 22 letter demanding a written corrective-action response by May 8, a hiring freeze, biweekly oversight meetings, and the establishment of a new finance committee.
$533 Million In, No Working CFO
The King County Regional Homelessness Authority, or KCRHA, was created in 2019 by interlocal agreement between Seattle and King County to consolidate homelessness response across the county’s 39 cities. The agency began operations in 2021 with the stated goal of replacing what its founders described as a fragmented patchwork of overlapping local programs. According to the authority’s own financial disclosures, its operating budget grew from $146 million in 2022 to a 2024 plan of $224 million and a projected $230 million in 2025.
From inception through July 31, 2025, the authority received roughly $533.9 million in funding from all sources, according to figures cited in the Clark Nuber report. Seattle provided 42 percent of the 2025 budget and King County contributed 19 percent, with federal pass-through dollars making up most of the balance.
Despite that scale of spending, auditors found that the agency had no chief financial officer in place at the time of the review — a fact Zahilay, who chairs the governing board, told reporters he learned only from reading the audit. Filling the position, he said at an April 24 board meeting covered by KUOW, would now be a priority.
The vacancy is itself a financial event. KCRHA paid roughly $450,000 over 11 months for an interim CFO supplied by a temporary-staffing firm, a rate nearly double the cost of the permanent salaried position the contract was filling, according to the audit’s findings as summarized by Axios. Clark Nuber identified an over-reliance on high-priced contingent labor across the agency’s administrative ranks as a structural driver of cost overruns.
Gift Cards, P-Cards, and a $44.7 Million Hole
The most concrete findings in the audit cluster around three categories of spending the agency was unable to document.
First, auditors flagged $36,700 in MasterCard gift-card purchases for which the agency could produce no records of the recipients, Clark Nuber’s Brian Nurse told the board at the April 24 meeting. Gift cards are commonly used by homeless-service agencies to provide emergency assistance, but federal grant rules and standard nonprofit controls require contemporaneous logs identifying each recipient. KCRHA’s records, the auditors said, did not exist.
Second, the agency had spent approximately $1.1 million on purchase cards to cover what auditors described as “large housing payments” — transactions that under normal procurement rules would have flowed through formal contracts and reimbursement channels. Bypassing those channels stripped the agency of competitive-bidding protections and made the disbursements difficult to reconstruct. Of the P-card transactions auditors actually sampled, every single one had at least one compliance exception, most commonly a missing receipt.
Third, and most consequentially, Clark Nuber concluded that roughly $8 million in agency expenditures could not be reconciled to any documented funding source. Combined with $4.26 million in administrative overspending — including interest charges the agency incurred because it could not invoice its funders on time, and which auditors said cannot be recovered — the unreconciled spending pushes the total flagged figure to roughly $13 million. The authority’s operating cash position, when the audit window closed in 2025, stood at negative $44.7 million.
Auditors took pains to distinguish the findings from outright theft. Nurse told the board the review found “no evidence of fraud,” but added that the absence of basic records meant fraud could not be ruled out either. The report frames the deficits as the cumulative product of weak accounting systems, leadership churn, and missing internal-control documentation rather than any single decision point.
A Five-Year Pattern of Warnings
The forensic audit did not arrive in a vacuum. The authority’s first chief executive, Marc Dones, resigned in June 2023 after a two-year tenure marked by repeated complaints from contracted service providers about late payments and missing reimbursements. Dones, who had helped design KCRHA as a consultant before being hired to run it, drew a salary of $247,200 during their time as CEO, according to figures published by MyNorthwest after their departure. The City of Seattle subsequently retained Dones as an outside consultant at a billing rate of $250 per hour to advise on Medicaid funding strategy, PubliCola reported at the time.
Service-provider warnings predate the Dones resignation. Multiple nonprofits contracted by the agency have spent years complaining publicly that reimbursement requests sat unprocessed for months, forcing them to subsidize state-funded work out of their own reserves. One provider, speaking to KUOW on condition of anonymity for fear of retaliation, described the dysfunction as “brutal” for organizations serving vulnerable populations. Another, Compass Housing Alliance president Christopher Ross, said his agency opposed dissolution but acknowledged that stronger controls were overdue.
Kelly Kinnison, who took over as KCRHA’s permanent CEO in 2024, told the governing board in an April letter that many of the audit’s findings stemmed from the agency’s startup period and that corrective actions were already underway. She also pushed back against the framing that funds were “missing,” arguing that the $8 million figure represents reconciliation lag rather than disappearance — that the dollars exist on paper but were not matched to a specific grant by the audit window’s close.
That distinction matters to grant funders. Federal homelessness dollars administered through the Department of Housing and Urban Development carry strict documentation requirements, and unreconciled expenditures can be deemed unallowable and clawed back. The cover letter from Wilson and Zahilay specifically directs the agency to produce, by May 8, written procedures for employee reimbursements, gift cards, expenditures, and purchase cards — the four areas where the audit identified the most serious control gaps.
A Regional Experiment Under Review
KCRHA was conceived as the answer to a critique that homelessness response in King County was duplicative and uncoordinated. Five years after its incorporation, the question facing local officials is whether that consolidation has produced any measurable improvement in outcomes — or whether it has merely consolidated dysfunction at greater cost.
Point-in-time counts conducted in King County show homelessness has risen, not fallen, in most years since the agency stood up. The 2024 count identified more than 16,000 individuals experiencing homelessness on a single January night, the highest figure on record. Tent encampments along Third Avenue, on freeway margins, and in commercial corridors have become a defining feature of downtown Seattle.
Critics of the dissolution proposal, including Zahilay, argue that unwinding KCRHA would disrupt federal funding streams, active service contracts, and the employment of hundreds of staff at contracted nonprofits. “This is not just a light switch that can be turned on and off,” he told reporters after the April 24 meeting. Wilson, the Seattle mayor, was more equivocal, saying “all options are on the table.”
Rivera and Dembowski, the elected officials leading the dissolution push, have so far described a 12-month wind-down rather than an immediate shutdown, with services and contracts to be transferred back to Seattle, King County, and other municipal partners. It is not yet clear that either of their companion measures has the votes to pass; King County Councilmember Reagan Dunn has signed on, but other members have not publicly committed. The King County Council has separately ordered a 90-day external review of the authority’s future, with findings due to the executive’s office by August 1.
What the forensic audit makes harder to dispute is the basic accounting picture. A regional agency with a budget approaching a quarter of a billion dollars per year operated for at least three of its four years without a permanent chief financial officer, without a written purchase-card policy, and without an internal-control framework that would be standard at a midsize nonprofit. Whether those deficiencies are recoverable through corrective action, or whether they merit dismantling the experiment altogether, is now the central question on the regional governing board’s agenda.
Clark Nuber’s report does not offer a recommendation on that question. It identifies the gaps, prices them, and turns the political decision back to the elected officials who created the authority. By the agency’s self-imposed deadline of May 8, KCRHA was required to submit a written plan describing how it intends to close those gaps; a broader corrective-action plan is expected later in the month. The governing board’s finance committee, established at the April 24 meeting, is scheduled to meet biweekly through the remainder of 2026.