King County, Seattle to take on unhoused organization following audit

Published 3:45 pm Wednesday, July 1, 2026

The King County Regional Homelessness Authority (KCRHA) is in need of an overhaul after an April 2026 audit found a $45 million deficit.

King County and the city of Seattle will be taking on the administration of city and county-funded homelessness service contracts from the King County Regional Homelessness Authority (KCRHA) through a phased implementation beginning in January 2027.

At a press conference on July 1, King County Executive Girmay Zahilay announced the steps the county, along with the city of Seattle, will be taking “to stabilize, right-size and reset the King County Regional Homelessness Authority.”

KCRHA is a government entity formed in 2019 with the mission to operate a homelessness support system to address unsheltered homelessness throughout King County. The authority is primarily funded by the City of Seattle Human Services Department and the King County Department of Community and Human Services, and has received a total of $533.9 million in funding from all sources from inception through July 31, 2025.

“Homelessness is a regional crisis that requires a regional solution. It does not stop or start at the borders of any one city. That idea still holds true today. We need a regional response to homelessness,” Zahilay said. “But that response must be accountable, financially sound, and capable of delivering the results that people experiencing homelessness, service providers, taxpayers and our entire community deserve.”

On April 17, accounting consultant Clark Nuber released a forensic evaluation of the King County Regional Homelessness Authority (KCRHA) covering the period from mid-2021 through July 31, 2025, for the city of Seattle. The report found KCRHA experienced recurring negative cash balances beginning in December 2023, reaching a negative cash position of approximately $44.7 million as of July 31, 2025, and had an administrative operating deficit of approximately $4.26 million, which includes approximately $1.26 million in interest charges that are not expected to be recovered. Additionally, the report said a receivables balance of $8 million could not be reconciled based on available records.

In response, Zahilay and Seattle Mayor Katie Wilson directed KCRHA to develop a corrective action plan to fix the issues. However, they found the plan to be “insufficient.”

“It didn’t provide the clarity, timelines, or urgency needed to fully address the findings of the forensic evaluation,” Zahilay said. “We have two new administrations in Seattle and King County. Mayor Wilson and I have inherited a lot of issues, but we will not maintain the status quo just because change is hard.”

Zahilay outlined a three-pronged plan “to stabilize, right-size and reset KCRHA.”

They plan to stabilize KCRHA by embedding an independent financial compliance team within KCRHA to “strengthen financial oversight, improve internal controls, support timely payments to providers and help ensure the agency remains well positioned to secure critical federal funds.”

“This team will provide regular progress updates to KCRHA’s finance committee as well as to my office and the mayor’s office,” Zahilay said.

The executive plans to narrow the authority’s scope of work to focus on its core regional responsibilities, including holding and distributing the federal Continuum of Care funds. To aid in this, the administration of city and county-funded homelessness service contracts will transition back to King County and the city of Seattle through a phased implementation beginning in January 2027. Through the transition, their teams will work with King County Department of Community and Human Services (DCHS) and Seattle Human Services Department (HSD) “to maintain continuity of services, minimize disruption and ensure people experiencing homelessness continue to receive the support that they depend on.”

“I have confidence in DCHS and the team that will lead this transition at the county,” Zahilay said. “They bring deep expertise administering complex housing and homelessness programs and I know they are committed to partnering closely with providers to ensure this transition is thoughtful, deliberate and focused on the people that we serve.”

Zahilay plans to reset their regional approach to homelessness by conversing with the cities of King County, state and federal partners, service providers and communities across the region about the future of the regional homelessness response.

“It does not mean King County or the city of Seattle are walking away from regional collaboration,” Zahilay said. “We remain firmly committed to our regional homelessness response system. What is changing is how responsibilities will be organized so that every part of our homelessness response is being carried out by the organizations that are best equipped to do that work.”

Zahilay defended the individuals working at the KCRHA.

“I also want to be clear that today’s announcement should not be seen as a reflection on the dedication, the talent, or the integrity of the people who work at KCRHA every day,” Zahilay said. “They take on incredibly difficult work in service of our most vulnerable neighbors and thousands of people across our region have been housed because of their efforts. We are deeply, deeply grateful for their service.”

King County Councilmembers Steffanie Fain and Jorge L. Barón and Seattle City Councilmembers Alexis Mercedes Rinck and Dionne Foster, who serve on the Governing Board of the King County Regional Homelessness Authority, support the executive’s plan.

“The framework presented by Executive Zahilay and Mayor Wilson is an important step toward strengthening the region’s homelessness response while protecting continuity of care for the people who rely on these critical human services,” they said in an issued statement. “Improving KCRHA’s internal financial controls and accountability is central to this effort.”