In Long Beach, the city’s ongoing homelessness crisis has come under intensified scrutiny following fraud allegations, a major contract termination, and a widening audit into tens of millions of taxpayer dollars.
City officials recently fired First to Serve, the nonprofit that had been operating the majority of Long Beach’s homeless shelters, after red flags emerged during an ongoing audit. The organization had overseen 423 of the city’s 500 shelter beds and received between $13 million and $14 million annually for shelter operations, rapid rehousing, and prevention programs.
The audit, launched in 2023 by City Auditor Laura Doud, is examining how roughly $70 million in homeless services funding has been spent since 2020. While the full findings have not yet been released, officials say the review uncovered serious concerns related to billing practices, documentation, and whether contracted services were fully delivered.
Long Beach Mayor Rex Richardson declined to say whether fraud is suspected, “I can’t get into the investigation” said Richardson when asked by an NBC reporter. Rex confirmed the city moved to terminate its agreement with First to Serve based on the audit’s findings. Notably, the city had already stopped payments to the nonprofit about four months earlier, in November, signaling growing concern well before the contract was officially ended.
In place of First to Serve, the city has brought in the Los Angeles based nonprofit People Assisting The Homeless, also known as PATH, to take over shelter operations. The transition was approved by the City Council following closed door meetings in early March, raising additional concerns about transparency in the decision making process.
The controversy gained further attention when mayoral candidate Chris Sweeney went to the location and pointed out the existence of “ghost tenants” within the system, saying shelters were reporting higher occupancy than what was actually observed. In a social media video and interview conducted at the Luxury Inn on Long Beach Boulevard, Sweeney pointed to a nearby shelter where only 12 of 78 rooms appeared to be in use, questioning how public funds were being allocated.
Watch Chris Sweeney’s facebook video here: https://m.facebook.com/story.php?story_fbid=pfbid0r7WMXZvsudenLcsrpDcq1VZ9xD7s8JsvHT29itTBhzxxexGtarmVJYBHCdEXWfLtl&id=1361807071&mibextid=wwXIfr…