Philly City Council wants more oversight of the Office of Homeless Services amid questions about its finances

Philadelphia City Council is poised to increase oversight of the city’s Office of Homeless Services as the agency faces questions about its fiscal responsibility and an investigation by the inspector general.

Council Majority Leader Katherine Gilmore Richardson on Thursday introduced legislation to initiate hearings about the office’s spending and create a new ombudsperson with subpoena power to oversee the office.

The move is the latest step taken by city officials to probe overspending in the Office of Homeless Services that occurred under former Mayor Jim Kenney’s administration. The turmoil in the office, which is responsible for providing services to some of the city’s most vulnerable populations, is now a challenge for new Mayor Cherelle L. Parker’s administration to solve.

Last month, officials from Kenney’s administration said they became aware in the fall that the Office of Homeless Services had spent nearly $15 million more than it was budgeted over the last four years. Over the same period, at least a half-dozen nonprofits that contract with the city to provide services to the homeless experienced severe delays in payment, in some cases stretching for months or years, the providers told The Inquirer.

Parker administration officials admit that a number of nonprofits were not paid in a timely manner and that they are aiming to complete all payments for fiscal year 2023 — which ended in June — by next month.

» READ MORE: Some Philadelphia homeless shelters have gone months or years without being paid by the city

A spokesperson for the Office of Homeless Services said the overruns, which occurred during the tenure of former executive director Elizabeth Hersh, came as the office saw significant staff turnover and a ballooning budget as a result of federal pandemic relief funds. Hersh resigned last year, a move that city officials said was unrelated to budgeting issues.

The Office of Homeless Services contracts with nonprofits to provide emergency housing such as overnight shelters and manage programs aimed at reducing homelessness.

In November, the office’s interim director, David Holloman, asked Council for a budget infusion to cover the nearly $15 million shortfall that came as a result of the overspending. But Council members, led by Gilmore Richardson, denied the request and approved an additional $9.6 million — enough to cover overruns only from previous years.

Since then, the office has said it can’t provide some homelessness prevention services because it doesn’t have enough funding.

Gilmore Richardson said she was “appalled” by that assertion and that Council provided “more than enough” funding.

“If there’s any additional issue, we must continue to investigate that,” she said. “They should have enough money to adequately provide service to our entire unhoused population.”

Gilmore Richardson’s office has been probing the office’s budget for months. She has said that her staff pored through hundreds of records and found a handful of irregularities, including charges from vendors that didn’t match the amount budgeted.

The creation of an ombudsperson to oversee the office would require a change to the city’s Home Rule Charter, a document similar to a constitution. Amendments to the charter must be passed by Council with a two-thirds majority and approved by voters through a ballot question.

In addition, the creation of the ombudsperson’s office would give Council more oversight over the Office of Homeless Services. According to the legislation, the ombudsperson would be appointed by the mayor but would need to be confirmed by Council.