SAN DIEGO (KGTV) — A newly released audit into work done by a contractor hired to place victims in temporary housing following historic flooding in Jan. 2024 has found more than $2 million in questionable charges submitted to the county.
The audit, made public Thursday, reviewed the work of Equus Workforce Solutions and was triggered following a series of Team 10 reports last year.
The audit "revealed clear and serious failures on the part of Equus," said County Supervisor Monica Montgomery Steppe, who called for the review following Team 10’s investigation last year.
She said the review shows "there were significant gaps in how participant complaints were addressed and a lack of clearly defined systems for tracking and managing casework.”
The audit into the temporary lodging program the county launched following devastating flooding in Jan. 2024 reveals over 200 people were kicked out of hotels for either failing to prove they were flood victims or for using fraudulent documentation.
Equus came under fire last year after Team 10 discovered the company was charging the county rates for hotel rooms that were above their listed price.
Team 10 also found Equus hired workers from staffing agencies and then charged the county double what it paid for those employees.
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Company billed for work after program ended
The audit released Thursday said Equus billed the county $107 an hour for employees known as housing navigators.
“Paying Equus the $107.73 hourly rate would result in an overpayment, as the county would have paid twice for the temporary staff's taxes, benefits, and administrative costs,” the audit concludes.
In total, auditors found Equus overcharged the county $1,965,076.56 for staffing.
A second red flag auditors identified was a $386,696.66 invoice from Equus for labor charges from Sept. 2024 to Jan. 2025.
Equus, according to the audit, cited ongoing administrative requirements as the reason for the charges, but the audit said the temporary housing program ended in June 2024.
“These charges are questionable, given that the primary goal of the contract was to provide lodging and case management assistance,” the audit says.
'A breakdown in accountability'
The county has not paid the two flagged invoices so far.
Montgomery Steppe said the audit of the Equus contract wasn’t as thorough as she hoped, “which is not entirely surprising because internal audits can often miss the full picture.”
She said the county is still working to resolve invoicing issues related to Equus’ housing navigator charges.
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“These shortcomings reflect a breakdown in accountability and service delivery that must be directly addressed in any future contracts with Equus,” she said in a news release.
After facing backlash from flood victims for hiring Equus, the county claimed it was the only company that was able to provide housing services in an emergency.
The audit found that wasn’t entirely true.
Hotels were denied contracts
In fact, 14 hotels submitted proposals to the county and wanted to get contracts for emergency housing.
But the audit found the county “disqualified” the hotels because they didn’t offer extra services and staff to support victims during emergencies.
“As the sole qualified respondent, Equus had significant leverage in setting both labor and room rates. Notably, the wrap-around services requirement was later removed when the contract was amended,” the audit states.
County spokeswoman Tammy Glenn said the audit has identified opportunities for improvement.
“The county is working with its partners and contractors to enhance the quality and resilience of the services we provide to the community,” she said.
Equus didn’t respond to requests for comment on Friday.
