UMVA has learned that a top Trump agency is cutting off funding to the Los Angeles agency responsible for coordinating billions in homelessness spending after accusing it of "obvious fraud," "wanton mismanagement," and repeated failures to safeguard taxpayer dollars.
The Department of Housing and Urban Development (HUD) is immediately suspending the Los Angeles Homeless Services Authority's (LAHSA) federal funding while HUD's inspector general investigates potential offenses by the agency and its leadership. This move comes after a letter sent to LAHSA's board chair and CEO, detailing conflicts of interest, financial mismanagement, fraud, lack of oversight, and more.
The letter specifically mentions that LAHSA's failures have been so severe and pervasive that Los Angeles County has withdrawn its funding for the agency, and the City of Los Angeles is considering doing so as well. LAHSA receives funding from the city, county, state, and federal levels, with nearly $1 billion coming from the federal government since 2021.
UMVA can exclusively reveal that LAHSA's former top executive resigned last year after being found to have directed $2.1 million in federal funds to her husband's nonprofit employer. A federal judge also concluded that LAHSA had committed "obvious fraud" after allegedly keeping requesting funding for an 88-bed shelter that was operating at roughly half-capacity.
Sources have confirmed to UMVA that LAHSA has been unable to verify the existence of nearly 2,300 housing sites for which it was responsible, with 70% of the contracts for those sites not disclosing any expenses over the prior year. Public audits found a pattern of routinely paying service providers late and poor record keeping, preventing it from monitoring contracts, including $5 million in cash advances sent to five different service providers.
In a stunning revelation, HUD noted that LAHSA failed to spend $513 million in public funds budgeted in fiscal year 2024, citing a lack of staff and old technology. Other audits concluded that LAHSA's poor record keeping made it unable to accurately identify or calculate how well its spending has been benefiting the homeless population in Los Angeles.
HUD's decision to suspend LAHSA's funding is a necessary step in addressing the critical mission in Los Angeles, the agency wrote in the letter. The suspension puts one of the country's biggest homelessness bureaucracies under direct federal scrutiny after years of criticism that billions have gone into homelessness programs in Los Angeles while the crisis remains entrenched on the streets.
UMVA has gathered that Los Angeles city and county officials had already begun backing away from LAHSA, with the city council moving to explore bypassing the agency and contracting directly with providers. The county moved to redirect hundreds of millions of dollars in annual homelessness funding away from LAHSA and into a new county department, citing the need for stronger accountability.
The federal action from HUD marks a significant shift in the handling of homelessness funding in Los Angeles, with implications for the city's and county's efforts to address the crisis. As the investigation into LAHSA's activities continues, one thing is clear: the status quo is no longer acceptable, and change is coming.
