LOS ANGELES — The Trump administration has suspended federal funding to the Los Angeles Homeless Services Authority (LAHSA), citing allegations of financial mismanagement and potential fraud, in a move that could affect homelessness programs across the nation’s second-largest city, federal officials said on Thursday.
The U.S. Department of Housing and Urban Development (HUD) announced the action after its Office of Inspector General opened an investigation into LAHSA, the agency that coordinates homelessness services across Los Angeles city and county. HUD Secretary Scott Turner said the suspension would remain in place while federal investigators review the agency’s handling of taxpayer funds.
In a statement released by HUD, Turner said the department had identified evidence of “repeated false statements” and deficiencies in financial management, internal controls and conflict-of-interest safeguards. “Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve,” Turner said.
According to HUD, the Los Angeles Continuum of Care, which is led by LAHSA, has received nearly $1 billion in federal funding over the past five years. Federal officials said the agency has been one of the largest recipients of homelessness-related grants in the country.
The funding suspension follows growing scrutiny of LAHSA’s finances. Audits and public reviews conducted over the past year raised concerns about accounting practices and oversight controls within the agency, according to local reports and federal officials. Details of the federal investigation remain unclear, and no formal findings of wrongdoing have been announced.
LAHSA disputed the federal government’s characterization of its operations and warned that the suspension could disrupt services for vulnerable residents. Agency officials said they intend to cooperate with investigators and seek clarification regarding the scope of the funding freeze.
Los Angeles Mayor Karen Bass expressed concern about the decision, according to statements from her office. Local officials have argued that homelessness remains a regional challenge requiring sustained federal, state and local cooperation.
The dispute comes as the Trump administration has increased scrutiny of federal homelessness spending and emphasized oversight of grant recipients. Housing policy has become a point of contention between federal officials and local governments in several major cities.
As of Friday, HUD said the suspension remained in effect while its investigation proceeds. Federal officials have not announced a timeline for completing the review, and the total amount of funding affected by the action has not been fully detailed.
